Home About Us Services
Business Services Personal Services
Our People Seminars Careers Contact Us

How does the possibility of a future inheritance affect a property settlement?

Written on the 19 September 2013 by Matthew Carney

There is no absolute rule; it will depend on the circumstances.

Future Inheritance and Property SettlementsThe issue has been the subject of a number of applications for property settlement over the years and below I set out how the Courts have dealt with such applications.

The most well known case is Tulloch v White. In this case, the husband argued that his former wife had an expectation of inheritance from her mother’s estate. The wife’s mother was aged 81, a widower, in reasonable health and had two surviving adult children, one being the wife.

The husband essentially argued that the mother’s Will left a half share of her estate to the wife, therefore creating the expectation.

The husband’s argument was rejected by the Court. In so rejecting it, the Court stated:

“We do not consider there is any absolute rule. The ultimate criterion is whether the evidence is, or may be, relevant to the just and equitable process. An expectancy of inheritance will not be relevant in many proceedings. In the end, relevance must depend upon the nature of the claims being put forward and the facts of the particular case... there must be a worthwhile connection between a specific element of the party’s case and the suggested expectancy…It is ultimately a question of fact and degree. During the course of argument a number of obvious examples at each end of the spectrum were referred to. In a case where the testator had already made a will favourable to the party but no longer had testamentary capacity and there was evidence of his or her likely impending death in circumstances where there may be a significant estate, and where there was a connection to s 75(2) factors, it would be shutting one’s eyes to realities to treat that as irrelevant. On the other hand, the bald assertion that one of the parties has an elderly relative who has property and is or is likely to benefit that party is so speculative that it would be inappropriate to contemplate it as relevant in a s 79 determination, it being too remote to affect the justice and equity of the case in any worthwhile way.”

Essentially, the Court took the view that there was no obligation on the wife’s mother to choose to benefit the wife or any other person or institution and furthermore, even if there was, any such benefit may be eroded over time by intervening events, such as expensive medical care and treatment, donations to third parties or institutions or other economic uncertainties.

However, the Court also stated that “we do not consider there is any absolute rule” and there may well be circumstances when the Court will make an adjustment due to an expected inheritance.

Such circumstances arose in the case of De Angelis & De Angelis. In this case, again there was an application by the husband in relation to the wife’s expected inheritance from the wife’s mother’s estate. However, in this case, there was evidence that the husband had undertaken a considerable amount of work on properties owned by the wife’s mother, at no cost. The Court stated:

“we think it important to remember that the Court is required…to accord justice and equity to both parties. The question therefore has to be asked whether, in the present case, it would be just and equitable to the husband for the Court to have ignored the probability that, in what could well be [a] very short period of time (given the ages of her aunt and mother), the wife could well be the owner of two properties having a combined value of almost the same amount as the value of the parties’ property currently available for distribution, and particularly in circumstances where the husband had been found to have done substantial improvement and maintenance work on both properties? ... We consider that it would have been unjust to the husband to ignore this matter even if it was categorised only as a possibility and not a probability”.

De Angelis can be contrasted against the case Tulloch as a consequence of the significant works that the husband undertook to the properties. The husband through his contributions had significantly improved the value of the properties which the wife would likely benefit from.

While the general rule is that the Court will not take into consideration the expectation of an inheritance there are exceptions. In such situations, the Court also has the power to adjourn proceedings if there is likely to be a significant change in the financial circumstances of the parties to the marriage or either of them.


If you have any questions about this topic you should contact Matthew Carney on 1800 994 279 or email him. A member of our Family Law Team will endeavour to respond to your enquiry within 24 hours.

- Matthew Carney
   Family Lawyer

Matthew Carney - Family Lawyer

Family Lawers in NSW


Author: Matthew Carney
Publications

Family Law

Lottery Winnings & Property Settlements - Who gets the winnings?

If you win a lottery, are the lottery winnings an asset that the Family Court should adjust between you and your spouse post separation? The answer is generally “yes”... In the 1995 case of Zyk & Zyk the Full Court reviewed the way that lottery wins were presided upon by the Court. Prior to this case lottery winnings w...

Read More ...

Doing a deal with your ex-spouse has just been made a whole lot more taxing

On 30 July 2014, Taxation Ruling 2014/5 came into effect. This ruling has important tax implications for the shareholders of private companies who receive a payment of money or the transfer of property from such companies in accordance with Family Law Court Orders under the Family Law Act. Prior to this Ruling, it had been argued that ...

Read More ...

Can I change my child's surname after separation?

The naming your child is a fundamental right that has been recognised by the United Nations. The Declaration of the Rights of the Child states a 'child shall be entitled from birth to a name and nationality'. It was stated by the Family Court in the case of Chapman v Palmer that an adult may use any name by using of such name and ...

Read More ...

Legal Recognition of Same Sex Couples

Same Sex Relationships - Children & Surrogacy Family Law Issues In 1999, the Government amended the Property (Relationships) Act NSW to include same sex relationships within the definition of “de facto relationships”. This encompasses everyone in the LGBT community (lesbian, gay, bisexual and transgender). Following t...

Read More ...

Property Settlements: Value of Assets & Debts - What is the relevant date?

The first step in a property settlement (marriage or de facto) is to compile an accurate list of the assets and debts, including values. Sometimes people have been separated for a long time before they do anything about a property settlement. The current value of the assets/debts may be considerably different to the value at separatio...

Read More ...

| 1 2 3 4 5 6 | Next


Articles via RSS rss
Events
Buying or Selling Property - Everything you need to know!

Wednesday 26th Nov 2014
Time 6:00pm - 7:30pm 26th Nov


Blogs
"Thanks for all your help recently. You have gon...

B. Walsh

Home Bookmark Site Print Tell a Friend Contact UsLinked In Twitter Facebook enquiries@turnbullhill.com.au