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.

The 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 expectancyIt 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 requiredto 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 further questions relating to property settlements, please 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 & Head of Family Law

Matthew Carney, Family Lawyer in NSW

Property Settlement NSW


What happens during the property settlement process? (Video)


Author: Matthew Carney
About: Matthew Carney is a Lawyer who is a member of both the Family & De Facto Law Team and our Criminal Law Team. Matthew provides practical and effective family law advice to clients in all matters including property settlements, parenting matters, applications for divorce, annulment applications, child support, contravention, recovery and relocation proceedings. Matthew assists his clients to resolve matters in their best interests at the earliest possible opportunity. Matthew explains the law in an individual way tailored to each clients needs while demonstrating genuine care and compassion in this difficult time.
Connect via: Twitter Google+ LinkedIn

Contact Us Now

We respond in 24 hours or less

Please provide details regarding your matter so we can assist you

Enquiry Form

Fill out our enquiry form and we'll respond within 24 hours

Listen to the captcha
 
Publications

The laws relating to AVOs will change on 3 December 2016

Changes to the NSW Crimes (Domestic and Personal Violence) Act will commence on 3 December that will change the test for granting Apprehended Domestic Violence Orders (ADVOs). Previously, the court required proof that the Person in Need of Protection (PINOP) had reasonable grounds to fear and in fact feared domestic violence. This sec...

Read More ...

Alcohol Related Offences and Penalties: Important Information For The Holiday Season

The Christmas holiday period coincides with an increase in fatalities on NSW roads. In 2016, there has been a staggering 352 lives lost on NSW roads, 31 more people have already lost their lives in 2016 when compared with 2015. With end of year parties, gatherings and celebrations regularly involving alcohol, road users need to be ext...

Read More ...

Traffic Law - Common Offences and Penalties

A List of Traffic Law Common Offences & Penalties - NSW Traffic Law in NSW is a complex and an extensive system of Rules and Regulations. It is not uncommon for an individual charged with an offence under one piece of legislation to be sentenced by a penalty prescribed under different legislation. A summary of the most common offences...

Read More ...

Misconception about workers' rights to make a "journey claim"

In June 2012 the O'Farrell government made significant changes to the New South Wales workers compensation regime. It was widely reported that workers had lost the right to bring a claim for workers' compensation if their injury was sustained on a journey to or from work... that is not the case. It is correct that the O'Farrel...

Read More ...

Capital Gains Tax and Family Law Property Settlements

Capital Gains Tax (CGT) and Family Law Property Settlements from Turnbull Hill Lawyers If you separate and you are considering retaining assets that if sold would result in a Capital Gains Taxation ("CGT") liability or if you are selling an asset at the time of property settlement that would result in a CGT liability ...

Read More ...

| 1 2 3 4 5 6 7 8 9 10 | Next


Events
Blogs
"Please note our sincere appreciation of your timely and competent advice and attention to detail throughout the processes. It has been nothing if n...

Phil Berriman

Liability limited by a scheme approved under Professional Standards Legislation

enquiries@turnbullhill.com.au