It’s mine, I got it after we broke up

In fam­i­ly law dis­putes it is a com­mon mis­con­cep­tion that an inher­i­tance or oth­er large sum received after sep­a­ra­tion will be exclud­ed from the prop­er­ty pool to be divid­ed between the par­ties. This issue was dealt with in the recent case of Calvin & McTi­er [2017] FAM­CAFC 125.

The Full Court of the Fam­i­ly Court in West­ern Aus­tralia heard an Appeal by a hus­band who argued that an inher­i­tance received 4 years after sep­a­ra­tion should not be includ­ed in the prop­er­ty to be divid­ed between him and his ex-wife. 

The par­ties were mar­ried for 8 years and were divorced in 2011.They had one child who was 5 years old at the time of separation.

In 2014 the hus­band received an inher­i­tance from his father’s estate.

The wife com­menced pro­ceed­ings more than 3 years after sep­a­ra­tion and was grant­ed the Court’s leave under Sec­tion 44 (3) of the Fam­i­ly Law Act to pur­sue a prop­er­ty set­tle­ment claim.

The tri­al Judge found that the net val­ue of the assets to be divid­ed between the par­ties was $1,340,319 of which, in per­cent­age terms, the remain­ing inher­i­tance of $430,686 account­ed for approx­i­mate­ly 32% of the asset pool. The hus­band tried unsuc­cess­ful­ly to exclude his inher­i­tance from the asset pool. The tri­al judge assessed con­tri­bu­tions as 75%/25% in the husband’s favour and, after mak­ing a 10% adjust­ment to the wife for future needs, divid­ed the prop­er­ty 65%/35% in favour of the husband

The hus­band appealed the decision.

The cen­tral issue on appeal was whether the tri­al Judge erred by includ­ing the husband’s post sep­a­ra­tion inher­i­tance with­in the par­ties’ prop­er­ty pool avail­able for divi­sion. The hus­band argued that his inher­i­tance should not be includ­ed in the pool because of the degree of ​“con­nec­tion” or more to the point, the lack of con­nec­tion, between the inher­i­tance and the par­ties’ mat­ri­mo­ni­al rela­tion­ship. The hus­band was unsuc­cess­ful in tak­ing that posi­tion and his appeal was dismissed. 

The Full Court con­clud­ed that the Court retained a dis­cre­tion as to how to approach the treat­ment of prop­er­ty acquired after separation.

The Full Court have approved this deci­sion in two oth­er cas­es, Hol­land & Hol­land [2017] Fam­CAFC 166 and Wid­mann & Wid­mann [2017] Fam­CAFC 602.

Inter­est­ing­ly in the NSW case of Hol­land the inher­i­tance was not includ­ed in the asset pool.

It is impor­tant you obtain legal advice about your par­tic­u­lar cir­cum­stances before you make any deci­sions about divid­ing your prop­er­ty as a there is no one way the Court will deal with post sep­a­ra­tion assets.