Inheritance and Divorce
Treatment of Inheritances
In the case JL v SL the court considered how property inherited during the marriage should be treated on divorce.
In this case, the Wife received £465,000.00 from her mother, which derived from the estate of her late father.
The Wife received these monies ten months before the end of the marriage and at time when the Wife believed he husband was forming a relationship with another woman.
However, despite this, the Wife transferred some of the monies into the Husband’s name. The Wife alleges that this was for interest accumulation due to the fact that most of their joint assets at the time were in a bond, which could not be touched. It was also achieved to ensure the monies were available in the event of the Wife’s death.
After the parties separated, matrimonial proceedings were commenced.
Within the proceedings, the Wife sought an Order for the entire £465,000.00 to be ring fenced for herself.
However, the Judge held that the money had become a matrimonial asset.
The Wife applied for permission to appeal.
The Wife submitted that the Judge had erred in his judgment.
The Court held that the question of whether the existence of pre-marital property should be reflected in the distribution of capital in matrimonial proceedings, depends on duration and mingling.
The Court confirmed that it was clear from the evidence that the decision as to whose name the money had been held had been influenced by the question of where interest would most beneficially be obtained.
It was considered that the placement of the money in the Husband or Wife’s name, had nothing to do with any underlying decisions by the parties as to whether the fund should be matrimonial.
It was held that in circumstances where certain matrimonial funds were held in the Wife’s name and locked up in a bond, the motive for the monies to be placed in the Husband’s name had been to ensure he had access to funds if the Wife died.
In view of this, it was considered that the Judge could not tenably have held that the Wife intended the monies to be a matrimonial asset.
The Judge had concluded that the Wife intended the assets in question to have the same character as those built up by their joint endeavours during the marriage, with the consequence that they should be shared equally on divorce. However, as confirmed, the court held that the evidence could not tenably lead to such a finding.
The Court confirmed that the fact there had been some mingling of money in the sense that some had been placed in the Husband’s name, did not mean that the non-matrimonial source of monies was destroyed.
It was held that the Judges’ conclusion was erroneous.
Accordingly, the Wife was granted permission to appeal.
The appeal would be allowed, with the matter be submitted for a rehearing.
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