ONE OF THE MATTERS that can affect the distribution of property on divorce is property inherited by a party to a marriage.
How the court treats inherited property depends on the facts and circumstances of the case. For example, it is more likely that a court would take an inheritance into account where it was acquired early in the marriage.
In the Australian case of Bonnici vs Bonnici (1992), the Full Court observed: “The other party cannot be regarded as contributing significantly to an inheritance received very late in the relationship and certainly not after it is terminated except in very unusual circumstances.”
In Bonnici vs Bonnici the facts as stated in the headnote of the case were:
The parties commenced to cohabit in 1969. They married in 1973 and separated on January 1, 1990. In 1976, the parties began a restaurant business on premises owned by the husband’s mother.
In June 1987, the husband inherited $20 000 from his uncle’s estate. In February 1989, following the death of the husband’s mother, the husband and his sister became sole beneficiaries of the mother’s estate which consisted of the freehold, amounting to $500 000, equally with his sister.
On appeal, the husband argued that the trial judge’s finding that the parties’ contributions under Section 79(4) of the Australian Family Law Act were “to an equal degree” was incorrect, having regard to the husband’s contribution to the relevant pool of assets of the $20 000 inheritance in 1987 and the $250 000 inheritance from the restaurant freehold within a year of separation.
The Full Court held:
“1. The money from the inheritances was ‘property’ and came into the parties’ hand during the subsistence of the relationship.
2. A property does not fall into a protected category merely because it is an inheritance. On the other hand, if there are ample funds from which an appropriate property settlement can be made, then the fact of a recently acquired inheritance would normally be treated as an entitlement of the party in question.
3. The other party cannot be regarded as contributing significantly to an inheritance received very late in the relationship and certainly not after it has terminated, except in very unusual circumstances.
4. In the present case, the moneys received by the husband from the uncle’s estate and the sale of the freehold should not be brought into account.”
It cannot be overemphasised how important the particular facts are in determining how an inheritance is treated.
Indeed, in Bonnici vs Bonnici the court, in making this point, observed:
“If, for example, in the present case, there had been no other assets than the husband’s inheritance, but the wife had, as his honour found, clearly carried the main financial burden in support of a family and also performed a more substantial role as homemaker and parent than the husband, then it would clearly be open and indeed incumbent upon a court to make a property settlement in her favour from such an inheritance.”
Cecil McCarthy is a Queen’s Counsel. Send your letters to Everyday Law, Nation House, Fontabelle, St Michael. Send your email to [email protected]
