Divorcing to protect inheritance

[weightstrugglinmum]

Just as the title reads really, I'm wondering if anyone has divorced to protect their expected inheritance?

I'm thinking of this to protect myself and my young sons future as my in-laws financial situation is a poop show and when they pop their clogs it's going to be potentially very difficult to resolve and very costly. And I want nothing to do with that.

I have friends who did this. She wanted to protect her family money - she’s loaded, he isn’t. Still ‘married’ as far as most people know - only a very few of us know. They still celebrate anniversaries, etc.

My exh was financially abusive (and in other ways) and never contributed anything at all to our joint expenses (which was of course one of the many reasons I didn't stay with him). However, while we were still married, he inherited a large sum.
I did NOT get a single penny of that money.

On the plus side though, he also didn't get anything from me at all and I walked away with both the house and my pension fully intact (combined these were worth far more than he inherited). Essentially it was as though we had never been married in the first place. So it's not always the case that everything is shared, but I can fully understand your wish to be able to make sure of that.

The fact that you're even considering it suggests your marriage is not in a healthy place anyway, so leaving now and going your separate ways financially, seems much more sensible than staying.

Where do you live? In Scotland, inheritance are not matrimonial property

I think in your shoes I would divorce. You clearly can’t trust DH with money or to prioritise his own DC over his feckless parents.

It’s a bit mercenary to divorce to protect your parents assets who haven’t even died yet …. A man would get his arse handed to him if he said he was divorcing for these reasons alone.

get your parents to set up a trust

Yes, you need to see an expert and you need to see one quickly. I've spent months researching this very topic and it's incredibly complicated - and I'm not at all convinced your inheritance would be considered seperate funds even if you do put it in a different pot. Ultra wealthy people use trusts for this very reason, and getting your parents to set up a discretionary trust for you and the kids seems the best way to go. But there are lots of tax implications you all need to take into account, for instance, silly things like setting up two trusts could end up saving money in the long run etc. I went to a general lawyer first and have ended up spending on something not fit for purpose. I'm now starting again, but I've learned a valuable lesson. Don't just go to a lawyer, go to a lawyer specialising in wealth management. You need a lawyer who is a member of STEP (society of trust and estate practitioners). And once you have a plan, you need to run it by (or get them to run it by) a STEP accountant to make sure you're not doing anything silly that might cost you thousands in unexpected tax. Most of this needs to be done by your parents, so get them involved now. If you do this you will be protected even if you stay married. Good luck.

Not sure about that. Depends on how much is in the pot as to either or not you can separate what’s yours and what’s matrimonial. Due to my ex having absolutely nothing I had to include all my premarital savings and pensions in the pot- my premarital savings were in foreign currency in a foreign account !!

Do it. My ex left with almost half of what I inherited from both my parents before and during our marriage. It was a big chunk of money but only a fraction of what he is likely to come into when his own parents die.

Op I think that you have had some very good advice and I would add that if you get the final part as mentioned earlier ensure that you take any original documentation and do not leave it the hands of any legal people.

You are not up to date with the law. Since Standish v Standish you can hold money separately and it will not become part of the marital assets. Take legal advice, see a solicitor.

Talk to him, explain your concerns and if he would still do that despite knowing it’s your fear then why would you want to be married to him?

Not entirely true. All debts have to be paid from the assets, so they don't die with the deceased as such. It will mean that there will probably be no house to inherit etc, and may also mean that any legal fees relating to the estate/funeral fees will need to be paid by the family if there's nothing left from the estate. So there could definitely still be money owing in that respect.

Also, just to get a bit of an idea about all of this, is worth watching one of the legal seminars offered by charities. Obviously their aim is to get you to leave them a gift in your will etc, but if you put that aside, they give you a good understanding of how trusts work. This was a recent one but Contact, the disabled kids charity (as its a bit of a nightmare planning for disabled kids). Just good basic info with no obligation...

This sounds like a rather extreme response for something DH might do. Have you actually talked to him about this? It would be awful of you to divorce him over something you'd just made up in your head.

Also so many questions over timing, how likely are your parents to pass away before his, is this likely to happen soon or in twenty years, etc etc. Again it all just feels a little too much like you're preparing for an imaginary scenario that might never happen - unless there's things you haven't told us.

Put the inheritance in your bank account and don’t give him any. If it’s substantial - buy a property in your name.

A bit of a leap to jump straight to the thought of divorcing and sad money is worth more to you than your marriage. There are other ways to protect your inheritance.

No he couldn't. Your parent leaves money to you. You put that money in an account your husband has no access to. You don't sound like you like him or his parents. The inheritance from a parent, who is presumably still alive, is just an excuse.

Of course.
It's your right, for whatever reason you divorce.
Now I read your posts, I would as well.
It's a practical move that might spare you a lot of misery.

It's posts like this that are often misleading and possibly wrong.

I am not an expert on this OP needs a solicitor.

BUT I do know that simply having your own accounts and thinking that money is YOURS in the event of a divorce is nonsense.

I have several accounts in my own name, as does DH. Savings, income, ISAs, shares.

They are our joint assets.

In the event of a divorce you have to declare ALL your assets including pensions.

This is taken into account for the settlement.
If an inheritance can be ring fenced, fine- but find out first!

Yes, he could. It could all end up in the pot as a matrimonial asset in the event of a divorce, as others have said.

OP - If your patents are still healthy, I would get the ball rolling tomorrow on a divorce. If not, then trusts are the way to go, but they can be complicated to set up and manage.

Just as a side thought, have you considered how your finances will be managed on your death?

Do you have a will? Any death in service or life insurance benefits? If you passed tomorrow, are your kids set to inherit and do they have a responsible adult to manage their inheritance?

The Op referring to her 'dh' is a bit of a giveaway that this marriage is not a happy one.

The title gives the wrong impression.

I’m currently getting divorced, just applied for conditional order/ decree nisi, and getting everything together for the financial order. The financial order is ESSENTIAL, as without it, even after the divorce itself is finalised, your spouse could come along years later and make a claim on your finances. No one wants to win the lottery and have a rogue ex scuttle out of the woodwork with their grabby hand out. I’ve looked into everything as much as I can. Obviously do your own research and get legal advice, but from what I’ve found- inheritance is not a marital asset unless it’s mixed with other marital things, like if it’s been used towards a house deposit. Once it’s mixed, it’s no longer yours, it’s joint.
Also gifts made specifically to yourself, like if your parents bought you a car, are not marital assets, even if you use it daily to do the school run or drive your spouse to work.
For pensions not yet in payment- all contributions made during your relationship (from when you moved in together, not just when you actually got married if you cohabited first) are also fair game. Any contributions made beforehand are yours, so get a statement of all contributions made since the inception of your pension policy, so you can have evidence of your own and potentially joint portions of your pension plan.

It’s a lot to do during an obviously stressful time, but it’s so important to make sure you get all of your ducks in a row to protect yourself and your children going forward. Good luck 💐

It means no one else is liable for the debt unless jointly named. I would have thought most people would have life insurance to cover a mortgage.

That was my understanding. But in Scotland the rules are different.