The Short Answer

Inheritances are not automatically protected in Australian divorce. They can be included in the asset pool and divided.

However, how an inheritance is treated depends on several factors.

Factors That Matter

Timing

Received early in the relationship:

More likely to be treated as a joint asset

Contributions since then dilute its significance

Received late or after separation:

More weight given to the inheritor

May be treated as a contribution by that party

How It Was Used

Mixed with joint assets:

Put into joint bank account

Used to buy family home

More likely to be shared

Kept separate:

Never mixed with joint funds

Stronger argument for protection

Size Relative to Asset Pool

Small inheritance, large asset pool:

Less significant in the overall picture

Large inheritance, small asset pool:

May be the main focus of property settlement

The Court's Approach

Courts consider inheritances as a financial contribution by the receiving party. But this is just one of many factors.

Typical Outcomes

- Early inheritances: Often shared more equally

Late inheritances: Often adjusted in favour of the inheritor

Future inheritances: Generally not considered (but financial resources are)

Protecting an Inheritance

Binding Financial Agreement

A BFA before or during marriage can specify how inheritance is treated.

Keep It Separate

- Maintain in a separate account

Don't use for joint purposes

Document clearly

Document the Source

Keep records showing:

Where it came from

When received

How it's been kept

Inheritance After Separation

If you inherit after separation but before property settlement is finalised, it may still be considered (as a "financial resource" or contribution), but typically with greater weight given to you.

Future Inheritances

The court generally won't speculate about future inheritances. But if an inheritance is imminent and certain, it may be considered as a financial resource.

Inheritance and Divorce: Is It Protected?