When a marriage or de facto relationship breaks down, the distribution of property is important for both parties. While some property settlements are reasonably straightforward, sometimes it can be difficult to determine the entitlements of each party.

A common mistaken belief is that a couple must be divorced to finalise their property with their estranged spouse. Both parties can conduct a property settlement as soon as they separate from one another. Some individuals believe their inheritance is protected from the asset pool available for distribution.

However, this issue is assessed on the circumstances of a particular case. The Courts will take into consideration:

• when the inheritance was received
• the impact the inheritance has on the size of the asset pool
• the length of the marriage or de facto relationship

An inheritance received by a party prior to the relationship will be considered a contribution to the asset pool. However, the impact of the inheritance may recede if the partner received contributions during the relationship.

An inheritance received after the separation may be exempt from the balance of the asset pool. The Court’s discretion usually relies on the distribution of the asset pool and the assets of both parties.