Do I need to disclose my inheritance in divorce?
Do I need to disclose my inheritance in divorce?
The short answer is yes.
If you are resolving financial matters following divorce, you must disclose any inheritance you have received. You may also need to disclose a substantial inheritance or gift that you expect to receive in the future.
However, disclosure does not automatically mean your spouse will receive a share. These are two separate questions:
- Disclosure concerns transparency: the court must understand the complete financial picture.
- Division concerns fairness: the court must decide whether, and to what extent, an inheritance should be taken into account.
An inheritance may be treated as non-matrimonial property and excluded from sharing. However, it cannot simply be omitted because you consider it to be yours alone.
What must be disclosed?
Both spouses must provide full, frank and up-to-date disclosure of their financial circumstances. In court proceedings, this is normally provided through a Form E.
You must disclose an inheritance already received, whether it consists of:
- cash or investments;
- property or land;
- shares or a business interest;
- valuable personal possessions;
- an interest in an estate that is still being administered; or
- an entitlement under a trust or will.
You may need to provide the will, grant of probate, estate accounts, correspondence from the executors or trustees, relevant valuations, and statements showing what happened to the inherited money.
You must also explain how the inheritance has been used. For example, was it retained in a separate account, invested, used to purchase or improve the family home, or spent on family expenditure?
This information may affect whether the inheritance is ultimately treated as separate property.
What does section 25 of the Matrimonial Causes Act 1973 say?
When deciding financial claims following divorce, the court applies section 25 of the Matrimonial Causes Act 1973.
The court must consider all the circumstances, with first consideration given to the welfare of any child of the family under 18. The relevant factors include:
- each spouse’s income and earning capacity;
- the property and other financial resources each spouse has, or is likely to have in the foreseeable future;
- present and future financial needs and responsibilities;
- the family’s standard of living;
- the parties’ ages and the length of the marriage;
- contributions to the welfare of the family; and
- any other relevant circumstances.
The reference to resources a person is likely to have in the foreseeable future can include a prospective inheritance or substantial anticipated gift.
Is an inheritance automatically shared?
No. English law distinguishes between matrimonial property and non-matrimonial property.
Matrimonial property is broadly the wealth built up through the parties’ marital partnership. Non-matrimonial property commonly includes assets acquired before the relationship, inheritances and significant gifts from third parties.
An inheritance may therefore be excluded from the sharing principle, particularly where it has been kept separate and both parties’ needs can be met without using it.
However, inherited property remains relevant to the court’s overall assessment. If the matrimonial assets are insufficient to provide suitable housing or meet the parties’ and children’s needs, the court may use inherited wealth to achieve a fair outcome.
The source of the asset is important, but it is not the only consideration.
What did Standish v Standish decide?
The Supreme Court considered the distinction between matrimonial and non-matrimonial property in Standish v Standish [2025] UKSC 26.
The case concerned assets acquired by the husband before the marriage. He transferred investments worth approximately £77.8 million to the wife as part of an inheritance tax planning arrangement.
The Supreme Court held that transferring the assets into the wife’s name did not transform them into matrimonial property. The assets remained principally non-matrimonial because of their source and the purpose of the transfer.
The decision confirms that:
- The sharing principle applies to matrimonial property, rather than all property automatically.
- The original source of an asset is important.
- Legal ownership is not conclusive.
- A transfer between spouses does not necessarily convert separate property into matrimonial property.
- The court will consider how the parties treated the asset over time.
- Non-matrimonial property may still be used to meet needs.
An inherited asset may become “matrimonialised” if the spouses treat it as shared property. Using an inheritance to buy a jointly owned family home, repay the joint mortgage or fund the family’s lifestyle may weaken an argument that it should remain wholly separate.
Standish v Standish strengthens the protection available for identifiable non-matrimonial property, but it does not create an automatic exemption for inheritance.
Must future inheritance prospects be disclosed?
Potential inheritance prospects should be disclosed where there is a real possibility of receiving a substantial financial benefit.
The significance of that disclosure depends on the circumstances. There is an important difference between:
- a general hope of inheriting from a living relative;
- being named in a will that can still be changed;
- an established entitlement under the estate of someone who has died;
- a confirmed distribution awaiting payment; and
- specific knowledge that a substantial gift or inheritance is likely to be received.
A court will normally treat a speculative expectation cautiously. A will may be changed, and the value of an estate may be reduced by spending, tax, care costs or other claims.
However, uncertainty about timing or value does not justify concealment. The inheritance prospect should be disclosed so that the court can decide what weight, if any, to give it.
The importance of De La Sala
The Court of Appeal’s decision in De La Sala v De La Sala [2026] EWCA Civ 282 demonstrates the risks of failing to disclose an expected financial resource.
Before a consent order was made, the husband knew he was likely to receive a substantial gift from the wife’s family and knew the likely size of the first payment. He did not disclose this. After the order, he received gifts totalling approximately US$34.77 million.
The Court of Appeal upheld the decision to set aside the order for deliberate material non-disclosure. It did not matter that the gifts had not been received when the order was made. The husband’s knowledge that he was likely to receive a substantial payment was material information.
The practical message is clear: if you know that you are likely to receive a significant inheritance or gift, particularly before a final financial order is made, it should be disclosed.
What happens if an inheritance is not disclosed?
Failure to disclose an inheritance can have serious consequences. The court may:
- order further disclosure;
- draw adverse conclusions about the existence or value of assets;
- adjourn the proceedings;
- make a costs order;
- refuse to approve a proposed settlement; or
- set aside an order obtained on incomplete or misleading information.
Concealing an inheritance may also damage your credibility and substantially increase legal costs.
How can I protect my inheritance?
No arrangement can remove the Family Court’s ultimate jurisdiction. However, careful planning can strengthen the argument that inherited property should remain separate.
Enter into a nuptial agreement
A pre-nuptial or post-nuptial agreement can record how existing and future inheritances should be treated.
The agreement can deal only with inherited or gifted property if the parties do not wish to regulate all their finances. It may cover:
- inheritances already received;
- future inheritances and lifetime gifts;
- trust interests;
- property purchased with inherited funds;
- assets replacing inherited property;
- income and growth generated by an inheritance; and
- what happens if inherited funds are used for the family home.
Further to Radmacher v Granatino [2010] UKSC 42, the court should give effect to a nuptial agreement entered into freely, with a full appreciation of its implications, unless it would be unfair to hold the parties to it.
Both parties should receive independent legal advice and provide full financial disclosure. The agreement should also make fair provision for needs and any children.
Keep clear records
Where possible, inherited funds should be kept separately and their movement carefully documented. Retain probate documents, estate accounts, valuations and bank or investment statements.
Take advice before transferring inherited assets into joint names or using them to purchase or improve the family home. Those decisions may affect how the assets are treated on divorce.
How JMW can help
Inheritance cases require careful analysis of the source of the asset, how it has been used and whether both parties’ needs can be met without relying on it.
JMW’s specialist family law team advises on inherited and gifted wealth, complex financial disclosure, trusts, pre-nuptial and post-nuptial agreements, negotiations and contested financial remedy proceedings.
Taking advice at an early stage can help preserve evidence, avoid the unintended mixing of assets and improve the prospects of protecting inherited wealth as far as the law allows.
