How Is Future Inheritance And Entitlement Under A Trust Treated In Divorce?

• Published date: 23 July 2021
• Subject Matter: Family and Matrimonial, Family Law, Wills/ Intestacy/ Estate Planning
• Law Firm: Shoosmiths
• Author: Ms Caroline Watson and Adam Maguire

The court has to have regard to the "income, earning capacity, property and other financial resources that each party to the marriage has or is likely to have in the foreseeable future" (Section 25(2)(a) Matrimonial Causes Act 1973).

Property and other financial resources can include expectations under a will and beneficial interests under a trust.

Expectations under a will

It is rare for a future entitlement under a will to be treated as a financial resource. It is difficult to predict life expectancy and therefore when an inheritance might be received. Another difficulty is trying to establish the amount that might be received and the uncertainty that a testator can change the terms of their will at any time. Unless a testator is a party to the proceedings, they are not obliged to disclose the terms of their will or value of their estate.

Whilst rare, if a future inheritance does have certainty, the court may consider it a resource. For example in Hayat Youssef Alireza v Hossam Youssef Ibrahim Radwan and others [2017] EWCA Civ 1545 the court held that Saudi forced heirship laws meant that the wife's future inheritance had certainty.

The court may also consider adjourning an application if one party to the proceedings is due a substantial inheritance that would significantly alter the available assets.

Trusts

Assets or entitlement to income under a trust are a financial resource. Whether or not they will be included in a divorce settlement will depend on the...