A few weeks ago I sent out a newsletter entitled ‘Is your loved ones inheritance at risk’ in which I discussed how certain eventualities in life, that effect most families at one point or another, often lead to child or other beneficiary losing part or, all of their inheritance.
I received a lot of enquiries on this subject and one of the most common questions I have been asked was:
“What would happen to my beneficiaries inheritance if they got divorced?”
It’s an understandable concern when you consider that an estimated 1 in 2.5 marriages end in divorce and 1 in 5 children live in stepfamilies.
The answer to the question is that it depends on how; a beneficiary is to receive their inheritance.
Typically, if someone has received inheritance and then subsequently gets divorced, the inheritance they have received will form part of the divorce proceedings. In all likelihood, the inheritance would be shared with the estranged spouse along with any other individually or jointly held assets.
However, and this was something most people were not aware of, assets that are ‘LIKELY TO BE INHERITED’ can be, and often are, included in divorce proceedings. This means that if a beneficiary were to get divorced whilst you were still alive, the inheritance that they would receive in the future would often still have to be shared with an ex wife or husband even if they became divorced several years earlier.
Whilst a simple Will is highly unlikely to do anything to prevent the loss of inheritance in the event of divorce, there are things that can be done.