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Inheritances and Relationship Property

Have you inherited some money or you are about to? Should an inheritance be shared with your
Partner or kept separate? If you are in a relationship and inherit money, you need to consider
whether you want it to become relationship property, or whether you want to recover it in the event
of separation.

The Law does not require someone to share their inheritance with their partner. Some people could
not imagine not sharing and some might want to protect the inheritance for themselves.
Under the Property (Relationship) Act property an inheritance is separate property, but for it to
remain so, it must be kept separate and isolated from other assets. The only way for it to stay
separate is:

● Not to apply any of the inheritance for relationship purposes. If you keep the inherited
property separate and do not apply it towards or intermingle it with, relationship property,
then it will not lose its character as separate property. Intermingling of funds could be by
way of paying off a relationship debt or a promise to the other person that the funds would
be used for the benefit of them both.
● Enter into a “contracting out” agreement under s21 of the Property (Relationships) Act 1976.
This allows couples to determine by way of a contract, the ownership of certain property.
The contract could provide, for example, that inherited money will continue to be separate
property of the person who has received it, regardless of it use. It can be stated that in the
event of a separation, the person who inherited the money would be paid out the amount of
the inheritance before the property is divided.

If you think this might apply to your situation, contact us now. For any further clarification around
this, please feel free to contact one of our Relationship Property team.

Disclaimer: The content of this article is general in nature and no intended as a substitute for specific
professional advice on any matter and should not be relied upon for that purpose.