Do I have to share my inheritance with my spouse?

Receiving an inheritance when you're part of a couple might raise some questions. You might not have to share your windfall with your partner, but it’s a little more complicated than a simple ‘yes’ or ‘no’ answer.
Do I have to share my inheritance with my spouse?

While we like to think that our inheritance is protected – and that what’s rightfully ours will always be rightfully ours, and ours alone – this unfortunately isn’t the case. Inheritance actually isn’t a protected asset, regardless of whether you’re married or de facto. However, determining whether your spouse is entitled to your inheritance does depend on how long the two of you have been together.

What’s the best way to protect my inheritance from my spouse?

You’re probably all-too used to us saying this by now, but when in doubt? Write it out!

The best way to protect yourself and your windfall inheritance is to sign a contract with your spouse, stipulating whether or not they’re entitled to any of it. In Australia, couples (both de facto and married) are able to make a financial agreement whereby they can amicably divide inheritance if they wish to.

If I share all money with my spouse, does this mean they’ll naturally inherit my inheritance?

Nope. You’re able to draw up a financial agreement where all assets (financial and other) are shared, while excluding their right to your inheritance.

What happens if my spouse and I separate?

This is where things can get a little more complicated. The Federal Circuit and Family Court of Australia (FCFCOA) is responsible for managing family law matters. It deals with cases in relation to divorce, financial matters, parenting matters, property settlements, inheritance disputes, and more. So when it comes to separation and inheritance, this is where the matter will be heard.

Here’s what they’ll do:

Quarantine the inheritance

This means the inheriting spouse will be able to keep it, and they can decide on whether they’d like to give some of their inheritance to their spouse. It’s common for separated couples to struggle to restore their wealth after a break-up – they often can’t maintain the standard of living they’re used to – so this can be quite an impactful way to help your ex-spouse out during a challenging financial time.

The inheritance can be included in the property and asset pool

The court might view the inheritance as a contribution made by the inheriting spouse. However, the inheriting spouse might receive a larger portion of the inheritance so that they’re fairly compensated for sharing the inheritance they’re entitled to.

I’ve heard of ‘Consent Orders’. What are they?

A consent order is an agreement between two ex-partners. It is approved by the court and generally covers financial and property division matters. Having an agreement like this in place can make the separation process less stressful for both parties, allowing them to come to a fair settlement (when it comes to inheritance) quickly.

When a consent order is in place, the matter likely won’t move to family court, unless negotiations fail and things become messy.

What happens if things do get messy and we can’t reach an agreement?

Well then, the matter will have to be taken to court where the division of the inheritance in the divorce settlement will be determined. In Australia, there are a number of elements to consider when determining how much inheritance each spouse is entitled to.

Here is a common one…

When did the inheriting spouse receive the inheritance?

If the inheriting spouse was given the money before the separation, the courts will likely see this as a financial contribution to the couple. This means the money won’t be able to be taken out during asset collection.

If the money was given during the couple’s relationship (when they were still very much together), the way the funds are divided will depend on a few factors: The intentions of the donor, and/or the way the money was spent by the couple. If the couple used the money for family holidays, home renovations and dinners out, the money will likely be distributed evenly between the two spouses.

If the money was given late into the relationship or after their separation, the courts won’t take the inheritance into account when dividing up financial assets.

If the money was given before the relationship started, or very early into the relationship, then the inheritance likely won’t be taken into account at all as it would be viewed as a contribution to the relationship by the beneficiary.

Wrap up

So no, you don’t necessarily have to share your inheritance with a spouse. But it all comes down to the written agreements you have in place, and at what stage in your relationship the inheritance was received (and what it was used for, if it was given mid-relationship). The best way to protect yourself – always – is to write everything down.

While you're writing things down, consider writing your legal Will. Start today at

Disclaimer: The content of this blog is intended to provide a general guide to the subject matter. This blog should not be relied upon as legal, financial, accounting or tax advice.

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