Question: I am a British citizen, and have inherited a property back home from my uncle. In case of a divorce, does my ex-wife have a claim on that property?
Answer: The extent to which a spouse is entitled to receive a financial settlement on divorce changes from one jurisdiction to another, and will be affected by a number of different factors. You indicate that you are a British citizen, but you must bear in mind that to pursue divorce proceedings in the United Kingdom, one of the parties must be domiciled or habitually resident in Britain.
Defining the legal term domicile is notoriously difficult, but in simple terms, you are domiciled in the country where the law regards you as having your most permanent connection. Habitual residence is easier to define — in the context of divorce proceedings, it simply means that you must have made your permanent home in England or Wales for six months before bringing your divorce proceedings. Your domicile or habitual residence can be of crucial importance financially when bringing or defending divorce proceedings.
Wife-friendly laws
The United Kingdom is regarded as being very wife-friendly when it comes to divorce, and has a very broad view of what constitutes matrimonial assets.
This has given rise to the practise known as ‘forum shopping', whereby a person intending to file for divorce chooses the best forum or jurisdiction to suit his or her preferred outcome. This is prevalent amongst couples living offshore, and is an option for those who divide their time between two or more countries, who have dual nationalities, or assets in more than one country.
Assuming either you or your wife has a sufficiently strong connection to establish domicile or habitual residence in the United Kingdom, there is still some forum shopping to be done.
In Scotland, inherited wealth is generally excluded from a divorce settlement. However, in England and Wales it may be said that unless the husband's and wife's resources substantially exceed their financial needs, inherited property, and any assets acquired before the marriage, will fall into the ‘pot' available for division.
The best way of achieving finality is to ensure that claims of this nature are dismissed in a carefully negotiated and drafted court order. Without this an ex-spouse can claim against any inheritance you receive, even against your own estate after your death. There is a lesson to be learnt here: sound professional advice is required during a divorce, and is always required when planning your estate, to ensure that the people you want to inherit your wealth actually receive their inheritance.
A will is one way of achieving this, but a will is still open to attack from an ex-spouse. For larger estates, or where there are complicated family issues or a family business, more sophisticated estate and succession planning is essential.
By the use of trusts, the most difficult circumstances can be traversed providing you with greater certainty and peace of mind.
(Mark Nierada is a Solicitor and Senior Estate Planning Consultant with Nexus Insurance Brokers LLC, www.nexusadvice.com)
