Relationship property and expected inheritance: Family Law in Australia

It is becoming very common in family law matters that one or both parties have older parents. If one party has an expectation of an inheritance, the other party may be able to argue that it should be relevant to the proceedings and considered for any adjustment of the relationship property.

What is “property”?

The Family Law Act 1975 (Cth) (the FLA) defines property to be any property to the relationship which the parties to the relationship are, or that party is, as the case may be, entitled.

The court may make such orders as it considers appropriate with respect to the property of the parties of the relationship altering the interests of the parties to give effect to what is fair having regard to all of the circumstances of the case.

In property settlement proceedings (namely the division of relationship property on a breakup), it is necessary to identify and value the existing interests of the parties in the property of the relationship. Sometimes those interests can be “equitable” meaning a party does not have legal title to particular property but may have contributed to the other party’s ownership of the property in some way.

Gold bullion
Gold bullion courtesy of Money Metals (CC2.0CC)

To ascertain the financial position of a relationship, the court looks to three broad categories:

  1. Assets (such as the family home and cars);

  2. Liabilities (such as the mortgage and credit cards); and

  3. Financial resources (any interest for which a party could derive benefit in the future but isn’t immediately available, such as an imminent inheritance).

Expected Inheritance

A dispute over a party’s right to relationship property may be affected by that party’s expected inheritance. The court would have to consider whether a party’s expected inheritance should reduce that party’s entitlement to all or some of the relationship property. In considering whether to make such an adjustment, the court would contemplate:

  1. the financial resource of each of the parties;

  2. whether the “justice of the case” should permit the court to adjust a party’s interests in relationship property because of an expected inheritance that exists on the horizon;

  3. whether the court should adjourn the proceedings because there is likely to be a significant change in the financial circumstances of the parties to the marriage or either of them; and

  4. whether the court can be satisfied that, in all the circumstances, it is just and equitable to make the order adjusting a party’s interests in relationship property because of the expected inheritance.

Jamaican plain panorama
Open plain courtesy Jonathan Bowen (CC2.0CC)

The leading authority on this issue is White & Tulloch v White (1995) FLC 92-640. In that case the Full Court of the Family Court of Australia held that:

  1. There isn’t an absolute rule as to when a party can benefit from another party’s expected inheritance.

  2. A bald assertion by one party (party A) that that the other party (party B) has an elderly relative who has property and party B is or is likely to benefit is so speculative that it would be inappropriate to contemplate it as relevant in determining party A’s needs factors, it being too remote to affect the justice and equity of the case in any worthwhile way.

Will it be considered?

Ultimately, whether or not an expected inheritance will be considered in any property settlement will turn on the facts of the case.

If the Court can be satisfied that:

  1. there is a likelihood that one party will inherit property in the “not too distant future”; and

  2. the value of the expected inheritance is significant,

then it is likely that this matter should be raised and considered in court.

Property settlements are complex and the state of the law is always changing. Speak to one of our family lawyers today on (02) 9519 3088 or email us on