By Sheree Orbell, Solicitor Director and Mia Eddy, law graduate, at Orbell Family Lawyers
For many Central Coast families, inheritances represent far more than money.
They reflect decades of hard work, sacrifice and careful saving – perhaps the family home, investments built over a lifetime, or funds intended to provide security for children and grandchildren.
It’s therefore natural to ask: If I leave money to my son or daughter and they later separate, will their former partner receive part of it? If I separate later in life and receive an inheritance, how will it be treated?
Under Australian Family Law, the answer depends on the circumstances. And common assumptions are often incorrect.
There is no automatic rule
A widespread misconception is that inheritances are automatically protected in a separation. Another is that they must be divided equally. In reality, neither is correct.
When couples separate, their property is assessed as a whole. An inheritance is considered within that broader financial picture, but it is not automatically excluded, nor automatically shared. The outcome depends on what is fair in the overall context of the relationship.
If you receive an inheritance and later separate
If you receive an inheritance – whether before, during or even after a relationship – several key factors become relevant in a property settlement: When the inheritance was received. How it was used. Whether it was kept separate. The length of the relationship. The financial and non–financial contributions of each person. The future needs of each person.
If inherited funds were used to renovate the family home, reduce debt or support shared living expenses, they are more likely to be treated as part of the overall asset pool to be divided If they were kept clearly separate and not used for joint purposes, they may carry greater weight as an individual contribution to be dealt with separately when deciding who gets what in a separation.
However, contributions in a relationship are not limited to money. Caring for children, managing a household, and supporting a partner’s career are also recognised. In long marriages, particularly those spanning decades, the distinction between “my asset” and “our asset” can become less significant over time.
If your adult child receives an inheritance and separates
For many parents over 55, this is the more pressing concern. You may intend your estate to provide stability and opportunity for your children, not to indirectly benefit a former spouse.
If your child later separates, the inheritance they receive can be taken into account in their property settlement. That does not mean it will automatically be divided, but it will form part of the overall financial assessment.
Timing is often important: If the inheritance was received early in a long relationship and blended into joint finances, it may be treated as part of the shared assets. If it was received later in the relationship, or after separation, it may be given greater recognition as belonging to the recipient. If it has not yet been received, it is generally not treated as a current asset.
Even where an inheritance is not divided directly, it can still influence the final outcome. If one person has access to significant inherited funds, this may affect how other assets are allocated to achieve fairness.
What about expected inheritances?
An inheritance that has not yet been received is usually not included as property in a settlement. Wills can change, and future timing is uncertain However, if an inheritance is likely to be received in the near future, it may be considered as part of the broader financial circumstances when assessing fairness between parties.
Protecting family wealth within relationships
While Family Law cannot prevent separation, there are steps individuals can take within their own relationships to create clarity and reduce uncertainty.
For example, financial agreements entered into before, during or after a relationship can help define how certain assets, including inheritances, are treated if separation occurs.
These agreements are strictly governed by Family Law and must meet specific legal requirements to be binding. They are not suitable for every situation, but in some families, they provide reassurance and structure.
Importantly, advice should be sought early. Once separation occurs, options may be more limited.
Why specialist Family Law advice matters
Later–life separation and intergenerational financial concerns involve more than numbers. They intersect with retirement planning, superannuation, long–term security and adult children’s stability.
These matters require careful, strategic Family Law advice, not assumptions.
At Orbell Family Lawyers, Family Law is all we do. With an office based on the Central Coast, our team regularly advises individuals navigating separation later in life, as well as parents concerned about how inheritances may be treated if their adult children separate.
Our focus is always on clarity, structured resolution and protecting long–term financial stability wherever possible.
The key message: context is everything
Inheritances are neither automatically protected nor automatically shared.
Each situation turns on its specific facts – timing, use, contributions and future financial positions – with fairness as the guiding principle.
For many over 55s, the concern is not simply about dividing assets today. It is about ensuring that what has been built over a lifetime continues to provide security for the next generation.
Seeking specialist Family Law advice early can provide clarity, confidence and peace of mind, for you and your family.
Liability limited by a scheme approved under Professional Standards Legislation. The information contained in this article is for general information only and should not be construed as legal advice.