Introduction
Q1: Almost everything we own came from my inheritance. Do I still have to split it down the middle?
A: No. When an inheritance is the source of nearly all the assets, courts routinely land well away from half. In one 22 year marriage the court found 97 per cent of the assets traced back to the wife's inheritance, and she kept 75 per cent of the realisable assets even though the husband had spent four years caring for her dying mother. Reference: Ross & Audley [2011] FMCAfam 280
Q2: I only received the money four years after we separated. Is it still on the table?
A: Yes. Property you hold at the date of the hearing can be divided, no matter when you got it. A husband who inherited four years after separation kept 65 per cent, but the unspent $430,686 was still counted in the pool rather than set aside. Reference: Calvin & McTier [2017] FamCAFC 125
Q3: Can the judge simply leave my inheritance out of the pool altogether?
A: You cannot start by marking some property as off limits. Assuming that property held in your name and lawfully acquired is automatically outside the division misreads the legal principle, and a trial judge who did exactly that with a $715,000 inherited house was overturned on appeal. Reference: Holland [2017] FamCAFC 166
What does the size of an inheritance actually change?
Australian family law has no special rule that turns an inheritance into an asset that automatically sits outside the division. Under section 79 of the Family Law Act 1975, whether an inheritance affects the final split does not turn on the fact that it is an inheritance. It turns on how much of the whole pool it represents. Under section 79 the court asks at the outset whether it is just and equitable to make any order at all, then identifies everything the two of you own at the date of the hearing, assesses what each of you contributed, considers your future needs, and finally checks the overall result against that same just and equitable standard. In that process, an inheritance is treated in law as a financial contribution made by the person who received it. How much it counts for depends on how large it looms against all the wealth and effort the two of you built up across the marriage. Put simply, an inheritance is not left out just because it came from your parents or is held in your name. What the court actually looks at is how much of the family's overall wealth that inheritance represents.
Three principles from the Full Court frame how this works:
- Timing does not remove property from the pool. In Calvin & McTier [2017] FamCAFC 125 the husband inherited four years after separation, and the Full Court confirmed that section 79 reaches all property held at the hearing date regardless of when it was acquired.
- Excluding property is an error, not a discretion. A judge cannot label an asset immune and set it aside before the assessment begins.
- Contributions are assessed across the whole relationship. The court weighs the totality of what both of you put in, financially and otherwise, rather than asking who contributed to one particular asset.
"In our view it is wrong as a matter of principle to refer to any existing legal or equitable interests in property of the parties or either of them as 'excluded' from, or 'immune' from, consideration in applications for orders pursuant to s 79....[T]here is no basis for excluding from consideration any property in which the parties have an existing legal or equitable interest."
That said, a court can still decide to assess an inheritance separately from the rest of the assets once it starts weighing contributions. The difference matters. Refusing to look at an asset is an error. Looking at it and then deciding it belongs in its own pool is a legitimate exercise of discretion, and large inheritances are the situation where judges most often take that second path.
One note on the section numbering. The judgments discussed here refer to the old section 75(2) future needs factors, covering age, health, income and care of children. Since the 2024 amendments took effect in June 2025 the equivalent factors for married couples are set out in section 79(5) and described as current and future circumstances. Section 75(2) has not disappeared, it still governs spousal maintenance. The 2024 amendments also did more than renumber: the effect of family violence on contributions and on future needs is now written into the statute, the housing needs of children are a listed factor, and wastage of property is dealt with expressly. The reasoning in the cases below on how inherited wealth is weighed is unaffected by those changes.
Core Point: The question is never whether your inheritance counts. It is how much weight a court gives it. The share of the pool it represents is the strongest single signal of that weight, and it is something a judgment cannot pass over in silence, but it sits alongside the length of the relationship, what each of you contributed, and what each of you will need afterwards.
Why does the share of the pool change the percentage split?
Judges assess contributions holistically, which sounds like it leaves room to call things equal, but a contribution that makes up a third of everything you own cannot be treated as though it made no difference. If a large inheritance sits inside the pool and the judgment gives no visible recognition to it, that reasoning can be overturned.
Getting this wrong has real consequences:
- You settle too low. Believing the inheritance is just one factor among many, you accept half when the case law points to 55, 62 or 75 per cent.
- You settle too high. Believing inherited money is untouchable, you refuse reasonable offers and discover at trial that decades of homemaking reach into it.
- You win at trial and lose on appeal. An assessment that fails to account for a substantial inherited share is vulnerable, and both of you then pay for a rehearing.
The parties were married for 33 years. In 2006, during the marriage, the husband received an inheritance from his father. The wife conceded it was worth at least $404,619 and the husband put it at $445,486. Against a net pool of $1,317,405, that inheritance was roughly 30 per cent of everything the couple owned. The wife had received an inheritance of her own, but at $50,000 it was a fraction of the husband's.
The trial judge assessed contributions as equal. The husband appealed, arguing that an equal finding gave no weight at all to the difference between a $404,619 inheritance and a $50,000 one.
Outcome: The Full Court allowed the appeal by two to one. Strickland and Ryan JJ held that the reasoning was defective because nothing in it recognised that around 30 per cent of the pool came from the husband's side alone, and they re-assessed contributions at 55:45 in his favour on the non-superannuation assets. Austin J dissented. He accepted that the husband's inheritance was much the larger of the two, but took the view that it still had to be weighed against everything else across 33 years, and that moving the husband from 50 to 55 per cent, worth about $65,000 on these figures, was too modest a shift to show the trial judge had been plainly wrong.
"There is no recognition that approximately 30 per centum of the asset pool at least was derived from the husband's inheritance, and his Honour's failure in that regard cannot be masked by suggesting that his Honour duly applied the requisite holistic approach..."
Key Point: Read what Roverati actually decided. It did not hold that an equal split is unlawful once an inheritance reaches 30 per cent of the pool. The same judgment stresses that dividing property is not a matter of totting up percentages, it means looking at everything both parties contributed. What the majority could not accept was that the trial judge, faced with an inheritance worth about a third of the whole pool, never explained why that contribution made no difference to the final split. Put simply, Roverati is not telling you that a 30 per cent inheritance cannot end in 50:50. It is settling one point: when an inheritance is a substantial share of the pool, you cannot write as though it were not there, and you have to explain why the division still comes out where it does.
How do courts handle inheritances of different sizes?
The reported decisions fall into three broad patterns. The inheritance as a share of the whole pool is an important guide to where a case is heading, but it is a starting point rather than a formula. Two cases with inheritances of around 30 per cent can end at 55:45 and at 65:35. In Sinclair the non-inheriting spouse in a 50 year marriage came away with a smaller share than the spouse in Ross & Audley, where the marriage ran only 22 years and the inheritance was the larger share of the pool. What this shows is that courts do not look only at the percentage, they look at the whole picture behind it. Treat the three bands below as a guide to how courts think, not as an answer you can apply straight off.
Scenario 1: The inheritance is a third to a half of the pool
Common misconception: A long marriage cancels out where the money came from, so we end up close to equal.
Legal truth: Length of marriage pulls the numbers toward the middle, but it does not erase a large inherited contribution. In this band the reported results cluster between 55:45 and 65:35 in favour of the person who inherited.
"Taking into account the extent of the property emanating from the husband's family and the myriad of other contributions both parties made over a 28 year period, I conclude that the division of assets based on contributions should be 70 per cent to the husband and 30 per cent to the wife."
This was a 28 year relationship, including four years of living together before the marriage. The husband received inheritances one and two years before separation, and by trial they represented 43.5 per cent of a $2.7 million net pool.
The wife pointed to the many contributions both of them had made across nearly three decades, and to her own future needs, which were affected by limited employment prospects and mental health problems.
Outcome: The court assessed contributions at 70:30 in the husband's favour, then adjusted 7.5 per cent to the wife for future needs, producing a final division of 62.5 per cent to the husband and 37.5 per cent to the wife.
| Comparison | Roverati [2021] | Calvin & McTier [2017] | Dinsmore [2012] |
|---|---|---|---|
| Relationship length | 33 years | 8 years | 28 years |
| Inheritance share of pool | About 30 per cent of $1.32m | 32 per cent of $1.3m | 43.5 per cent of $2.7m |
| When it was received | During the marriage | Four years after separation | One to two years before separation |
| Final split | 55:45 to the husband | 65:35 to the husband | 62.5:37.5 to the husband |
Key: Compare the first two rows and you can see why percentage alone predicts very little. Roverati and Calvin & McTier involved almost identical shares of the pool, around 30 and 32 per cent, yet the final figures were 55:45 and 65:35. Part of that gap is not a gap at all. The 55:45 in Roverati was a pure contributions assessment, because both parties agreed no future needs adjustment was warranted, while the 65:35 in Calvin & McTier was contributions of 75:25 followed by a 10 per cent adjustment to the wife. On contributions alone the two cases sit at 55:45 and 75:25, which is a much wider gap than the final numbers suggest. The rest of the difference comes from the marriages themselves, and not only their length. In Calvin & McTier the husband's initial contributions far outweighed the wife's, who started with almost nothing. In Roverati the wife brought in more capital at marriage, had the longer employment history, and was assessed as the stronger contributor as homemaker and parent. Length of relationship matters, but so does who brought what in and who did what during it.
In this band, do these things:
- Value the inheritance as at the hearing date, not the date you received it. Growth in the asset changes its share of the pool and therefore its weight.
- Keep evidence of what happened to the money. An inheritance spent on the family home is a different argument from one that sat untouched.
- Work out the percentage before you negotiate. A settlement offer means little until you know whether the inheritance is 20 per cent or 45 per cent of what you jointly own.
Scenario 2: The inheritance is nearly everything you own
Common misconception: If I inherited all of it, my former partner walks away with nothing.
Legal truth: The non-inheriting partner still receives a meaningful share. Where the inheritance is the source of almost everything, the reported results tend to sit between 15 and 30 per cent, and the share rises as the pool contains more that the two of you built together. Courts recognise years of homemaking and care, but they also accept that the wealth came from one family.
"The reality is however that the entirety of the parties' realisable assets are as a direct result of an inheritance received by the wife from her mother."
The marriage lasted 22 years. Of the $3,150,259 the couple held, the court found that 97 per cent traced back to what the wife inherited from her mother four years before they separated. The family lived in the mother's house and both of them looked after it, and the dividends from the inherited shares were used for the benefit of the family, so this was not a case of money kept in a separate box.
The husband made a genuine case for a larger share. He had cared for his mother in law during the last four years of her life, and he argued she had intended the money to benefit the whole family rather than her daughter alone.
Outcome: The wife received 75 per cent of the $3,030,000 of realisable assets, and the husband kept the whole of his own superannuation on top of his 25 per cent, which left him with close to 28 per cent of everything. The judge did not accept that the husband had contributed little to the inherited assets. What decided the weighting was that the inheritance was a contribution made on the wife's behalf, because she was her mother's daughter.
A longer marriage does not mean a larger share at the end. Sinclair [2012] FamCA 388 shows exactly that, and shows that the size of the inheritance is not the only thing that decides the outcome. In Sinclair the $7.3 million of property came mainly from what the wife inherited from her father. After a 50 year marriage the husband ended up with around $1.1 million, about 15 per cent. The court found that most of the value in the pool was not the product of anything the couple built together, it came from the wife's inheritance, and so it reduced the husband's share of the overall property. That result is lower than what the shorter-married spouse received in Ross & Audley, even though the inheritance in Ross & Audley was the larger share of the pool. The case shows that courts look not just at how long the marriage ran, but at how much of the family's wealth this inheritance actually accounts for.
Where a substantial part of the pool was built up by the couple during the marriage, the non-inheriting spouse usually receives a larger share. Hurst [2018] FamCAFC 146 shows how that works. In Hurst the land the husband inherited had grown from about $400,000 to about $1,820,000, and made up roughly 60 per cent of the pool at the time. The trial judge accepted that although the land came from an inheritance the wife had also contributed during the marriage, assessed contributions at 72.5:27.5 in the husband's favour, and after taking her future needs into account left the wife with about 40 per cent of the property. The Full Court held that the inherited land could not simply be looked at on its own while the wife's indirect contributions to the family during the marriage were left out of account. It allowed her appeal and sent the case back for a rehearing rather than fixing the final percentages itself.
The case shows that where an inherited asset becomes mixed into the life and the wealth the couple built together, and the marriage involved substantial joint contributions, a court will not simply treat it as one person's inheritance.
If you are the person who did not inherit, focus on these points:
- Document the length and nature of your non-financial contributions. In a pool built from one family's money, this is the whole of your case.
- Identify any work you did on the inherited asset itself, such as renovations, management or maintenance. Ross & Audley shows why this matters: the judge there refused to accept that the husband had contributed little, because the family had lived in and maintained the inherited house for years.
- Put your future needs squarely in evidence. Expect it to add at the margin rather than transform the outcome. The adjustment was 12.5 per cent in Hurst and about 2.7 per cent in Sinclair, and in Ross & Audley the parties agreed there would be none at all.
Scenario 3: The court puts the inheritance in its own pool
Common misconception: Everything gets added up and split by one percentage.
Legal truth: When an inheritance is large and arrived late, courts often assess it separately from the assets you built together. This is not the same as excluding it. The asset is still in front of the court, and it still gets divided, just on its own set of percentages.
"Moreover, sight must not be lost of the caution in Figgins of the need to recognise that 'Marriage is and should be regarded as a genuine partnership to which each brings different gifts'. In the Dawes/Ferraro context, the wife, in my view, contributed to the balance 75% of the category 1 assets in a real and not token way."
After a 27 year marriage the couple held about $7.5 million. The judge grouped roughly $2.48 million of it into a category sourced from the husband's family. Only about a quarter of that category, $648,406, was money left to him by will. The rest was gifts his parents made during their lifetime and the growth those funds had produced.
The husband asked for the whole of that category. The wife argued that her work running the household had freed him to manage the family's money, so her contributions reached those assets as well.
Outcome: The judge assessed the assets in three categories rather than as one pool. He treated the $648,406 of true inheritance as entirely the husband's contribution, then split the remaining three quarters of that category 60:40, which came out at 70:30 for the category as a whole and gave the wife 30 per cent of it. Her contribution to the $4.95 million of matrimonial assets was assessed at 47.5 per cent. Added together, contributions across all three categories came to 58:42 in the husband's favour, and a further 3 per cent adjustment to the wife for future needs produced the final division of 55:45.
Two situations are worth knowing about. The first is where an inheritance arrives near the end of the marriage and is kept apart from the couple's joint property, in which case a court may not bring it into the division at all. In Bishop [2013] FamCAFC 138 the wife inherited about $250,000 roughly a year before separation and kept it on its own in a trust, never mixed with family finances. The court took the view that this inheritance had limited connection to the property the couple had built up over a long marriage, and did not count it in the pool. The second is where an inheritance arrives after separation, which can be handled the same way. In Victor [2011] FMCAfam 920 the wife inherited about $700,000 after separation. Because the husband had made no material contribution to that money, the court did not bring the inheritance into the property to be divided and dealt only with the assets built up during the marriage.
These cases show that whether an inheritance affects the final division is not just a question of whether it is an inheritance. It also depends on when it was received and whether it was mixed with the couple's joint property.
Both of those decisions predate Holland, and as the law has developed, saying an inheritance is excluded or immune is no longer accurate. After Holland the approach is to bring the inheritance into the property as a whole first, and then decide how much weight it should carry in the final division. That does not mean Holland overturned the result in Bishop. Holland never revisited whether Bishop was correctly decided. It said only that you cannot explain a result by saying an asset was excluded. In practice the division a court arrives at may still look much the same as before, leaving the person who inherited with the larger interest. The difference is that the court has to explain why that division is just, rather than simply setting an asset to one side and not considering it. A judgment that gives no reasons and just treats an asset as outside the division risks being overturned on appeal.
Notice what happened in Victor. Treating the inheritance separately did not mean the other side got nothing extra. The husband's 67.5 per cent of the matrimonial assets came to about $510,000, while the wife took roughly $246,000 plus the whole $700,000 inheritance, so her total was close to $946,000. Separating the inheritance shifted the percentages on the smaller pool without evening out the overall result.
To argue for a separate pool, build the record on these points:
- Show the inheritance stayed separate. A dedicated account beats a mixed one, and a mixed one is very hard to argue about later.
- Pin down the date it was received against the date of separation. Late arrival is one of the weightiest factors.
- Be ready for the trade. If the inheritance is quarantined, expect your former partner to receive a larger percentage of the rest.
For how the date you received an inheritance changes the analysis, see Inheritance and Divorce in Australia: How Courts Decide. On whether courts assess very large pools by dollar figures instead of percentages, see Dollar vs Percentage: How Courts Assess Large Asset Pools. If your inheritance came in through a family trust rather than directly, see Are Multi-Generational Family Trusts Still Property in Divorce?. And for how money brought in at the start of a relationship is weighed decades later, see Do Initial Contributions Still Count Years Later?.
What should you do if a large inheritance is in your pool?
- Work out the percentage first, then stop treating it as the answer. The share of the pool tells you which of these patterns you are in and it is something the judgment will have to address, but the cases above land anywhere between 55 and 85 per cent for the person who inherited, and the percentage on its own does not tell you where.
- Around a third of the pool is the level at which a court cannot pass the inheritance over, its effect has to be addressed head on. Roverati was decided on the adequacy of the reasons, not on a rule about 30 per cent. An equal split is still open to a judge who explains it, and one member of that court would have upheld exactly such a split.
- Length of relationship is one variable among several. Dinsmore ran 28 years and produced 62.5:37.5, yet the 50 year marriage in Sinclair left the husband at about 15 per cent while the 22 year marriage in Ross & Audley left the husband with close to 28 per cent. What each of you brought in, what each of you did afterwards, and what each of you will need count for as much as the calendar.
- A separate pool is not an escape, it is a different arithmetic. Muir & Royston assessed the inherited category on its own percentages and the wife still took 30 per cent of it, and the aggregate only moved from 58:42 to 55:45 because of a future needs adjustment.
- Keeping inherited money separate helps, but it is not what decides these cases. It is why the trial judge in Bishop could quarantine the money altogether. It is not why the wife in Ross & Audley held 75 per cent, because there the inheritance was thoroughly mixed into family life and the judge refused to say the husband had contributed little to it. What drove that result was who the money came to and why.
- If you did not inherit, build the contributions case and treat future needs as the top-up. Age, health, income and care of children do add to your share, but the adjustments in these cases ran from nothing at all to 12.5 per cent, so the weight of your argument sits in what you contributed over the years.
