Husband and wife have a marriage bust-up over spending £20k inheritance

A woman shared her experience after she got into an argument with her husband over a £20,000 inheritance pay-out.

In an anonymous letter in The Telegraph, she explained that she had recently come into a considerable sum of money after the passing of her mother.

However, the problem arose when her husband had strong opinions on how the money should be spent, which the woman disagreed with.

The woman explained that the two of them had gotten married last summer, shortly after which her mother died, leaving her £20000 in inheritance, reports Mirror Online.

Her husband has since lost his job and is currently setting up a company specialising in installing home gyms.

He asked to use her £20,000 inheritance to inject some cash into the start-up and was visibly offended when she turned down this request.

The reader said: “To me, it’s security for our future. He argues that his new business will be our security, and that it’s ‘our money’ not mine. He can’t understand why I won’t go along with it, suggesting it’s because I don’t believe in him.

"If I’m honest, I don’t have complete confidence. He has a history of trying things then moving on to the next. I don’t know how to protect my inheritance and not offend him.”

The Mirror asked Martin Holdsworth, founder and director of IDR law which specialises in sorting out contentious wills, probate and trust disputes, to look at the example and explain some background information surrounding inheritances landing in marriages and the problems that can ensue.

Martin reminded us that of course an inheritance (or lack of one) follows a death, so it’s important to remember that anything that happens around that time occurs against a complex background of grief, loss and often anger.

Inheritances are now larger than they have ever been, according to Kings Court Trust, with 5.5 trillion set to be passing intergenerationally between 2017 and 2047.

As soon as you begin to commingle inheritance monies with marital assets (such as a business), it becomes absorbed into the joint pot on any subsequent divorce.

This of course has the potential to cause problems further down the line.

Martin points out that investing in your partner’s business carries real risk. You can protect the investment by drafting agreements but the harsh reality is that if the business fails, the investment will be lost.

Any business venture needs to be assessed on its merits before any investment is considered.

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A good balance between wanting to support a spouse and also wanting to protect the family by retaining an investment fund would be to agree to match the level of any investment the partner obtains from third parties (such as a bank, an investor or a grant). This ensures that the business is independently weighed and measured for prospects of success.

Using the above case as a direct example, Martin expressed concern regarding whether the mother of the reader had discussions in life with her daughter surrounding the inheritance.

If such conversations had taken place then other avenues could have been explored, such as ensuring that the inheritance passes from mother to daughter in a form that is protected with the use of a trust or similar route.

Martin said: “With a third of us now relying on an inheritance to discharge a mortgage, debts or fund retirement, what happens on the death of a loved one has become central to the financial wellbeing of families.

"Inheritances are often at a level that is life changing, very few of us receive large lump sums of cash in our lifetime in any way other than inheritance.

"Family discussions about how this intergenerational passing of wealth should be dealt with is crucial. Find out what goes where and how you can protect you children from calls upon the inheritance you are passing on.

"Understand what they are likely to face in terms of calls on that inheritance and help them manage it now, before it’s too late."

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