From Ferraris to family heirlooms: protecting inherited wealth before marriage in Hong Kong, Singapore and England & Wales

Part 2   Part 3

It is not just the rich and famous who inherit items of value from their families. 

Sometimes it can be the case that the majority of the wealth of one of the parties to a marriage is bound up in an artwork, vintage watches, classic cars, jewellery or an objet d'art gifted to them or inherited from family members. These assets are often deeply personal. A family estate, a watch passed through generations, a family-owned painting, a Ferrari collection built over decades or a rare collectible acquired during childhood may carry significant sentimental and family importance alongside financial value. It may be of intense importance to the individual who owns the artwork that this does not leave the family or that it can be handed down in accordance with the family tradition.

As the value of collectible assets continues to rise, families are paying closer attention to how these items are protected in the context of marriage, succession planning and divorce. Questions frequently arise around whether such assets are considered matrimonial property, how they should be valued, and what steps can be taken to preserve them for future generations.

How, then, does one protect such an asset when contemplating marriage, and the inevitable consideration that the marriage may not endure? This article considers the steps families and individuals in Hong Kong, Singapore and England & Wales can take before marriage to protect inherited wealth, heirlooms and valuable collectible assets.

Why inherited assets can become contentious on divorce

Many individuals enter marriage already owning substantial personal wealth or valuable family assets. These may include artworks, inherited jewellery, family businesses, wine collections, luxury watches, classic cars or sentimental heirlooms that have been preserved for generations.

For some families, these assets represent far more than monetary value. They may form part of the family identity or legacy, with a strong expectation that they will remain within the bloodline and eventually pass to future generations.

Concerns often arise where a family wishes to gift valuable assets to a child before marriage but fears the assets could later become vulnerable in divorce proceedings.

Questions commonly include:

• Will inherited assets automatically remain protected?
• Can collectible assets become matrimonial property over time?
• What happens if inherited wealth is used to buy the matrimonial home?
• Could a court force the sale of a family heirloom?
• How can families document their intentions clearly before marriage?

The answers depend heavily on the circumstances of the marriage, the jurisdiction involved and the way the assets are managed during the relationship.

Pre-nuptial agreements and family wealth protection

The best way to protect the asset from unwanted disposal is to get a clear understanding from the fiancé that this is off limits in the event of marital breakdown, and the easiest way to do that is by drawing up a prenuptial agreement which specifically ring-fences this asset.

A prenuptial agreement can record that the parties fully understood the importance of that family asset to one individual, that it was their intention that it remains within that family with the possibility to pass it down to any children the parties may have in the future, and, if not, to go back into that family.

A clear intention to be bound is a key element of a prenuptial agreement and is crucial to its enforceability. It would be advisable to have the item valued so that there can be no question later that the other party did not know the value and importance of the work.

A well-drafted pre-nuptial agreement can record:

• which assets are intended to remain separate property;
• the sentimental or historical significance of particular items;
• whether the parties intend assets to remain within the wider family;
• how inherited or gifted wealth should be treated on divorce; and
• arrangements relating to future appreciation in value.

Together with the prenuptial agreement, the owner of the asset could also draw up a will to record that it was his wish that the asset would go to their children or back into his family.

If the parties do not sign a prenuptial agreement, it may be that the court, in the event of a divorce, will not include this asset for division, but it is risky. A court will consider an asset which has been received by one party before the marriage as a premarital asset, which will often be considered 'non-matrimonial' for the purposes of asset division. In addition, inherited assets will often fall into this category. A court will be reluctant to take into account an asset which the other party has not contributed to acquiring. Therefore, if there are assets in the marriage which will be able to cover both parties' needs going forward, this valuable asset will be safe and taken out of the asset pool altogether. However, if the family needs to have recourse to this valuable asset, the court may feel it has no choice but to order a sale.

It is important that both parties receive independent legal advice, provide financial disclosure and have sufficient time to consider the agreement before the wedding.

The position in Hong Kong, Singapore and England & Wales

In both Hong Kong and Singapore, courts increasingly recognize properly prepared pre-nuptial agreements, particularly in international or ultra-high net-worth family situations.

However, such agreements are not automatically binding. Courts retain an overriding discretion to determine whether the outcome remains fair at the time of divorce.

In Singapore, pre-marital, inherited, and gifted assets are regarded as non-matrimonial in nature. They are therefore, by default, not included in the pool of assets for division. However, certain circumstances could lead to such assets being divided between the parties. This would include situations where such assets are ordinarily used in the course of the marriage, improved by the other spouse, or (for assets of a fungible nature) commingled with matrimonial assets. If the owner-spouse communicates to the other spouse unequivocally an intention to share the pre-marital, inherited, or gifted asset with the other spouse or with the greater family, this could also prejudice the protection afforded to the asset by the default law.

Similarly in Hong Kong, courts may distinguish between matrimonial and non-matrimonial property, particularly where inherited assets have remained clearly separate from jointly acquired wealth. Courts are often reluctant to force the sale of assets carrying substantial sentimental or historical significance. In a case before the family court in 2021, the court had to consider an issue involving a painting by a famous artist which had been handed down originally by the artist to the husband's family over 120 years. The family was described in the judgment as well-educated but lower middle class and the husband's father took particular pride in the fact that the painting had never been sold and that he had been the custodian for future generations. The dispute came about following the transfer of the painting from the husband to his father and the wife, alleging that this was a marital asset which had been transferred out of the marriage in order to defeat her claims for ancillary relief, sought an injunction to set aside the transfer. The court found that it was clear from the evidence that this heirloom was intended to remain in the family and that it was 'inherited property' in the classic sense of the term. It would not follow that, even if the court allowed the transfer to be set aside, that she would be entitled to half its value or 'indeed to any of its value in any event'.

In England & Wales, nuptial agreements are not legally binding but in certain circumstances can be influential or even determinative. The court will look at the circumstances at the time that the agreement was made – whether both parties were freely making an informed decision – and the circumstances at the time of the divorce – whether the agreement, if implemented, will result in a fair outcome and meet the reasonable needs of the parties and, most importantly, any children. The government recently published a consultation which included proposals for making Qualifying Nuptial Agreements legally binding if they meet certain requirements, and so there is scope for nuptial agreements to carry greater weight as a result of law reform.

Identifying and categorizing matrimonial and non-matrimonial property in a nuptial agreement can be helpful for ringfencing assets and protecting them on divorce. Preserving pre-marital assets is often a motivation for signing nuptial agreements. The court's concern will be whether it is possible to achieve that preservation whilst still meeting everyone's reasonable needs. The court will also look at how an asset was treated during the relationship to determine whether it has become matrimonial over time.

Early planning is essential

Inherited assets can become vulnerable where they are mixed with matrimonial property or used extensively for family purposes. They may include using inherited funds to purchase the family home; depositing inherited money into joint accounts; using inherited wealth to fund family businesses; gifting interests in family assets to a spouse; or jointly managing valuable collections over many years.

Over time, courts may conclude that certain assets have effectively become part of the shared matrimonial economy.

This is one reason why early planning is often critical. Discussions around pre-nuptial agreements and inherited wealth can sometimes feel uncomfortable. However, proactive planning often helps reduce future uncertainty and conflict.

For families with valuable heirlooms, collectible assets or significant inherited wealth, early legal and succession planning can help preserve both family relationships and long-term wealth objectives.

This article is part of a three-part series on marriage, divorce and valuable assets in Hong Kong, Singapore and England & Wales. Read our related articles on safeguarding valuable collections during marriage here and disputes over collectible assets after marriage here.

You can find out more about how our global divorce and family team helps international families navigate complex, cross-border disputes here.