During separation, spouses or cohabiting partners share the value of the property they accumulated throughout the time they stayed together. Usually, the partner whose property grew the most is expected to share with the other.
Where inheritance is involved, circumstances will dictate whether you will or will not share with your partner the inheritance upon divorce.
In most instances, the inheritance you receive from a loved one will exclude your spouse. However, you may sometimes find yourself in a situation that compels you to share the inheritance with your spouse upon divorce.
It is important to seek advice on how you can protect your inheritance during separation.
There are general recommendations for inheritance protection in Ottawa, which include:
Inheritance received when married.
Inheritance received before marriage.
Protecting the Inheritance Received During a Marriage in Ontario
On the date of separation, you can exclude the value of inheritance you received during the marriage from the net family property.
Here is what you should do to be able to exclude your spouse from the inheritance received during the marriage:
Preserve the inheritance proof, including proof that you deposited the inheritance in an account opened in your sole name
If you have a joint debt, never use the inheritance to settle such debt.
Make sure you do not use the inheritance to acquire or improve a joint home.
Do not buy depreciating assets with your inheritance and try as much not to deplete the inheritance.
In case you use the inheritance to buy assets, keep documents proving that the purchase was made with money from your sole account holding the inheritance.
Enter into a marriage contract. Unlike the above recommendations which are restrictive, entering into a marriage contract will help you protect your inheritance with much flexibility.
Protecting the Inheritance Received Before Marriage in Ontario
You can exclude your spouse from the value of inheritance at the date of marriage.
Here is what you should do to be able to exclude your spouse from the inheritance received before the marriage:
Preserve the proof that you received the inheritance, including the will and other valuable documents from trustees
Open an account for the inheritance in your name and keep proof that you deposited the inheritance in the account. Depending on how the will is drafted, also save all the interest earnings in this account.
Keep records of the inheritance balance/bank statement and the value of other assets purchased with it at the date of marriage.
Never invest the inheritance in any joint assets, as you will lose your deductions should divorce happen.
Never use the inheritance to settle any joint debts, and do not deplete the inheritance.
The drafting and contents of your marriage contract or cohabitation agreement determine what happens to your inheritance upon divorce. If you have any questions about inheritance protection in Ottawa, contact Francis Lawyers for a session with a professional family lawyer.