Toronto Family Lawyers For Inheritance and Wealth Protection
Questions about how marriage affects an inheritance are common. Clients who are the recipients of an inheritance are often curious about whether the inheritance will be protected from their spouse in the event of a separation or divorce. Other clients wonder whether they would be entitled to their spouse’s inheritance in the same situation.
Division of property in family law is itself a very complex endeavour, let alone the division of property where an inheritance is involved. To protect yourself and your assets, or to ensure you obtain what you may be legally entitled to, it is critical to seek knowledgeable legal advice as early as possible.
At Gelman & Associates, our Toronto inheritance lawyers have provided legal assistance to clients on both sides of the inheritance coin: those who seek to protect their inheritance and those who seek to access their spouse’s. Our property division lawyers in Toronto have significant experience advising clients on equalization. We understand how inheritances have been addressed by courts in the past, and use this experience to guide clients through this challenging area of the law.
To find out how an inheritance lawyer in Toronto may be able to help, schedule a consultation with our legal team today. You can connect with us online or call (844) 736-0200 to begin your legal journey.
How to Exclude an Inheritance from the Equalization Process
In Ontario, married couples who divorce will go through an equalization process, which essentially divides the value of the couple’s total property in half. However, in most circumstances, pursuant to section 4(2) of the Family Law Act, an inheritance can be excluded from this process.
If an inheritance is received before the marriage, it will not be included in the division of assets at the time of divorce. If an inheritance is received after the marriage, its inclusion in the equalization process will depend on the treatment of the inheritance.
For the inheritance to be considered an exclusion under section 4(2), the inheritance must be identifiable and traceable. Real property (i.e. a cottage, boat, piece of art, etc.) is easily identifiable and automatically excluded. Similarly, funds that go into (and stay in) a savings account in the inheritor’s name are readily identifiable and traceable.
In contrast, funds that have been put into a joint account and used to benefit the family’s lifestyle can be difficult to trace and exclude. For instance, an inheritance used to fund family vacations or similar may be more difficult to isolate.
Although Ontario law generally protects an inheritance received after the time of marriage, it does not fully protect subsequent financial gains that have resulted from the inheritance, such as property purchased or growth due to interest.
A Toronto lawyer for inheritance can help review bank records, estate documents, investment statements, purchase documents, and any available correspondence to determine whether the excluded property remains traceable. Where the evidence is incomplete, our team can help assess whether further documentation or negotiation may be required.
| How to Protect Your Inheritance | How to Endanger Your Inheritance |
|---|---|
| Put your inheritance in a separate account in your name only. | Use it to buy family assets or jointly-owned property. |
| Keep all records and documents about your inheritance. | Pay off joint debts using your inheritance. |
| Specify via a prenuptial agreement that your inheritance should not be split upon separation or divorce. | Invest your inheritance into your matrimonial home. |
How the Matrimonial Home Affects Inheritance Rights in Ontario
The matrimonial home is treated differently from many other assets in Ontario family law. Even where one spouse received an inheritance, investing those funds into a home that qualifies as the matrimonial home can create complications. Depending on the facts, this may affect whether the inherited money remains excluded or becomes part of the net family property calculation.
For clients seeking advice from inheritance lawyers in Toronto, this issue often arises when inherited funds are used for a down payment, renovations, mortgage payments, or a jointly owned property. Our lawyers can help you understand the potential consequences before making a major financial decision that involves your or your partner’s inheritance.
How Contractual Agreements Can Affect Inheritance During Separation or Divorce
The law in Ontario allows couples to make contractual arrangements that could change how an inheritance is handled. These are referred to as either:
- Prenuptial Agreements: A contract entered into before marriage.
- Cohabitation Agreements: A contract entered into by cohabitating partners who may later get married.
- Marriage Contracts: A legal agreement between a married couple that is drawn up after the marriage takes place.
A carefully drafted prenuptial agreement, cohabitation agreement, or marriage contract can clarify how gifts, inheritances, investment growth, real estate, and future property acquisitions will be treated if the relationship ends. It is important for each party to seek independent legal advice when drafting legal contracts, especially where one spouse is trying to preserve a family gift or anticipated estate transfer.
Addressing Inheritance Issues for Common Law Partners in Ontario
Inheritance disputes can look different for common law partners. In Ontario, common law spouses generally do not have the same automatic property equalization rights as married spouses. However, they may still have claims involving support, unjust enrichment, resulting trust, or estate issues, depending on the facts. Our Toronto marriage and common law lawyers can help explain how these differences may affect your situation.
If your concern involves a partner passing away without a will, our team can also help you understand how inheritances and family law questions may intersect with wills, estates, and succession planning.
How Our Toronto Inheritance Lawyers Can Help Clients
When it comes to gifts and inheritances that are received either before or during a marriage, many spouses are left with questions. While our lawyers can help clients protect their inheritance during the divorce process (even without a prenup, in some cases), we can also help spouses claim their fair share of net family property upon divorce.
When you work with our inheritance lawyers in Toronto, we will assist with:
- Reviewing financial disclosure and identifying whether inherited property can be traced.
- Advising on equalization, excluded property, and the treatment of investment growth.
- Drafting or reviewing domestic contracts that address inheritances and family gifts.
- Negotiating inheritance-related property issues in separation agreements.
- Representing clients in mediation, negotiation, or court where inheritance disputes remain unresolved
- And more
Frequently Asked Questions About Inheritance & Family Law in Toronto
Are inheritances split in an Ontario divorce?
Not always. In many cases, an inheritance received during marriage may be excluded from equalization if it remains identifiable and traceable under the Family Law Act. However, the details matter, particularly if the funds were mixed with joint assets or used for the matrimonial home throughout the course of a marriage.
Can my spouse claim half of my inheritance if I keep it separate?
Keeping an inheritance separate can help support an exclusion, but it is not the only factor. Toronto inheritance lawyers usually review account records, dates, source documents, and how the funds were used before advising on risk.
What happens if I use my inheritance to pay my mortgage?
Using inherited money to pay a mortgage on a matrimonial home or jointly owned property can complicate the analysis. You should seek legal advice before using inheritance funds for shared assets, debt, renovations, or family expenses.
Can a marriage contract protect a future inheritance?
A marriage contract or prenuptial agreement can address how future gifts and inheritances will be treated if the relationship ends. The agreement should be carefully drafted, and each party should receive independent legal advice before signing off on any agreements.
Do common law partners have inheritance rights in Ontario?
Common law partners do not have the same automatic inheritance and property rights as married spouses. A will, cohabitation agreement, and tailored legal advice can help reduce uncertainty.
Contact Our Toronto Inheritance Lawyers for Advice on How to Protect Your Inheritance
The best time to get advice on how to protect your inheritance is as soon as you know you may receive one (or as soon as you receive it). Even if you are not separated or divorced, our team of knowledgeable inheritance lawyers in Toronto can advise you on how you can best protect your inheritance from future uncertainty. If you are already going through a separation or divorce, we will fight for your best interests.
Call us at (844) 736-0200 or contact us online to see how we can help.
