On average, a Canadian receives anywhere from $30,000 to $85,000 as inheritance. That makes inheritance a meaningful part of your financial future.
“But when divorce enters the picture, things can get complicated,” Shounak Mehta, Founder and Principal Lawyer at Juriscorp Law, says. “Without proper planning, an inheritance might be treated as part of the marital property, risking loss in a divorce settlement.”
This blog explains how you can protect an inheritance from divorce risks, using clear legal steps that give you peace of mind.
Understand How Inheritances Are Treated in Divorce
First, it helps to know how inheritances typically factor into divorce proceedings in Alberta.
Unlike regular property, an inheritance is not automatically considered marital property.
However, this depends on how the inheritance is handled during the marriage
If you keep an inheritance separate and don’t mix it with marital assets, it often stays protected. But if you use the inheritance for joint expenses or invest it in shared property, it may become subject to division.
| Don’t Leave Your Inheritance to “It’s Probably Be Fine” Take charge of your future before it becomes an issue [Book a Consultation] |
4 Practical Ways to Protect Your Inheritance
1. Keep the Inheritance Separate
Avoid depositing the inheritance into joint accounts or using it for family expenses. Maintain a clear financial separation to demonstrate that this money remains your individual property.
2. Use a Trust
Setting up a trust can protect an inheritance by keeping it legally separate from marital property. A trust outlines exactly how the inheritance is used and who benefits, which helps protect it during divorce proceedings.
3. Draft a Cohabitation or Marriage Agreement
A legally binding agreement can specify that your inheritance remains your separate property, even if it’s used during the marriage.
Whereas prenups and cohabitations were of a “Gasp!” conversation, Canadian GenZers are far more open to it. In fact, 52% say they would sign a prenup or cohabitation agreement with their partner.
4. Keep Documentation Updated
Keep records of how the inheritance is handled. Bank statements, property deeds, and transaction records can prove the inheritance was kept separate. Updated wills and powers of attorney can also clarify your intentions.
| Learn to protect your interests: How Long Does the Probate Process Take in Alberta? Protect Your Legacy with Estate Planning How Often Should You Update Your Will? |
FAQs on Protecting Your Inheritance from Divorce
Q1: Is an inheritance always protected from division in divorce?
Not always. It depends on whether you keep the inheritance separate or mix it with marital property. Keeping it separate and documenting it is key.
Q2: Can a trust guarantee inheritance protection?
A trust strengthens protection by legally separating assets. It’s not a guarantee but a strong safeguard when properly set up.
Q3: Do I need a marriage agreement to protect my inheritance?
A marriage agreement helps clarify property rights and protects your inheritance in case of divorce. Juriscorp Law can draft agreements tailored to your needs.
Q4: What if I’ve already mixed my inheritance with joint assets?
It’s best to speak with a lawyer quickly. There may still be options to protect your interests depending on your situation.
Q5: Can Juriscorp Law help with estate and family law together?
Yes. Our full-service firm supports you from wills and trusts to family agreements, providing continuity and a clear process.
Protect Your Inheritance with Confidence
Don’t leave your inheritance at risk. At Juriscorp Law, we offer clear guidance and practical solutions to protect what matters most.
Let’s talk about your options and take the right steps today.
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Ready to protect your inheritance? Get clear advice and support you can trust. Contact Juriscorp Law for a free consultation today.