In Canada, family property rules vary by province. As such, before investigating any property issues with your spouse, ensure that you are looking at the correct jurisdiction. Here, we will discuss whether inheritances are “family property” for the purpose of division in Ontario.
In Ontario, married spouses presumptively equalize their net family property, per the Family Law Act. The general idea is that each spouse leaves the marriage with roughly the same value acquired during it. This applies to assets and debts regardless of whose name it is in. For example, a bank account opened solely by a spouse during the marriage is still included in equalization. However, there are certain exceptions to this rule, referred to as “excluded property”.
Per Section 4(2) of the Family Law Act, inheritances are considered excluded property. Therefore, on their face, they are not subject to division. However, this is dependent upon the subsequent treatment of that inheritance. For example, “matrimonial homes” are subject to division between spouses, even where they were inherited by a spouse. A matrimonial home is a home that you and your spouses lived in at the time of separation as your family residence.
The presumption of advancement in Ontario assumes that where a spouse has put property jointly in the name of the other spouse, they intended to hold that property jointly. If your inheritance has subsequently been put under your spouse’s names, jointly or solely, you may have lost part of or all of your exclusion. Some common examples of this include:
- Placing inherited funds into a joint bank account.
- Using inherited funds to renovate or pay down the mortgage of your matrimonial home.
- Placing an inherited non-matrimonial home, such as a cottage or rental property, under both you and your spouse’s name.
Determining excluded property requires a careful analysis of the circumstances of your inheritance. Our expert family team at the Ross Firm can help. Contact [email protected] to set up your consultation.
Disclaimer: the above information does not constitute legal advice. We strongly recommend obtaining independent legal advice with respect to any legal issues.
