Every marriage looks different. Each couple has to decide how to structure their lives and their finances in a way that fits the partnership that they want to build. Sometimes that means sharing everything, and sometimes it means managing your own finances and contributing to shared expenses. When it comes to inheritances, especially one received during a marriage, many people want to know: Can I keep it separate?
The short answer is yes, but only if you take the right steps. In this article, we’ll explain how Canadian family law treats inherited property, when an inheritance can become part of the marital estate, and how to protect it before and during marriage.
In Canadian family law, separate property refers to assets that are excluded from the equal division of family property during a divorce or separation. In most provinces, this includes:
That said, just receiving an inheritance doesn’t automatically guarantee you’ll keep it if the relationship ends. How you handle that inheritance makes a big difference in whether it stays separate from marital assets.
To keep your inheritance legally separate, you need to take proactive steps, including:
Jointly helps couples do just that: create agreements that protect what matters, without expensive legal fees or confusing legal language.
In most provinces (including Ontario, British Columbia, and Alberta), marital property generally includes:
In a divorce, this property is typically divided equally. However, excluded property, like inheritance or gifts, is not, as long as it remains separate.
Gifts from third parties (like your parents or a family friend) are treated similarly to inheritances. If they were intended only for you and not for both partners, they may be excluded from division. But again, the way you use that gift matters. A cash gift spent on a joint renovation of the family home, for example, may no longer be considered separate.
Even though an inheritance is technically “excluded property,” it can quickly become shared if you’re not careful. Let’s look at a few common situations where people lose their claim to inherited funds.
Buying a house with inherited money might seem like a smart move, but if you put your spouse’s name on the title or use it to purchase a matrimonial home, the inheritance may lose its protected status.
In Ontario, for example, the matrimonial home is always included in property division, even if it was purchased with separate funds. That means that without a prenup, you could lose half the value, even if the home was bought entirely with your inheritance.
Once you combine (or “commingle”) your inheritance with joint bank accounts, investments, or business ventures, it can become difficult to prove which part of your property is truly separate. Courts often see this as an intention to share the money and will divide it accordingly.
To avoid this, always:
The most effective way to protect your inheritance if you’re married is through a prenuptial agreement (before marriage) or postnuptial agreement (after marriage).
These agreements can:
Even if you’ve already received the inheritance, it’s not too late. A postnup is just as effective especially when created with a platform like Jointly, which makes it easy and affordable for Canadian couples.
Many provinces have laws that override the inheritance exclusion depending on how the funds are used. For example:
The rules are complex, but a good agreement can help you stay in control of what happens.
If your marriage ends and there’s no legal agreement in place, courts will look at:
If you’ve kept the inheritance clearly separate and have documentation to prove it, you have a much stronger chance of keeping it after divorce.
Property you owned before marriage is usually considered excluded, but again, it depends on how you treated it during the marriage.
For example:
Even if your pre-marriage property stays yours, any increase in value during the marriage is often split—unless your agreement says otherwise.
It depends. If you kept the inheritance separate (different account, no joint purchases) your spouse may not have a claim. But if the funds were used to buy the family home, pay off joint debt, or mixed with shared money, they may be treated as joint assets.
A legal agreement is the only sure way to protect your inheritance from being divided.
Unless it’s excluded (like a gift or inheritance), property acquired during marriage is typically shared 50/50. This includes:
If you want to keep something separate, especially something important like a family cottage or inheritance, you need to take clear steps in advance.
At Jointly, we believe that protecting your financial future shouldn’t be intimidating or expensive.
We help Canadian couples create personalized, legally sound prenuptial and postnuptial agreements that clearly define separate and joint property including inheritance.
With Jointly, you get:
Whether you’ve already received an inheritance or want to protect future gifts, we make it simple to create an agreement that works for both of you.
Inheritance is personal, but protecting it doesn’t have to be complicated.
Start your prenup or postnup today.