It is not uncommon for married couples to become financially interdependent. For some, this could happen right after a marriage when they set up a joint bank account and merge their assets. For others, combining financial funds might not happen for some time.
In either scenario, when one spouse receives an inheritance, it could lead to financial complications in the future, especially in the instance of a divorce as these family funds could be at risk of division if a plan is not in place. A skilled high-asset divorce lawyer from The Riley Divorce & Family Law Firm could help you take a proactive approach to avoid these complications. Let our experienced Kawartha Lakes divorce and inheritance lawyers help you understand your options.
To understand what might happen with an inheritance during a divorce, it is vital to know the basics of property division in Ontario. When couples break up and dissolve their marriage, the divorce process determines how their shared property is divided.
Typically, spouses will leave a marriage with assets and property that they owned prior to the union. The major issue that must be decided during these proceedings is how these marital assets should be distributed. However, there are often disputes over what counts as marital property and what does not. Any property that is jointly owned by the party is split evenly. This could be complicated, especially when the assets a couple owns are not liquid and cannot be easily split. For real estate or larger purchases, it is usually necessary for the parties to sell the property and divide the proceeds to satisfy equalization payments.
There are some exceptions when a 50/50 split is not appropriate. These instances are referred to as variation of share and are the only circumstance where one spouse might receive more capital than the other. Dividing assets in this way requires court approval, which is never guaranteed. However, a Kawartha Lakes divorce lawyer could help you navigate the various issues that may show up during matters surrounding inheritance division.
In general, an individual’s inheritance is not considered part of the marital estate. That means it is not subject to division and is not used to calculate equalization payments. That does not mean a spouse going through a divorce has nothing to worry about. There are circumstances that could still lead to a spouse having what they inherit from their loved ones treated as marital property.
An inheritance is treated as individual property if it is held separately and not used for family expenses. Once this money is used for joint expenses it might be considered comingled and be subject to division. This is particularly true when it comes to using these funds for purchases that benefit the couple, like buying a family car, as these purchases are treated as shared assets.
A Kawartha Lakes lawyer could help you navigate these divorce and inheritance issues. Our team could also help you create a plan to protect your assets, even before they are transferred, and assist with ensuring that the money is not used in a way that might make it available to future distribution in a divorce.
When you have questions surrounding inherited assets in a divorce, it is important to get answers right away. There are ways to protect these funds from distribution, but only if you act carefully.
The Kawartha Lakes divorce and inheritance lawyers at The Riley Divorce & Family Law Firm are available around the clock to help you with a case. Call our firm to schedule an initial consultation today.
Now you can have your Consultation with Paul Riley any time from the comfort of your own home. With video calls from Zoom, your Team at The Riley Divorce & Family Law Firm can meet with you virtually, and learn about your case. All you need is a smartphone, tablet, laptop, or desktop with a built-in camera and microphone.
Paul Riley Law Office
