How to Protect Your Inheritance in Divorce or Separation

In Canada, there are ways for an individual to protect their inheritance in the event they get divorced or separated. However, the rules can be very different depending on whether the estate is received before, during, or after marriage. Read this article to learn about the steps you can take.

Legal Advice in Receiving an Inheritance

The lawyer can provide you with a legal document that states that the inheritance is separate property. They will also make a will to ensure that the legacy is not attached to the marital estate. This is a way to ensure the inheritance is protected from a future spouse’s potential claims.

Inheritance Received Before a Marriage 

This scenario is not common; however, if an individual inherits a significant amount of money before committing to a marriage or common-law relationship, then the inheritance is their separate property.  To give your inheritance extra protection in case your spouse claims it, you should keep copies of any records that prove you got the bequest and how much money you got from the estate. Do not mix this inherited money with property or assets that are jointly owned or considered marital or family assets.

Inheritance Received During Marriage

In this situation, an inheritance received during a marriage or common-law relationship is still considered separate property. You can put the estate in a separate bank account or use it to pay off debts that are not regarded as marital. This way, your inheritance can be protected from a spouse’s potential claims.

Inheritance Received After a Marriage 

In this case, a spouse can argue that an individual has increased their standard of living with the inheritance and, therefore, is a marital asset. The legacy can be attached to the marital estate if a spouse makes this claim.  This can be complicated, so you should contact a competent lawyer or divorce financial planner. They will be able to provide you with a statement or document that specifies the inheritance as separate property.

Choosing a Course of Action After an Inheritance

If you receive an inheritance, it is always best that you discuss your options with a lawyer and a financial planner. A lawyer will help you ensure that the inheritance is not subject to a spouse’s potential claims. They can also draft a will that can guarantee it is in the safe hands of your family. When selecting a lawyer, always consider the following:

• Legal issue
• Financial situation
• Timeline
• Geographical location

Once you have selected a lawyer, it is important to do the following:

• Always make sure you understand the legal matter, instructions, and how much the lawyer will charge you.
• Take notes during your first meeting or call. Ask your lawyer to explain anything you did not understand.
• Keep track of the time your lawyer spends working on your case. This will help you to know what you will be charged for. Know how the fee structure works for your lawyer. The lawyer should tell you about this beforehand.
• Demand prompt responses from your lawyer.

Conclusion

Knowing how to protect an inheritance in the event of a divorce or separation is crucial. By employing the expertise of relevant professionals, you can take measures to increase the layer of protection for your rightful inheritance. If you need guidance with Alberta divorce finances, rely on Alberta Divorce Finances. We are here to help you understand your finances in the event of a divorce. Request a free consultation now.