What happens to gifts or inheritances received during the marriage?
Gifts and inheritances acquired during a relationship are often a subject of considerable interest when couples separate.
Under both the BC Family Law Act and the Alberta Family Property Act, gifts, inheritances, and settlements resulting from personal injury claims are considered exempt or excluded property. This means that, typically, these assets are not divided between spouses upon separation.
Important Considerations:
- Keeping Records – to maintain the exempt status of gifts or inheritances, proper documentation and records are crucial. This could include a copy of the Will or correspondence that confirms the date and the amount of any inheritances.
- Commingling of Assets – gifts or inheritances may lose their exempt status if they are mixed with marital assets or owned in joint names – such as a joint bank account.
- Increased Value – any increase in value of the exempt or excluded property throughout the course of the relationship could also be subject to division. For example, if one spouse owned a home prior to the relationship and that homes value increased by $100,000, that $100,000 would likely be subject to division.
In summary, while gifts and inheritances are generally exempt from property division, certain conditions and actions can change their status. Since these issues can be quite complex, legal advice is highly recommended.
