If you received an inheritance from a parent or grandparent, one of the first questions you may have when your marriage or relationship ends is whether your former partner is entitled to share it. In Alberta, the short answer is: often not, but protecting it depends on what you did with the money and whether you can prove it.
This article explains the general rules under Alberta’s Family Property Act. It is general information, not legal advice about your situation.
The general rule: inheritances can be exempt
Alberta’s Family Property Act applies to married spouses and to adult interdependent (common-law) partners. It generally divides property acquired during the relationship equally. But certain property can be exempt from division, including property received as an inheritance and gifts from third parties, such as a gift from your parents.
The exemption is generally for the value of the inheritance at the time you received it. It does not automatically protect everything that happens to that money afterward.
Growth in value is generally shared
If you inherited $300,000 of shares that are now worth $500,000, the $300,000 value when you received them may be exempt, but the $200,000 increase during the relationship is generally shared, unless it would be unjust to do so. The same approach applies to an inherited cabin, farmland or rental property that has gone up in value.
You have to prove the exemption
The person claiming an exemption has to prove it. That usually means showing:
- that the money or property came from an inheritance (for example, the will and estate accounts)
- how much it was worth when you received it
- where it went afterward
This is often straightforward if the inheritance sat in a separate account in your name. It becomes much harder when the money has moved around.
Where inheritances get lost: mixing and tracing
Exemptions can be weakened or lost in practice when inherited money is mixed with family money. Common examples include:
- Depositing it into a joint account used for household expenses
- Paying down the mortgage on a jointly owned family home
- Buying property in both names, which can raise the argument that you intended to give your partner a share
- Spending it and replacing it later with other savings
Alberta courts may allow you to “trace” an exemption into the asset the money was used to buy, but tracing depends on records and on the facts. The longer ago the inheritance was received, and the more it was mixed with other money, the harder this becomes. Putting inherited money into jointly owned property can also lead a court to conclude that you intended a gift to your partner.
What about an inheritance received after separation?
Property acquired after separation raises different questions, and the court can take the circumstances into account. If you receive, or expect to receive, an inheritance around the time of separation, get advice early about how it may be treated.
Inheritances and support
Even if an inheritance is exempt from property division, income it earns can be relevant to child or spousal support, and your overall financial resources can be considered in spousal support. Exempt from division does not always mean irrelevant.
Practical steps to protect an inheritance
- Keep the paperwork. Save the will, estate accounts, and statements showing when you received the money and where it went.
- Keep it separate if you want it treated as separate. A dedicated account in your name is easiest to trace.
- Think carefully before using it for joint assets, and get advice first if you plan to.
- Consider an agreement. A prenuptial, postnuptial or cohabitation agreement can clearly set out how an inheritance, and its growth, will be treated.
- Watch the deadlines. Property claims must generally be started within two years after a divorce judgment for married spouses, or within two years after an adult interdependent partner knew, or should have known, the relationship had ended.
A quick way to see where you stand
Our free Alberta Family Property Worksheet lets you list assets such as an inheritance and see a rough split between what may be exempt and what is likely shared. For more detail, see our pages on property division and high-asset divorce.
Quick Answers From Violeta
Short videos from our YouTube channel. Tap to play.
Worried your spouse will claim your inheritance?
Inheritance in marriage: yours or ours?
Related reading: Child Support When You Own a Corporation in Alberta · Dividing a Business or Corporation in an Alberta Divorce
Talk to a Calgary family lawyer
Every inheritance has its own history. If you want to understand whether yours is likely to be protected, and what evidence you will need, we can help.
This article is general information about Alberta law and is not legal advice. Reading it does not create a lawyer-client relationship.