Is an Inheritance Divided in a Divorce in British Columbia?

If you are separating and have received, or expect to receive, an inheritance, you probably want to know whether your spouse can claim part of it. The answer depends on British Columbia family law and on what has happened to the inheritance since you received it.

This article explains the estate-side facts that often matter, such as when you actually receive property and how it is taxed, and what to gather before speaking with a family lawyer. It does not set out the family property rules themselves, because how they apply turns on the details of your situation.

This article covers the law of British Columbia.

Two questions, not one

People often ask a single question, but there are really two. First, is the inheritance something your spouse can claim a share of at all? Second, if it started as separate, did anything happen afterwards that could affect how it is treated?

How each question applies to you depends on your facts and on the family property rules, so it is worth confirming with a family lawyer. A family lawyer can apply those rules to the way you have actually handled the money. The estate rules do set out how a personal representative administers the estate and when it can be distributed, which can affect timing.

When an inheritance is actually yours

Exactly when inherited property becomes yours depends on the estate and your situation, so it is worth confirming with a lawyer. A personal representative has authority to administer and distribute the estate and must account to the people they owe a duty to account to. Land without a right of survivorship vests in the personal representative, who holds it in trust for the person beneficially entitled. Jointly owned land with a right of survivorship does not pass that way.

Except by court order, the representative must not distribute the estate within the 210 days after the grant is issued, although consent exceptions exist. If a proceeding that may affect distribution has started, court consent is needed even after that period. So an expected inheritance may still be months away when you separate, and its terms can matter for how it is treated.

Tax and probate points to know

Most gifts and inheritances are amounts that individuals do not have to report as income on their tax return. The estate itself has obligations. BC probate fees are paid by the estate, not by the beneficiary, and no fee is payable if the estate's value does not exceed $25,000.

The deceased's final return is due April 30 of the year after death if death occurred between January 1 and October 31, or 6 months after death if it occurred between November 1 and December 31. A representative who distributes before getting a clearance certificate can be personally liable for unpaid amounts, which is another reason payment can take time.

A spouse's status and the will

Separation can also change what a will does. If the will-maker and spouse cease to be spouses after the will is made, gifts to the former spouse and their appointment as executor or trustee are revoked, subject to any contrary intention in the will. Married spouses cease to be spouses under the estate law when an event occurs that creates an interest in family property under Part 5 of the Family Law Act, such as separation.

Common-law partners are spouses only if they lived together for at least 2 years, and they cease to be spouses when one or both end the relationship. Once gifts to a former spouse have been revoked, a later reconciliation does not reverse the revocation. Separately, spouses are not treated as separated in the first place if, within one year, they resume living together primarily to reconcile and live together for periods totalling at least 90 days. If you are the will-maker, review your own will after separating.

What to do next

• Keep the will, the notice of proposed application and any estate correspondence.
• Note the date of death and the date of any grant.
• Record where inherited money went: whether it stayed in an account in your name alone, or was used for a home or debts.
• Avoid moving inherited funds into shared accounts or property until you have advice.
• Ask a family lawyer how the inheritance is likely to be treated on your facts, and an accountant about tax.

Frequently asked questions