Given the nature of British Columbia’s super-charged property market, divorcing couples frequently come to us with questions about inheritance. Will any inheritance be split evenly in a divorce? Is the inheritance ring-fenced and kept by the person who received the income?

The division of property in a divorce is simplified under the BC Family Law Act. Property is categorized as either Family Property, or Excluded Property.

What is Family Property?

Family Property is the ‘stuff’ you acquire during the course of a marriage. It’s irrelevant whether it’s acquired together or separately, and the law doesn’t care what name is listed as the owner. Common examples of Family Property include things like the family home, bank accounts, pensions and insurance policies. As the name suggests, these things are usually split evenly during a divorce.

What is Excluded Property?

Now, we get to the interesting part. Excluded Property includes the type of things owned by either spouse before the relationship commenced, and a few categories of other property regardless of when it is acquired. This type of property does NOT need to be split equally upon separation, unless certain exceptional circumstances arise. Yes, inheritances are on this list. Alongside other items such as some types of trust interests, gifts, and insurance payouts (not including for wage loss).

Unfortunately, there are some finer details we need to cover regarding inheritance.

What if the Inheritance Increases in Value?

One of the nice aspects of an inheritance is its tendency to increase in value. Even though we’ve shown inheritances are Excluded Property, an increase in the value of the inheritance during the time the couple lived together is considered Family Property. While the initial recipient will keep the original sum, any profit is to be divided equally.

Here to Help

As family law experts, the team at Westside Family Law has been a trusted advisor to countless clients going through the difficult divorce process. Need assistance with any aspect of dividing property during a divorce? Contact us and we’ll be happy to assist.