Do I Have to Share My Inheritance with My Ex in Ontario?
Here’s a scenario we hear all the time: “I inherited money from a family member. Do I have to split it with my ex now that we’re separating?”
The short answer? It depends.
Welcome to the intersection of estate planning and family law - where inheritance meets equalization, and things get legally spicy. Let’s break it down in plain English, so you know where you (and your inheritance) stand.
Note that the rules are very different for married vs common law spouses. For the purposes of this article, I’ve focused on how the law applies to married spouses.
First, a Quick Primer on Equalization in Ontario
In Ontario, when married couples separate, we don’t automatically split all the property down the middle. Instead, we use an “equalization” system under the Family Law Act.
Here’s the gist:
Each spouse calculates their net worth on the date of separation and subtracts their net worth on the date of marriage.
The difference is their net family property.
The spouse with the higher number pays the other half the difference so both parties walk away with 50% of the growth that occurred during the marriage.
But some property is excluded from this equation.
Inheritances Can Be Excluded… Sometimes
One of the most common types of excluded property? You guessed it: inheritances.
If you receive an inheritance while you’re married, and you don’t commingle it (for example, you don’t use it to buy the matrimonial home or put it into a joint account), it can be excluded from your net family property when calculating equalization.
That means: you don’t have to share it as long as:
you keep it separate;
you track it properly;
and you still own it (or assets that were acquired with it) at the time of separation.
But here's where it gets tricky…
Timing Is Everything
If you got your inheritance before you were married, it’s not automatically excluded. Instead, the value of that inheritance on your date of marriage becomes part of your starting balance.
The growth in value during the marriage, unless protected by a marriage contract, is up for equalization. So, if that $50,000 inheritance turned into $150,000 during your marriage, your ex may have a claim to the increase.
Also worth noting: if you use your inheritance to buy a matrimonial home, even if it's just in your name, it's no longer excluded, unless you’ve got a marriage contract that says otherwise.
The Role of the “Family Law Clause”
You might’ve heard of this magical clause that appears in many Ontario wills and trusts: the so-called family law clause. It usually says something like:
“This gift, any substitute for it, and any income it earns should remain the separate property of the beneficiary and be excluded from net family property under the Family Law Act.”
Sounds good, right?
Here’s what it actually does:
It helps ensure that any income generated from the inheritance (think interest, dividends, or rental income) is also excluded from equalization, but only if you receive the inheritance during the marriage.
It doesn’t automatically protect an inheritance received before marriage, or if you commingled the funds.
So, while it’s a great clause (and we use it all the time when drafting wills), it’s not bulletproof. The protection it offers has limits.
How to Actually Protect Your Inheritance
If you want to make sure your inheritance stays yours (and only yours), here’s what we recommend:
✅ Keep it separate: Don’t put inherited money into joint accounts or use it for joint expenses.
✅ Avoid using it to buy or improve the matrimonial home: That’s the fastest way to lose the exclusion.
✅ Keep good records: Paper trails matter. You may need to trace the funds years later.
✅ Get a marriage contract: This is the gold standard. You and your spouse can agree in advance that inheritances and their growth will be excluded — no surprises later.
✅ Talk to both an estate planning lawyer and a family lawyer: Yes, we’re biased. But this is one area where you really need both perspectives working together.
Final Thoughts
You don’t automatically have to share your inheritance with your ex in Ontario, but whether you get to keep it depends on how and when you received it, what you did with it, and how well you’ve documented it.
Inheritances can be a sensitive topic, emotionally and legally, especially during a separation. Let’s make sure your intentions (or those of a loved one who gifted you the inheritance) are respected.
At Passageway Law, we help you navigate these intersections with clarity and confidence, whether you’re planning your estate, drafting a marriage contract, or untangling things during a separation.
Disclaimer: This post is for informational purposes only and is not legal advice. For personalized guidance on how your inheritance may be treated during separation, please consult a qualified family lawyer.