If you want to keep wealth in the family, be careful how you bequeath it

As the population ages, baby boomers are preparing to make one of the largest transfers of wealth in history. For many families, the underpinning to the transfer of wealth from one generation to the next is the preservation of that wealth notwithstanding the recipient’s marriage. Often times, parents or grandparents will want to ensure that if the recipient’s marriage comes to an end, the wealth will remain in the family and, more precisely, not be shared by the recipient’s spouse.

Ontario’s Family Law Act makes clear that an individual’s property acquired by gift or inheritance from someone other than the recipient’s spouse during the marriage will not be shared between married spouses. Simply put, it is excluded from the recipient spouse’s net worth that would otherwise be shared by the spouses. Taking it one step further, the Family Law Act goes on to provide that property into which the gift or inheritance can be traced will similarly not be shared. Similar rules exist in provinces across Canada.

This article was originally published in the National Post. Visit the National Post to view the complete article.