How To Avoid Losing Some Serious Money in Your Separation or Divorce in Ontario!
When was the last time you thought you could ever save some money in a separation or divorce?
You can save money if you make sure you follow certain procedures in dealing with gifts and inheritances which you get during your marriage.
I will discuss this important issue in this video.
Hi, my name is Thomas O’Malley. I’m an experienced family lawyer in Durham Region and the GTA.
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You are allowed to exclude gifts and inheritances from the property calculation in your separation or divorce when you’re married.
You have to have this gift or inheritance on your date of separation to exclude from the property calculation. If you spent the inheritance from your Aunt Martha on a few trips to Hawaii and the Caribbean, you’re out of luck!
You need to put any money that you receive as a gift or inheritance during the marriage in a separate bank account or use it to buy investments that are in your name alone.
If you place the funds in a joint bank account with your spouse, you are mixing or “commingling” the funds with other funds in the joint bank account. In most cases, you will lose your ability to claim exclusion of all these funds since you have mixed them with other funds in the joint bank account.
Here’s a key point: don’t use money that you receive as a gift or inheritance as part of a down payment for a home or use this money to pay down your mortgage or home line or credit.
You cannot make this exclusion when you use this money in any way in dealing with the matrimonial home pursuant to some specific sections of the Ontario Family Law Act.
If you use money received from a gift or inheritance to purchase an investment or any other item, such as a car, you can still exclude the value of that gift or inheritance as long as you have that investment or item on the date of separation.
If the value of the asset increases from the time of purchase to the date of separation, you get to exclude the portion of the value that can be traced to the gift or inheritances funds that were used to help purchase the asset or item.
For example, you purchase stocks in the amount of $100,000 from a gift or inheritance of $100,000 that you received during your marriage. However, your stocks are now worth $500,000 on the date of your separation (I want the name of your investment advisor in that case!). You get to exclude the complete value of the stocks which are worth $500,000 on the date of separation.
If you received a gift or inheritance before your date of marriage and the value of those funds has increased since the date of separation from investments or stocks, for example, you get to deduct the pre-marriage value of this gift or inheritance. You have to include any increase in value of these investments during the marriage in your property calculation.
You can easily see how this area of family law can get very complicated very quickly.
Make sure you get the advice of an experienced family lawyer to help you with your property calculation to protect your family law rights in your separation or divorce.
If you have any questions about your separation, divorce or family law case and you would like our help, feel free to contact on my Facebook law office page, that’s O’Malley Family Law, or call me at 905-434-8837 and I’ll point in you in the right direction.
Click here to join my free Facebook GTA and Durham Region separation and divorce support group: GTA and Durham Region Separation and Divorce Support Group
Please make sure to share this important information and video with your friends, family members and co-workers so that it helps more people avoid serious problems in their separation or divorce before it’s too late.