Protecting Premarital Assets such as Gifts and Inheritance without a Prenuptial Agreement

protecting premarital assets

In our previous article, we explored how a premarital home purchased before marriage can remain as a premarital asset. We also explored how it can be transformed into a matrimonial asset. It becomes part of the matrimonial pool and is subject to division upon divorce.

This principle applies in any or all assets acquired before marriage – not just a premarital home. Therefore, this article will focus on how a party can protect premarital assets such as gifts and inheritance without a prenuptial agreement in place.

The general rule is that if the property is acquired as a gift or inheritance from a third party, the property will not amount to a marital asset under s112(10) of the Women’s Charter unless there had been;

  • substantial improvement made to the asset as a result of the other party or by both, or when there had been a clear express intention that the gift was meant for both spouses.
  • If both i) and ii) are absent, then whether the spouse inherited the assets intended for the inheritance to form part of the matrimonial pool. This is a factual inquiry.

Where inheritance monies were used to acquire a new asset, this new asset shall remain as an asset received as a gift and will be excluded from the pool of matrimonial assets unless an argument for its inclusion can be shown.

A literal transformation in the asset is not sufficient to make it a matrimonial asset. For example, suppose a party acquires property after marriage using inheritance monies and includes the other party as a joint tenant in this property.

In that case, this suggests that the spouse who inherited the assets intended the property to be part of the matrimonial pool of assets.

The same argument applies if a party deposits his/her inheritance monies into a joint account. On the other hand, a spouse who kept her inheritance monies in a separate account suggests otherwise.

Due to this issue’s complexity, individuals who wish to protect gifts/ inheritance given to them by their ancestors are encouraged to consult one of our family lawyers for guidance.

“At Gloria James-Civetta & Co, our goal is to help you find a resolution that works for both you and your family. When you contact our expert team, we will provide you with a consultation, tailored to your specific circumstances and goals in mind.”

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