An Inheritance Is a Legacy, Not a Joint Asset

The biggest mistake you can make with an inheritance in British Columbia is commingling—depositing the funds into a joint bank account. This one, innocent-seeming act can legally transform your "excluded" property into "family" property, making it divisible in a separation. The solution is to pause and create a separate, "safe harbour" account before you deposit a single dollar.

The moment you receive an inheritance is rarely one of simple joy.

It’s a complex, quiet moment, often layered with grief, gratitude, and a new, sudden weight of responsibility.

For many, this is the first encounter with that "sudden wealth" chaos—a disorienting mix of anxiety and pressure. You are not just receiving money; you are receiving a legacy.

And in that disquieting moment, it is terrifyingly easy to make one small, irreversible mistake.

Perhaps the most common—and most devastating—mistake I see is also the most innocent-sounding: commingling.

It's the simple act of depositing an inheritance cheque into the same joint bank account you share with your spouse. It's using that money to pay down the mortgage on the family home. These seem like logical, even collaborative, financial moves.

But in British Columbia, these innocent acts can permanently dissolve the protected status of your inheritance.

The hard truth is this: The moment you commingle, you may lose the ability to protect that legacy forever.

Why Is This So Dangerous in British Columbia?

The law in British Columbia (specifically the Family Law Act) is built on a foundation of fairness. It defines "family property" as what you built together, which is to be divided equally if you separate.

However, the Act also makes a crucial exception for "excluded property." This includes gifts and—most importantly—inheritances.

An inheritance is intended for you, not for "the family." It is legally separate.

But here’s the critical catch: This protection is not automatic. It must be actively maintained.

The Act essentially says that if you treat your separate property like family property—by mixing it in a joint account—the law will see it as family property.

That single bank deposit or mortgage payment demonstrates an intention to share the asset, and in doing so, you can legally erase its "excluded" status.

Your First Act of Stewardship: The 3-Step Plan

If you have received an inheritance, your first act of stewardship is not to invest it. It is to protect it.

This is not an act of mistrust against your spouse. It is an act of clarity and respect for the person who left you the legacy. You are honouring their specific intention.

Here is the simple, 3-step plan to do this right.

Step 1: The 90-Day Pause

Your first job isn't to do something; it's to not do the wrong thing. This "decision-free zone" is the perfect time to protect your inheritance³³³³. Before you deposit a single dollar, open a new bank account in your name only. This will be the "safe harbour" for the funds.

Step 2: The 'One-Page' Inventory (The Step We Do Together)

This is where we eliminate the chaos. Instead of giving you "homework" ⁴, a guide's job is to sit with you and get all the pieces onto a single page⁵. We will help you "trace" the funds, keeping a clear paper trail (the will, the deposit statements) to prove this account is separate.

Step 3: Find Your 'One' Person

You don't need to be an expert in the Family Law Act. You just need one guide who is⁶. Your "quarterback" ⁷will coordinate with a lawyer ⁸and tax accountant (CRA, TFSA, RRSP implications) to build a simple, clear plan that honours your intentions and protects your legacy⁹.

"But We Want to Share It."

This is a common and noble sentiment. But "sharing" and "commingling" are not the same thing.

Commingling is an irreversible legal action, often done by mistake.

Sharing is a conscious, intentional decision you make from a position of control.

If your intention is to share the inheritance with your spouse, that is a beautiful goal. We can build a clear plan to do that safely. We can draft a spousal agreement that clearly outlines what is being shared and what remains separate.

This approach—based on clarity and intention—protects everyone.

Frequently Asked Questions

What if I already deposited the cheque into a joint account?

The situation is serious, but not always irreversible. We must act immediately to "trace" the funds. This involves proving exactly which portion of that account's funds originated from the inheritance. It's a complex process, which is why preventing it is so critical.

Does this apply to the growth on my inheritance, too?

This is a key distinction in BC law. While the original inheritance (the "principal") is excluded, the growth on that inheritance—such as interest or dividends earned during the relationship—is typically considered family property and is divisible. This is why active, strategic planning is essential.

How can I use my inheritance to benefit my family without commingling?

This is the core of true stewardship. From your separate, protected account, you can make intentional gifts, pay for specific expenses directly, or loan money to your spouse via a formal, documented loan agreement. These are acts of control, not accidental commingling.

The weight of an inheritance is real. This new wealth ought to be a blessing, not a curse that creates chaos.

You don't have to carry this alone.

Your role is not to be an expert in the Family Law Act. Your role is to be a faithful steward. My role as your guide is to provide the clear, protective plan that allows you to fulfill that purpose with confidence.

The first step is simple. You don't need to make a big decision; you just need to get clear.

I wrote this guide to help you do just that.

Download the 'Sudden Wealth, Clear Plan' Guide

By Rolf Issler, BMgt, CLU

Personal CFO for Founders &Families in Kelowna

ProsperWise Advisors