How Inheritance Income Can Affect Child Support Obligations

The question of whether an inheritance can influence child support obligations is an important consideration for many families. The short answer is yes. While inheritances themselves are typically not subject to division at the end of a marriage, the income generated from these inheritances can have a significant impact on child support calculations.

Inheritance and Income: What the Law Says

Under Ontario Family Law, inheritances are generally excluded from the property to be shared between spouses upon separation or divorce. However, any income derived from an inheritance—such as interest from an inherited bank account or rental income from an inherited property—can be included in the calculation of child support. The Child Support Guidelines, which dictate how income is calculated for support purposes, do not exempt income earned from inheritances. This income is treated like any other source of income when determining the appropriate level of child support.

Disclosure Obligations of the Support Payor

One of the challenges that can arise in these situations is ensuring that the support recipient has accurate and complete information regarding the support payor’s financial situation, including any inheritance. Often, a support payor may prefer to keep details of an inheritance private. However, Ontario Family Law mandates that support payors disclose such information.

When a support order needs to be adjusted and there is no mutual agreement between the parents, Rule 13(4.2) of the Family Law Rules comes into play. This rule requires the support payor to serve and file a financial statement, which must include tax Notices of Assessment for the past three years. Importantly, this financial statement must list all assets, including those acquired through inheritance.

Ensuring Full Financial Disclosure

If the initial disclosure provided by the support payor does not give the support recipient a comprehensive understanding of the other party’s financial situation, further action can be taken. Rule 13(11) allows the support recipient to request any additional information necessary to gain a full understanding of the support payor’s financial circumstances. If this information is not provided within seven days, the Family Court can issue an order compelling disclosure.

Conclusion

Inheritances can indeed impact child support obligations, particularly when income is generated from the inherited assets. The law requires full disclosure of such income to ensure that child support calculations are fair and accurate. Both parties should be aware of their rights and obligations when it comes to inheritance and child support, as transparency is crucial to achieving a just outcome.

Learn more about how we can assist you in child support matters or contact us to schedule a consultation and discuss your specific situation in detail.