Estate Planning for Parents of Minor Children: What You Need to Consider When Writing a Will
Disclaimer: This article on writing a will is intended for the purpose of providing information only. It is to be used only for the purposes of guidance. This article is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive.
When most of us think of estate planning, we imagine an older adult making plans. However, we have seen time and time again how important it is to have estate planning documents in place much sooner, regardless of your family status, age, etc.
Are you a new parent and are more compelled to think about what happens after you’re gone? Or did you have a will in place, but it was prepared before you became a parent? Has your family situation changed, and you’re now a blended family? If so, we recommend contacting us to create your wills and powers of attorney.
When writing a will for parents of minor children, there are more factors to consider, which we will outline in this article. For example:
- What happens if I pass away but they have a surviving parent?
- What happens if we both die?
- Are my guardianship choices going to be upheld?
- What if my child has received an inheritance from someone else?
- Should I let my child receive an inheritance at age 18?
- What if I’m part of a blended family?
What happens to minor children if one parent dies?
As far as custody is concerned, the surviving parent will typically retain their inherent rights to custody. This means they will be fully responsible for your children’s upbringing and well-being.
That inherent right is for custody, not guardianship over their property. We will discuss below in more detail whether or not the surviving parent would be the guardian of your children’s property.
Writing a will and choosing a guardian for minor children
What if both you and your spouse pass away? Your will should outline your wishes for who should care for your children if both of their parents pass away. There are a few considerations to consider, in line with section 61 of the Children’s Law Reform Act:
The Children’s Law Reform Act Requirements for Appointing a Guardian
If you are the only person with decision-making authority for your child, then you can make that appointment in your will.
However, if you share decision-making authority (for example, if you and your current or ex-spouse share custody of your children), you must agree on any appointments for custody or guardianship of property. For example, if you appoint your parents and your ex-spouse specifies their parents, neither selection is valid.
You also must appoint someone who consents to the appointment. Have that conversation and make sure the person you select is prepared to take on this responsibility.
Temporary guardianship
When you make an appointment for someone to be your children’s guardian, that appointment is only valid for 90 days. The guardians must then apply to the courts to confirm their permanent position. The courts will place a heavy weight on your recommendations, and anyone contesting would have to provide serious evidence that it is not in the best interests of your children.
When designating someone as the guardian for your children, you must understand that this appointment is initially valid for 90 days. The appointed guardians must then apply to the courts to permanently confirm their role.
Your recommendations hold significant weight in the court’s decision-making process, making it crucial to consider your choice carefully. However, if someone contests the appointment, that person would need to present compelling evidence showing that it is in the best interests of your children that the court consider an alternative arrangement.
Rest assured that the legal system prioritizes the well-being and welfare of your children, ensuring that their best interests remain at the forefront during this critical decision-making process.
What happens if my minor child receives an inheritance from someone else?
There are two types of guardianship: custody (or decision-making) and guardianship for property. Let’s consider the second one.
As a parent, you do not have an inherent right to handle your children’s property. For example, imagine a grandparent bequeaths funds to your child. You want to open a bank account and access it on your child’s behalf. The bank may first request a court order appointing you as guardian of your child’s property.
The courts will generally appoint you as the guardian of your child’s property unless there are compelling reasons not to do so. While that may seem overly restrictive, it can be a protection. Unfortunately, there have been instances where parents have mismanaged or squandered their children’s property.
If you pass away, you can appoint someone as guardian of your children’s property. For example, your ex-spouse may retain custody of your children, but someone else would have guardianship over their property under your estate. That person must update the Court and the Children’s lawyer regularly.
Timing your child’s inheritance
Any inheritance you leave to your child will become theirs to spend at 18 unless you specify otherwise. For many parents, that can be a concern. After all, many 18-year-olds are not emotionally and financially responsible enough to make good decisions at that age.
That is where you can create a graduated trust.
What is a graduated trust?
A graduated trust is a powerful tool that allows you to control how your child receives their inheritance. Instead of giving them the entire sum at age 18, you can stagger the distributions to ensure they are more financially responsible and mature. For instance, you may distribute a portion of the funds at age 20, another at age 25, and the final amount at age 30.
You can also advise where the trustee can provide funds earlier, for example, to pay for post-secondary education.
Estate planning and stepchildren
As noted, the traditional two-parent nuclear family is no longer the norm. What if you have stepchildren that you want to include in your estate planning? How can you ensure that your children are provided for?
For parents with children from previous relationships, estate planning requires thoughtful discussions and strategic planning. Designating guardians and managing inheritances must be approached sensitively to guarantee that all children are provided for and minimize potential conflicts. It’s a delicate balance of safeguarding the financial future of your loved ones while maintaining harmony among all parties concerned.
Beeksma Law: Your Partners in Estate Planning
At Beeksma Law, we understand the significance of comprehensive estate planning for parents of minor children. Our team is here to guide and support you through this critical process, ensuring your children’s best interests remain at the forefront. Let us be your trusted partners in crafting a secure and harmonious future for your loved ones. Together, we can navigate the complexities of estate law and leave a lasting legacy for generations.
Estate Litigation: When Should You Consider Mediation?
Disclaimer: This article on estate mediation is intended for the purpose of providing information only. It is to be used only for the purposes of guidance. This article is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive.
Estate litigation is a complex and emotionally charged area of law, especially because it often involves disputes among family members. When conflicts arise over inheritance, wills, trusts, or other estate matters, you might initially be adamant about pursuing your claims in court.
However, litigation takes a long time. The emotional and financial cost of this process can take its toll. What if there was another way to resolve this conflict? This article explores the role of mediation in estate litigation and how it can help parties find common ground, reduce costs, and ultimately lead to fair resolutions.
The realities of estate litigation
Like other civil litigation cases, the majority of estate disputes are resolved through settlements rather than going to trial. Settlements offer several benefits, including avoiding the unpredictability of court outcomes, reducing legal expenses, and providing closure to the parties involved.
Reaching a settlement can be difficult. After all, you pursued litigation in the first place because you felt strongly about the issues at hand. However, it is possible to come to an agreement. This is where mediation comes in. Mediation plays a pivotal role in facilitating settlements in many estate cases.
What is mediation?
Mediation is an alternative dispute resolution (ADR) process in which a neutral third party, the mediator, assists the conflicting parties in reaching a mutually acceptable agreement. It is a flexible and non-adversarial approach that allows parties to communicate openly, identify their interests, and work towards finding common ground.
What are the advantages of mediation in estate litigation?
There are many benefits to participating in mediation, including:
Emotional Considerations: In estate litigation, emotions often run high due to the familial nature of the disputes. Mediation provides a safe and private environment where parties can express their feelings, facilitating a more empathetic understanding between them.
Cost-Effectiveness: Mediation is generally less expensive than protracted litigation, helping parties save on legal fees and court costs.
Time-Efficiency: Estate litigation can stretch on for years. Mediation is much faster, especially when parties are willing to engage in open dialogue and negotiation.
Customized Solutions: Mediation allows parties to create tailored solutions that address their unique needs and interests, as opposed to rigid court judgments.
Preserving Relationships: Unlike court battles that can further strain familial ties, mediation promotes collaboration and can help mend relationships between disputing family members.
How does mediation work in estate litigation?
Mediation typically occurs after the initial stages of litigation, where parties have undergone pleadings, motions, and examinations. Mediation sessions may be held multiple times, depending on the case’s complexity and the parties’ willingness to cooperate. Even if mediation does not resolve all of the issues, it does help narrow the disputes that must be resolved at trial.
Lawyers play a crucial role in guiding their clients through the mediation process. They help their client assess the strengths and weaknesses of their case, set realistic expectations, and provide legal advice throughout the negotiations.
Avoiding the uncertainty of trial
Even in cases where one side believes they have a strong case, trials always carry an element of uncertainty. A judge’s decision may not be what you expect, which can bring further frustration and potentially escalate the conflict.
With mediation, the parties are in the driver’s seat (so to speak). You can create an outcome you can live with and avoid the unpredictability of a trial.
Is mediation mandatory in Ontario?
While mediation is voluntary in most jurisdictions, some areas may have mandatory mediation requirements. In Ontario, mediation is mandatory for most civil litigation cases that are filed in Toronto. In other jurisdictions, it is voluntary, although a judge may order that the parties participate in mediation.
Beeksma Law and Your Estate Litigation
If you find yourself embroiled in an estate dispute and seeking a compassionate and skilled legal team to guide you, look no further than Beeksma Law. Our experienced lawyers understand the complexities of family disputes. We can help you find amicable resolutions while safeguarding your best interests.
Contact Beeksma Law today and discover why we are renowned for providing exceptional legal services in estate litigation. Let us be your partner in navigating this challenging process and finding the best solutions for you and your loved ones.
Help! I don’t want to be a power of attorney!
Disclaimer: This article on your rights as a power of attorney in Ontario is intended for the purpose of providing information only. It is to be used only for the purposes of guidance. This article is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive.
We have talked about the importance of selecting the right people – people you trust – to make decisions for you if you cannot make them for yourself. We discussed the importance of selecting the right executor to handle your final affairs according to your wishes.
In theory, it should all be straightforward. Prepare well-thought-out estate planning documents. However, in practice, things sometimes go differently than planned.
Can I resign as power of attorney?
However, what if your relative appoints you under a power of attorney and you do not want that role? You may no longer feel capable of handling such a weighty responsibility. Family dynamics or other challenging situations make it so that continuing in this role exposes you to legal risks.
Can you simply walk away? In this article, we will discuss your options in this kind of challenging situation.
Have you used the power of attorney?
The first question you’re going to ask is: “Have I used this power of attorney at any point?”. Or has your relative been capable enough to make decisions at this point?
If you have not used the power of attorney
If the power of attorney has not been used at all, renunciation may be an easy way to step down. That means you formally resign in writing and notify the grantor, any other power of attorney and any named substitutes.
The important thing is that you cannot have used the power of attorney to make decisions for the grantor at any point.
If the power of attorney has been used
If you have used the power of attorney, things can become a little more complicated.
The quickest and easiest solution is to have the grantor prepare a new power of attorney, if they are capable of doing so. However, if there are complex family issues, you may not be able to compel the grantor to prepare a new power of attorney.
In that instance, you would need to seek an order asking the court to remove you as a power of attorney. While the court may agree that it is worthwhile to remove you, they may be concerned that there is no longer anyone to act in the grantor’s best interests.
One possible solution may involve appointing a neutral trustee to manage the grantor’s affairs. This would provide a buffer between you and the grantor. A professional trustee can act in the best interest of the grantor without having any emotional entanglements.
Estate Planning Lessons
It’s crucial to learn from real-life scenarios where even well-prepared estate documentation may not align with the complexities of relationships and other factors. We recently spoke to someone who faced such a situation, realizing that continuing as the power of attorney was not in her best interests and exposed her to risk.
This serves as a stark reminder that the best-laid plans can often go awry. Therefore, seeking advice from an experienced estate lawyer when facing challenging situations is invaluable. They can help navigate legal complexities, explore viable options, and ensure the best possible outcomes for all involved parties.
Knowing how to respond and protect ourselves and our loved ones is essential. By consulting with our team of experienced estate lawyers, you can gain valuable guidance to make well-informed decisions. You are then able to secure a more stable and secure future for everyone involved. Remember, in complex situations, legal advice can be the guiding light to find the best path forward. Reach out to our team today to get answers to your estate law questions.
The Importance of Estate Planning in Separation & Divorce
Disclaimer: This article on estate planning after divorce is intended for the purpose of providing information only. It is to be used only for the purposes of guidance. This article is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive.
We have talked before about how you want to regularly consider updating your will, especially after a major life event. One that we want to dive into in more detail is during a separation and divorce.
People are usually mired in other legal matters relating to their divorce and estate planning becomes an after-thought, something to handle after the dust settles. In this article, we will talk about why you should look at your estate planning sooner rather than later and what you should consider.
If you are currently separated or divorcing your spouse, we encourage you to book a complimentary consultation with our team to discuss your estate planning needs.
Changes to the Succession Law Reform Act
As of January 1, 2022, the law surrounding divorced and separated spouses was changed. A “separated spouse” means you have been separated for over three months.
For example, suppose you pass away and haven’t updated your will. Your ex is still listed as an estate trustee or beneficiary. Now, they are treated as if they had died before you and those particular sections of the will are revoked.
If you do not have a will (or die intestate), the Act now provides that a separated spouse will not benefit from the estate. Prior to this change, any legally married spouse, whether separated or non-separated, would benefit from the preferential share (the first $350,000) plus either the balance of the estate or an equal share if there are children. The Act no longer extends this entitlement to separated spouses, and they will not be entitled to this preferential share or any other portion of the estate.
When to see an estate lawyer
The law now provides protection for your estate after you have been separated for three months. However, the reality is that something could happen within those first three months. We advise seeing an estate lawyer as soon as you know that reconciliation is no longer an option.
In some separation agreements, there may be provisions that limit your ability to do certain things. You may be limited in making changes to the title to properties you own or change your powers of attorney. Therefore, it would be wise to update or create your estate documents before attending mediation or finalizing a separation agreement.
Property owned with your spouse
There are two ways to own property with someone else: as joint tenants and as tenants in common. Most times, when spouses own property, they own it as joint tenants. If one joint tenant were to pass away, the surviving spouse would take complete ownership of the property.
You may not want to have that kind of ownership with your estranged spouse, so what are your options? The good news is that you can sever your joint tenancy unilaterally (meaning you do not need their permission). This will move the ownership to what we call tenants in common.
The difference is that if you were to pass away before your property is dissolved, your estranged spouse does not take sole ownership of the property. That property becomes part of your estate and will be bequeathed to your beneficiaries.
Working with other agreements
In family law, there are agreements that must be considered, such as separation agreements or domestic agreements. You must make sure that your will and powers of attorney do not contradict those other agreements. If they do not align, you are opening your estate up to litigation. The courts will have to decide which document takes precedence.
Remember, if you have to get the courts involved, your estate will be spending up to tens of thousands of dollars. However, this situation is easily avoided by having documents drafted by an experienced attorney.
Reviewing your existing estate planning documents
You may have a will and powers of attorney already but are unsure how they hold up now that your family’s circumstances have changed. If that is the case, it is worthwhile to have your documents reviewed by an experienced estate lawyer, like the team at Beeksma Law. We will be able to tell you if your current documents still stand or if it is time to have them updated.
Estate planning after a divorce
As your family continues to change, you will need to consider how this affects your estate planning. We discussed this earlier, but you will want to consider how to protect the interests of all family members.
For example, say you remarry or enter into a common law relationship with a new partner. You will want to consider your children from your previous relationships and make specific arrangements in your will to ensure their financial security. On the other hand, you’ll want to provide for your spouse using vehicles like RRSPs and life insurance.
Expert guidance from the estate law experts at Beeksma Law
Our team of estate law experts at Beeksma Law recognizes that wills and powers of attorney are not static documents. They must be adapted to reflect the evolving circumstances of your family. We understand the importance of staying informed about changes in your life that may impact your estate plan.
Whether you are entering a new marriage, forming a blended family, or experiencing other significant life changes, our experienced professionals can provide the guidance you need. We will work closely with you to understand your unique situation. Our team can help you create an estate plan that protects the interests of all family members.
Contact us today to discuss your estate planning needs. We are here to support you and ensure that your estate plan remains relevant and effective as your family evolves.
Your guide to estate administration bonds
Disclaimer: This article on estate administration bonds is intended for the purpose of providing information only. It is to be used only for the purposes of guidance. This article is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive.
We have noted in other articles an estate trustee’s responsibilities. In this article, we will talk about one requirement that you may face when you probate an estate in Ontario.
(If you are appointed as an estate trustee, you may be interested in this article about your responsibilities. If you are preparing your estate documentation, you may enjoy this article about how to select an estate trustee.)
What is an administration bond?
An administration bond is a type of surety bond required in Ontario when someone becomes an estate trustee for a deceased person’s estate. Its purpose is to protect the beneficiaries and ensure that the estate trustee fulfills their duties properly. Generally, the bond is at least double the value of the assets of the deceased.
When is an administration bond required?
Ordering an administration bond is at the discretion of the courts, but a judge will typically require an administration bond in these scenarios:
- There is no will;
- There is a will, but an estate trustee was not named and one needs to be appointed; or
- A foreign estate trustee is appointed.
When referring to a “foreign estate trustee”, the courts will not only apply that definition to someone who lives outside of Canada. It can also be applied to estate trustees that live outside of the province. (Read below for how this can affect your decisions when selecting an estate trustee.)
The Estates Act sets out some situations where an administration bond is not required, including:
- In cases where the Government of Ontario or any Ministry, Provincial Commission, or Board established under legislative Acts submits an application to act as an estate trustee;
- There is no will, but the surviving spouse is applying to be an estate trustee and the value of the estate is less than the preferential share and an affidavit sets out the estate’s debts; or
- It is a small estate (meaning a total value of less than $150,000) and none of the beneficiaries are minors or incapable (as defined by the Substitute Decisions Act, 1992).
Waiving the requirement for an administration bond
Most people do not have easy access to the amount required by an administration bond, so you will want to apply for an order waiving the requirement for an administration bond.
Previously, this was a simple matter that could be handled over the counter with the court registrar. However, as of July 2022, the procedure has changed. A full motion is now required, and it is more likely to require a hearing before a judge. This is a more involved (and more costly) procedure than before.
If you are looking for an order to dispense with the bond requirement, you must convince the court that the protection that a bond provides to any creditors and beneficiaries is not required.
Bond insurance
In some cases, an application to waive an administration bond is unsuccessful, meaning the court will still require it. What are your options in that case?
You can turn to insurance companies that offer bond insurance policies. From the court’s point of view, these insurance policies serve as the equivalent of a bond, eliminating the need to come up with the full cash amount.
It is typically a straightforward application that resembles a credit check, where the insurance company assesses the applicant’s financial standing. There is a one-time premium that you must pay. However, this is considered a proper estate expense. Therefore, the estate trustee can be reimbursed once they receive a certificate of appointment.
Choosing your executor
Knowing that an administrative bond is more likely when your estate trustee lives outside of Ontario can impact who you appoint. It may make sense to select someone who lives locally rather than someone who is geographically distant or transient. For example, this might include a young adult child with an inclination for a nomadic lifestyle.
Navigating estate law with Beeksma Law
At Beeksma Law, we know that estate law can be complex, especially when it comes to requirements like administration bonds. Our team of experienced estate lawyers is here to guide you through the probate process in Ontario with confidence and ease.
Whether you’re stepping into the role of an estate trustee or diligently preparing your estate documentation, we’ve got you covered. We offer comprehensive services tailored to your specific needs. This includes ensuring you understand the ins and outs of administration bonds and how they impact you and the beneficiaries. With our expertise, we’ll find the best solution to protect your interests and streamline the estate administration process.
Reach out to Beeksma Law today. Let us be your trusted partner in managing your estate matters – we’re ready to assist you every step of the way!