Do You Have Kids? You need a Will!

I have a confession to make: I didn’t have a will until a few days before I started my maternity leave with my first child. As a wills and estates lawyer, I knew the importance of having a will – to name an estate trustee to wind up my estate, to set out how my assets should be distributed on my death, to shield my family from the plethora of issues associated with dying without a will (known as dying “intestate”). Yet I didn’t feel the overwhelming pressure to have a will until I had a child on the way.

Having a will is one of the most important things you can do to protect your children. Yet I speak to young parents every week who don’t have a will in place – my own friends included. I know its hard to think of death when you are in the prime of your life, but death doesn’t discriminate. Just as you buy life insurance to protect you family “just in case” so should you have a will.

If both parents die without a will in Ontario, the laws of intestacy provide that the parents’ assets will go to their children equally. However, children are considered persons under disability and as such, cannot receive more than $10,000 outright. Any amount above that threshold must be paid into court, to be managed by the government – for a fee - until the child reaches the age of majority, at which point they get EVERYTHING. If your child’s guardian needs money for your child’s education, healthcare, shelter or extracurricular activities, they will need to ask the court to release funds. Even if only one parent dies without a will, the surviving spouse inherits the first $200,000 of the deceased spouse’s assets (excluding assets which pass outside of the estate by virtue of joint ownership and beneficiary designations) and the remainder is divided between the surviving spouse and the children.

Most of us don’t want our money controlled by the government. Most of us don’t want our children to receive their inheritance when they reach the age of 18. A will allows a parent to control the age(s) at which a child inherits assets, who manages the assets while the funds are being held in trust for the child, whether distributions can be made from the child’s trust and for what purposes. For example, my will appoints a trustee to manage my assets until my child reaches the age of 25, at which point 50% of my estate is paid to him, with the remainder being paid to him when he reaches the age of 30. While funds are being held in trust, my trustee has the discretion to use the trust funds for my child’s healthcare, education, living expenses and general wellbeing.

A will is also the only document that allows you to appoint a guardian for minor children. A guardianship appointment in a will is only valid for 90 days after your death, during which time the guardian must apply to the court for a permanent guardianship order. The court will determine guardianship based on the best interest of your child. However, your expression of your wishes in your will is persuasive evidence for a court, especially if a custody dispute arises among your extended families.

A will also provides parents with the opportunity to plan for the needs of disabled children who may be receiving government assistance. Without proper planning, even a modest inheritance may disentitle your child to financial, drug and other related benefits.

So, my fellow parents, if you’re wondering if you need a will, the answer is a resounding YES! Be sure to check out my next blog post where I will discuss what happens generally when you die without a will.