The birth of a child means big changes for a parent’s life, and it also means big changes for their will.
I always say that landmark life moments are a great time to update your estate plan, and there are few more significant than the arrival of new offspring, so here are a few of the things you’ll want to consider:
Appointing a guardian
In those few cases where it is needed, the appointment of a guardian is probably the most important decision a parent can make for their child.
Depending on the health, age, ability and willingness of candidates, parents may prefer a family member or close friend to take on the role. A potential guardian’s location may also factor in the decision, depending on the age of the child and their attachment to their home community.
The testator’s choice is not final, since a judge will decide whether to make the appointment permanent within 90 days of the parent’s death, but courts usually need a good reason not to respect the wishes of the deceased.
It is also possible to split the roles of custodial guardian and guardian for property – the person who handles financial decision-making on behalf of the child – but many parents are happy to grant responsibility for both to the same person.
Whoever you choose to appoint, you should revisit the decision periodically to ensure it still makes sense, as a person’s situation can change at any time.
Establishing a trust
If you plan to leave a significant financial bequest to a young child, you may wish to establish a trust for their benefit.
This way, you can set out instructions for when the money should be distributed to the child, or specific uses to which it can be put. The executor of your estate can perform the task or you can appoint a special trustee to oversee the trust’s administration.
Children with special needs
For parents of children with disabilities, there are a whole suite of additional options to consider. These include a Lifetime Benefit Trust, Qualified Benefit Trust or a Henson Trust – a special type of testamentary trust used to boost the income of a person receiving benefits under the Ontario Disability Support Program.
What works for one child may have unforeseen tax consequences for another, cutting the amount of support available, depending on their circumstances. But with the assistance of a good lawyer and accountant, parents can put together an estate plan perfectly tailored to their individual family situation.Disclaimer: The content on this web site is provided for general information purposes only and does not constitute legal or other professional advice or an opinion of any kind. Users of this website are advised to seek specific legal advice by contacting members of Laredo Law (or their own legal counsel) regarding any specific legal issues.