Blended families add complexity to estate planning

Relationship dynamics in even the most conventional of nuclear families can make estate planning tricky, but blended families take the complexity to another level.

More and more Canadians are finding marriage success at the second or third attempt, forming new family units that include children from previous relationships.

Provincial laws have evolved to catch up with these new family arrangements, but it also means testators have more to account for when it comes to estate planning.

That’s why it’s important to get help from an experienced professional who can ask the right questions about your situation – making sure there are no nasty surprises for beneficiaries, and minimizing the chance of an expensive legal challenge to the will.

The danger arises because Ontario’s Succession Law Reform Act allows dependants of the deceased to make a claim against the estate if they are left unaccounted or inadequately provided for in the will.

Separation agreements or domestic contracts signed by the testator will often offer clarity about who they have a duty to account for in their will, but not all relationships are clear-cut, especially if they ended bitterly.

Depending on the circumstances, a testator’s dependants may or may not include their first or second spouse, children from different relationships, or even their new partner’s children from a previous relationship.

For me, a red flag is raised when an individual intends to leave everything to a new spouse, omitting all others.

Much of Ontario’s estates litigation starts with this kind of scenario, and if there is anything or anyone the testator should have taken into consideration but didn’t, there’s a good chance of overturning the will, thwarting whatever intentions they had for their assets.

Courts have broad discretion, and have forced the redistribution of life insurance proceeds from their original beneficiary designations and undone property conveyances to satisfy claims for dependant’s relief.

To add to the complexity, second marriages can also increase the risk of intestacy, since Ontario remains one of the few jurisdictions in which the previous wills of both parties to the union are automatically revoked.

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