Who should I appoint as legal guardian for my children?

Posted on By admin
family

A parent may appoint a guardian and custodian of their child in their Will, subject to Court approval for the remaining time where the child is a minor. The term ‘minor’ refers to a child who is under the age of majority, which is 18 or 19 depending on the jurisdiction in Canada1. When considering who to appoint as a legal guardian, it is important to understand the distinction between appointing someone to care for the child and appointing someone to deal with their property.

Caring for minor children

An individual who is appointed to care for a minor child has custody of a child and is tasked with the rights and responsibilities of a parent in respect of that child. The person with custody will generally make decisions regarding the child’s living arrangements, schooling, and if necessary, medical treatments.

The ability to appoint someone to take custody of children is subject to certain restrictions, which can include that:

  1. The person naming a custodian must be the only person who is entitled to custody of that child. If someone else with legal custody of the child survives the first parent’s death (such as the child’s other parent) then the appointee will not acquire custody.
  2. The appointee must consent to act as the child’s custodian.
  3. In some jurisdictions, the appointment of a custodian is subject to approval by the Court.

When considering whether to grant an order for custody, the Court will consider the best interests of the child, including the child’s needs and circumstances and whether the person applying has any history of violence or abuse. The Court will also consider the views of the deceased custodian of the child as provided by their Will, but the Court has complete discretion to make the appropriate order and is not bound by the designation in the Will.

Dealing with your minor children’s property

The person appointed to care for your child generally has the right to deal with limited assets (in most cases up to $10,000.00, which, it should be noted is generally the maximum a parent may deal with absent a Court Order). In order to obtain the right to deal with additional assets, a Court Order giving the person the authority to manage the property must be obtained in most jurisdictions. This can be referred to as a guardianship of property or a trusteeship, depending on the jurisdiction.

Who should I appoint?

An individual has complete discretion over appointing a guardian. In most cases, the person caring for the child is either a close friend or family member. The following is a list of factors to consider:

  • Pre-existing relationship with the child
  • Location
  • Age
  • Health
  • Suitability

Ultimately, the individual appointed should be someone trusted with that child’s welfare.

For further information regarding guardianship for minor children, please consult a TEP.

1. The age of majority is 18 in six provinces: Alberta, Manitoba, Ontario, Prince Edward Island, Quebec, and Saskatchewan. The age of majority is 19 in four provinces and the three territories: British Columbia, New Brunswick, Newfoundland and Labrador, Northwest Territories, Nova Scotia, Nunavut, and Yukon.

How do I value my estate?

Posted on By admin
family in snow

Calculating the value of an estate can be useful for many reasons. In some instances, a personal representative may need to calculate the value of a deceased’s estate for tax and distribution purposes. In other instances, a testator may wish to calculate the value of his or her estate to help make informed decisions about their Will and provide a helpful starting point for their eventual personal representative to fully account for all the assets and liabilities of their estate. When calculating the value of an estate, it is essential to understand what the “estate” truly consists of and the ways in which a value can be assigned.

The principle is simple (even if the calculations are not); the value of an estate is the assets of the estate minus any and all debts or liabilities. The following steps form a quick guide to calculating the value of an estate.

Step 1: Select the Date of Calculation

Living Person’s Estate

Since the value of assets fluctuates over time, it is important to choose a specific date as of which the assets are valued. Items are typically valued with reference to their ‘fair market value’, which means that the valuation may be higher or lower than the original purchase price. When calculating the value of a living person’s estate, any valuation date may be chosen which is appropriate for the purposes of the valuation.

Deceased’s Estate

In choosing the calculation date for a decedent’s estate, the valuation date will generally be the date of death.

Step 2: Determine the Assets that Contribute to Your Estate and Calculate the Value

In order to calculate the value of an estate, the assets must be totalled. Real property, such as a personal residence, is typically the most valuable asset. Other assets include money held in bank accounts, and personal possessions such as motor vehicles, jewelry, household contents, etc.

Assets may also include:

  • Pensions
  • Savings
  • Life Insurance Policies
  • Stocks
  • Bonds
  • Mutual Funds

While they will not necessarily be relevant for valuation purposes, it is also useful to inventory assets without significant monetary value that are relevant to the administration and distribution of the Estate (for example, photo collections and digital assets such as social media accounts).

Step 3: Calculate Deductions

Deductions include debts owed by reason of the decedent’s death (such as any outstanding tax liabilities), as well any other debts owed at the time of death (or as of the valuation date). While this list not exhaustive, debts and/or liabilities may include:

  • Credit Cards
  • Loans
  • Mortgages

Note that most deductions (other than mortgages) will not be applicable for the purpose of valuing an estate for probate fees or estate administration tax (in jurisdictions where that applies).

For further information or assistance with with an estate valuation, please consult a TEP.

The risks of not making a will

Posted on By admin
worried woman

Making a will can seem like an unpleasant or dreary task to be put off indefinitely. However, there are serious implications for the loved ones of someone who dies intestate (without a will). This article highlights some of the consequences associated with not preparing a will.

1. Your estate will be distributed under the rules of intestacy

A person who dies without a will is considered to have died “intestate”. Legally speaking, an intestate person has left no instructions as to how they wish for their assets to be divided and distributed on their death. In such circumstances, provincial legislation governs how property will be distributed amongst surviving relatives. Typically, these rules indicate that if a married person dies, an initial lump sum amount will be left to their spouse, plus a portion of the residue of the estate (the amount depends on whether there are any children of the deceased). If there are children, the residue is divided proportionately between any children and the surviving spouse. Where there are no children or spouse, the estate generally goes to the next of kin.

2. There is no opportunity to appoint guardians for minor children

One of the most important aspects of a will is appointing a guardian to look after minor child in the event of an untimely death. In the event all of the legal guardians of a child pass away without leaving wills, a Court Order will be required to select a guardian for the child. In the absence of such an order, the applicable provincial government would become involved.

3. There is no named executor

An executor is typically named when a person prepares their will. An executor is someone who is trusted to administer the estate according to the deceased’s wishes. However, if there is no will, there is also no appointment of an executor. As such, someone must apply and be appointed to act as administrator of the estate, which may result in delay, expense and frustration for family, friends and loved ones.

Other potential implications of not creating a will include:

  • Stepchildren and, in some jurisdictions, unmarried partners will likely be discounted from the estate;
  • Families may face additional administrative burdens which add to suffering at an already difficult time;
  • Familial disputes may arise; and
  • Expensive legal action may be required to resolve complications.

There are many risks associated with not preparing a will. As such, it is crucial that everyone prepare a will, preferably with the assistance of an experienced professional who can ensure that it is done properly.

For further information or assistance with drafting a will, please consult a TEP.