You’ve Just Had a Child. You Need That Will You’ve Been Putting Off.

For many young people, wills aren’t a priority. Whether they’ve just graduated from college or university with debt or have recently entered the job market, I regularly hear that they don't think they have enough assets to make the trouble of making a will worthwhile. That view sometimes changes when they purchase property or pay off debt and start to accumulate some savings. However, in my experience, the biggest motivator for a young person or couple to finally make an appointment to discuss making wills is the arrival of their first child. 

While young parents are concerned about ensuring their minor child is provided for financially in the event of their deaths, their biggest concern often is who will have custody of that child if they both die. 

Many estate lawyers are quick to assure those parents that they can include a clause in their will stating who will have “guardianship and custody” of their minor child (or children) if both parents die. The problem is that many parents do not fully understand the difference between guardianship and custody, and some estates lawyers are not equipped to explain how these types of clauses actually play out.

What Do Custody and Guardianship Actually Mean?

At the core of this confusion is the fact that guardianship and custody clauses for minor children bridge the intersection between estates law and family law. In this context, “guardianship” refers to a process by which someone can be appointed by the court to manage the property of a minor. In Ontario, anyone under the age of majority is presumed to be incapable of managing his or her property. For this reason, a minor might need a guardian of property if they are to inherit a large sum of money which needs to be managed and spent for the benefit of the minor. ¹

Traditionally, “custody” referred to the person or people who would step into the shoes of the deceased parent with the authority to make decisions on behalf of the minor. The term “custody” has now been replaced in the legislation by the term “decision-making responsibility”. A person with decision-making responsibility is able to make decisions about a child’s well-being, including with respect to health, language, education, religion and extra-curricular activities.  All minors will need someone with decision-making responsibility for them, regardless of whether or not they need a guardian of property.

Three Things You Need To Know

As a result, there are several important things that parents need to understand when they include these guardianship and custody clauses in their wills.

The first key point is that the naming of a guardian and/or person with decision-making authority for your minor child in your will is only an expression of your wishes as to who you would like to take on these roles. It is not a permanent and binding appointment. The appointment of a person with decision-making responsibility or guardianship of property expires ninety days after the parents’ or surviving parent’s death. Within that ninety-day period, the person named in the will needs to apply to the court to be formally appointed as the person with decision-making authority and/or the guardian of property for the minor child.  If the person wants to have decision-making authority for the minor child, they will likely need a family lawyer to assist with that process. 

The second important consideration is a practical one. Oftentimes, the person or people who the parents want to have decision-making authority and/or guardianship of property are grandparents or other family members who don’t live in the same city, province and sometimes even the same country as the child. While it may be in the best interests of the child to ultimately relocate to where the proposed guardian or person with decision-making authority lives, it is also important to remind parents that they need to have a plan in place for someone to care for the child immediately in the event of their deaths. 

A final point, which applies to all families but can be particularly challenging for parents who are divorced, separated or co-parenting, is that the person or people named as the proposed guardian or person with decision-making authority for the minor child should be consistent in both parents’ wills. In the event one parent dies, the surviving parent will retain decision-making authority for the minor child and would have preferential entitlement to be appointed as the child’s guardian of property. However, in the event both parents die and their wills express different wishes about who should be granted decision-making authority or guardianship of the minor child’s property, those wishes will be less persuasive and useful, as the Court will ultimately be left to determine what is in the child’s best interest taking into consideration the competing wishes of the deceased parents.

Takeaway

There are many considerations at play when developing an estate plan that provides for both the financial and physical well-being of a minor. It is important to seek legal advice from a lawyer with expertise in this area to develop a plan that meets the unique needs of each family.

¹ There are several different situations in which a minor might inherit property but may not require a guardian of property to manage the funds on their behalf during their minority. These situations include where the deceased person has provided for a testamentary trust for the minor; where the funds can be paid into court for the minor; and where the amount inherited is below the threshold established at law that a parent or custodian is permitted to manage on that minor’s behalf. A detailed analysis of these situations is beyond the scope of this blog.