Earlier this week, our group gathered to celebrate our colleague’s impending arrival of a new baby. It was a delightful occasion, with cake, presents, and well-wishes. Of course, conversation naturally turned to the preparations that our team member has made for her new addition.

Parents-to-be typically spend a lot of time (and money) preparing for the arrival of a child.  They furnish a nursery, fill the freezer with casseroles, test-drive strollers, and get themselves on daycare waiting lists. But there is another important task that should be on the to-do list of new parents: creating a Will (or revisiting an existing one).

There are a number of reasons why having a child is a good reason to consider estate planning:

• In Ontario, in the absence of a Will, children share in an intestacy. If the deceased was legally married, the spouse will receive the “preferential share” of the deceased’s estate (currently the first $350,000.00 of assets), and then the remainder will be split between the spouse and children. The proportion of the split will depend on how many children there are: if there is one child, the spouse and child will each receive one-half of the remainder of the estate; if there are two or more children, the spouse will receive one-third of the remainder of the estate, and the children will share equally in the other two-thirds of the remainder of the estate. If there is no spouse, the children will receive the entirety of the estate. Notably, the children will become entitled to the entirety of their inheritance upon attaining the age of 18.

The intestacy rules typically do not reflect how most people would choose to distribute their estate. Where people have a spouse, they typically wish for their spouse to benefit from the entirety of their estate, either outright or in a spousal trust, before their children. Additionally, whether or not they have a spouse, most people do not wish for their children to become entitled to their inheritance upon turning 18. Instead, they prefer for their children to have a bit more time to mature before receiving a significant sum of money. This leads to my next point.

• A Will allows for a testator to carefully plan for their children’s inheritance. As noted, most people do not wish for their children to receive their inheritance at the age of 18. A Will can include trusts that allow for a) the appointment of a trusted person or persons to act as the trustee of the trust; b) terms that allow for distributions to or for the benefit of the child for important purposes while the trust is held (for example, for university tuition or extraordinary medical expenses); and c) a distribution (or staggered distributions) at an age that is appropriate for the child to receive their inheritance (often mid-20s or higher).

A Will, therefore, is an important tool to plan for the financial future of your children. It is also important, however, to plan for their care, which is the final point of consideration for today’s blog.

• A Will allows for the appointment of a guardian. Parents will typically include a guardianship clause in their Will in case they and any other custodial parent(s) pass away before their children attain the age of majority. A guardianship appointment in a Will is temporary, lasting only 90 days, following which someone will need to apply to the Superior Court to be appointed as a permanent guardian. However, having the appointment in the Will serves two important purposes: first, it ensures that there is someone in place to care for and support the minor children immediately in a difficult time, and second, it provides evidence of who the deceased thought was best suited to care for their children on an on-going basis after their passing.

It can be hard in the time leading up to a new addition’s arrival to make time to have a Will prepared, but it is worth the effort. Notably, a Will can make reference to “my children”, rather than naming specific individuals, allowing for a bit of breathing room before it needs to be updated, if additional children join the family at a later date. And if you can’t make it until after the baby is born…well, I always like having an extra little visitor in the room when we sign things up!