Having a will is one of the most important things a person can do in order to prepare their estate in the event of their death. A valid will is the best way to ensure that your loved ones are taken care of, and that your estate is distributed with as little a likelihood of litigation as possible. A recent decision from the Ontario Superior Court of Justice highlights the importance of having a valid will after a father died intestate, or without a will, leaving questions about who would be responsible for funds to be paid to his child.
The deceased died intestate in July 2019, leaving behind a ten-year-old son and his wife. At the time of his death the family lived in Ontario. The wife and child are the only beneficiaries of the deceased’s estate.
Under Ontario’s Family Law Act, the wife was entitled to all of the deceased’s Ontario assets. However, he also owned a condo in Montreal. Upon its sale, the proceeds of the condo would be distributed to the wife and the child.
The Children’s Lawyer was appointed as a litigation guardian for the minor, which was required in order for the condo to be sold. The Children’s Lawyer argued that the wife should be appointed the guardian of property for the purpose of sale of the condo, but that the child’s portion of the sale proceeds be paid into the court. The wife wanted to manage the child’s property until he turned 18.
The wife provided the court with a plan about what she would do to manage the child’s inheritance, including placing it in GIC’s, and perhaps over time, in RESPs. She said she would be able to provide for the child without using his inheritance.
The Children’s Lawyer opposed the RESP idea because it could be seen as an asset of the wife’s in the event of family law of bankruptcy proceedings at a later date. It should be noted that the wife’s ability as a caregiver or a mother were not called into question.
The court reviewed case law and determined that there were inconsistencies in regards to how RESPs were treated in the event of bankruptcies. This left the court to determine that “for several reasons, there is a risk that a minor, upon reaching the age 18, will not receive monies invested in an RESP.”
As a result of this, the court determined that it would be in the child’s best interests that the Inheritance be paid into the courts until the child reached the age of 18.
Contact NULaw in Toronto to obtain effective legal guidance with all of your estate planning needs, including wills and powers of attorney. An experienced estate lawyer can help you achieve your long-term goals and objectives, and plan ahead to protect yourself and your loved ones. Contact us online or at 416-481-5604 to book a consultation today.