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The scenario of having minor children and dying without a Will is perhaps one of the most heart pressing and important reasons to make a Will . The term "minor" here means anyone below the legal age of majority: being 18 or 19 years of age, depending on the province or territory you reside in.
To recap from previous blog posts, you can name a guardian or guardians for your minor children if you have a Will. And you do this in your Will. This means that in the event of your death, you have already chosen who would be taking care of your children, that person has been asked ahead of time by you and has agreed to act as your children's legal guardian should something happen to both you and your children's other parent. However, if you don't have a Will the story is very different.
Let's explore.
If you die intestate (meaning without a Will), have minor children and their other parent is surviving, then that parent will be the sole legal guardian for those children. If, however, something happens to you and the other parent (for instance, a mutual catastrophe) then relatives must voluntarily step up to the plate to become your children's legal guardian. It may be that several relatives agree but may not have the means to take all of your children at once (for instance, if you have three or more children). So your children may end up being split apart and sent to live with different relatives. If no family members volunteer, then the government (via the Public Guardian) steps up and will place your children in foster care, usually dividing children between various foster homes.
Since minor children technically cannot legally hold/own property in Canada, any funds to be divided amongst your children (as a result of your death) will be handled and managed by the government on their behalf. It is important to note that the government does not provide this service for free, instead the government takes a portion of the funds each year as a fee for managing the same. I have seen in my practice, the administrative and governmental fees amount to more money annually than any interest earned on those funds. Essentially, the government fees can easily eat up the funds held in trust before your child ever receives the money when they become an adult.
As you can see, if you have minor children, there are several reasons to ensure that you have a Will that not only names a guardian in the event of your death, but also names a person to hold your children's inheritance in trust for them. This person is typically your Executor named in your Will, but can also be someone entirely different. This chose is up to you, if you make a Will. If not, the choice is dictated by the law and that choice may not be one you are comfortable with.
Stay tuned for Part 3: what happens to (and who gets) your assets when you die without a Will.
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