Choosing a Guardian for your Children

For parents of minor children, arguably the most important clause in your will (and the most compelling reason for you to actually get a will) is naming a guardian for your minor children. In the absence of a will, the Public Guardian may choose to be involved in the selection process and their determination of who is best to care for your children may not be the same as yours.

Many people choose a family member, believing that person will raise their children in the manner closest to what they themselves would do. Close friends are also good options. It is always worth noting, however, that a person named as guardian can always turn down the honour so it is important to have that conversation with the named guardians and ensure they are onboard with the responsibility and with your preferences for how your children will be raised.

A majority of people choose their spouse and/or co-parent as the guardian of their children. This is generally what will happen by operation of law anyway, however if you have a blended family it is even more important to make your wishes known through your will. If all of your children have the same parents, you may choose to have that same person as both executor of your estate and guardian of your children.

Many people also choose to name the same person as guardian as they do for executor if their spouse or co-parent is not able to act. This is fine, particularly if this is the person you trust the most outside of your spouse, but do note that it is the executor who will be managing your assets for your children and therefore determining the payments that are appropriate to be made to the guardian. For this reason, many people may prefer to name two different people as executor and guardian.

Naming a guardian for your minor children is a huge decision and one that should not be taken lightly. It is a difficult conversation, but a necessary one and once it is made, and your will is signed and effective, you can rest easy knowing your well thought out wishes will be known and respected.

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Choosing a Guardian for your Children

Joint Tenants v. Tenants in Common

When people think about property they own with another person (or persons) there are two distinct ways that that piece of property can be owned. The first is as joint tenants, which means while they own the property equally, there is a right of survivorship attached so that on the death of one of the owners, the entire property automatically transfers to the other owner by operation of law. Ultimately, this means that property which you own as a joint tenant will not be covered by your will if there are other owners still alive. The property will automatically go to the other owner and may be covered by his or her will. Naturally, this may not be your desired result.

The second way to hold property is as tenants-in-common which means each owner has the right to a specific percentage of the property (most common is 50-50). When property is held this way, an owner can transfer his or her interest to his own heirs- it will not automatically go to the other owner.

Knowing the difference is key, as most institutions, such as land titles, will assume the property is held as joint tenants unless otherwise indicated. This is likely due to the fact that the vast majority of shared ownership property is between spouses who would prefer the survivorship aspect of joint tenancy to avoid potential taxes on disposition or probate fees in those provinces that charge probate fees based on a percentage of the estate (Note: Alberta does not do this). However, your estate and therefore your wishes can vastly change depending on the ownership type. Make sure you know how your assets are owned when you create your will!

Joint Tenants v. Tenants in Common

Duties of an Executor

So you have been named as an executor in someone else’s will. What now? The first thing to note is that you are not obligated to act. You can renounce the position, though you must do so in the appropriate fashion, which includes a specific court form. If you choose to act though, there are four core tasks you must perform, all with keeping the singular goal of acting in the best interests of the beneficiaries named in the will. These four core tasks are: identifying estate assets and liabilities, administering and managing the estate, satisfying the debts and obligations of the estate finally, distributing and accounting for the administration of the estate. If you do not perform these four core takes, you may be personally liable.

Identifying Estate Assets and Liabilities

This task means you must determine the full nature and value of all property and debts held by the deceased and includes applying for pensions, death benefits, life insurance, transferring bank accounts into the estate name and arranging for a list of the contents of a safety deposit box. It is important that you are thorough in this task as you must account to the beneficiaries in the fourth core task.

Administering and Managing the Estate

This task comprises all the activities you must do to keep the estate active and includes creating and maintaining records of the property and activities of the estate, communicating with beneficiaries on a regular basis, protecting estate property, applying for a grant of probate or bringing any questions before court, commencing or defending legal claims and preparing financial statements. The wills drafted at Alberta Wills Online afford an executor the opportunity to hire agents to complete any of these tasks. The most common agents hired in estates are accountants to prepare the financial records and file tax returns and lawyers to obtain the grant of probate. The fees for agents will come from the estate.

Satisfying Debts and Obligations

As executor, it is your responsibility to make sure all the creditors of an estate get paid, including Canada Revenue Agency. As such, this task includes determining the tax liability of the estate, paying existing and ongoing debts and liabilities and determining whether the estate should advertise for creditors. As an executor, you are entitled to be reimbursed for reasonable out of pocket expenses incurred (particularly as you wait for the grant of probate and may not have access to estate assets.

Distributing and Accounting

This tax requires you to identify each of the beneficiaries and notify them of their interests, administering any testamentary trusts, preparing a distribution schedule and actually transferring assets from the estate to each beneficiary. It is important to note that a distribution is a two-part process- all assets covered by a will must first be transferred to the estate, then to the individual beneficiaries.

Being an executor can be a lot of work and carries a high level of responsibility and duty to the beneficiaries. As such, it is imperative that you consider very carefully the people you name as executor and ensure you select people who are up to the task.

Duties of an Executor

Why Do I Need a Will?

There are 2 important reasons why a person should have a will though both, or neither, may apply to everyone. The first reason deals with your assets and how you would like those assets to be dealt with when you die. Without a will, your assets will be distributed according to the legislated intestacy rules which will likely not reflect your wishes. For example, if you pass away and are married with children, and all of the children are both your and your spouses, your spouse will receive all your assets. However, if you pass away and are married, but you have children who are not your spouses, your spouse will get a preferential share and the remainder will be divided among your spouse and children. If your estate is small, this may mean your spouse gets everything if the value of your estate is less than the preferential share. In addition, if you do not wish one of your children to inherit an equal share or if you wish your children to inherit at an age other than 18, this cannot be dictated without a will. A will allows you to state your wishes and maintain control over your assets. Even if the intestacy rules reflect what you would like to happen, everyone has a different idea on what is “fair” and what is “equal” so a will can provide guidance for your heirs in distributing your assets.

The second, and arguably more important reason, pertains to people with minor children. You will name a guardian for your minor children in your will. Without naming a guardian, your wishes may not be known and therefore not respected and this could cause great strife among your family members. In the worst case scenario, your children could end up in foster care if no one steps forward to care for them.

In any event, the only way to have your wishes be known and followed is to have a will.

Why Do I Need a Will?