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Testators’ Family Maintenance Act; in BC it’s the Wills, Estates and Succession Act), your disinherited child has the right to make a claim against your estate. Some of the factors a judge would consider when deciding to make variations to your will include whether you had undue influence, you weren’t in your sound mind when your will was prepared or if the language used in your will is unclear. “You need a record of why you want to leave your child out so that when your child makes a claim, he or she will get a letter or an affidavit with the reasons why you made your decision,” says Lauren Randall, an associate law- yer who specializes in estate planning and administration in Dartmouth, NS. If the child contests the will, the court will have the final say. “A judge will look at the evidence — did [the child] have a relationship with the parent? Was the parent’s decision influenced by another child?” Unless the leſt-out child or chil- dren have a really compelling case, the odds of winning aren’t in their favour. Randall says getting good legal advice before you make your decision (whether you’re the parent or child) is key.


Question: My father died and left my stepmother his estate. Does she owe me — the daughter from his first marriage — anything?


Answer: It depends on the law in your province or territory and what the will states. “If the stepmother is leſt everything out- right and kids are leſt out, they have the right to make a claim to the estate within three months,” Randall says. The thing is, most couples own their assets jointly (bank accounts, property, cars, etc.) and if the beneficiary is the spouse, there’s not much for the children to claim against. There’s an issue that can occur in blended families that chil-


dren and parents should be aware of. Using the example above, aſter the stepmother collects her late husband’s estate, there’s nothing stopping her from getting remarried and leaving the deceased’s money to her new partner, or writing her will to leave everything to her biological children, leaving Dad’s kids high and dry. There’s one way for a parent’s biological children not to wind


up with the short end of the stick — the spousal trust. In our example, let’s say Dad wants to provide for the stepmother while she is alive. With the spousal trust, when she dies, Dad’s assets will go to his children from his first marriage. While Randall says it can be an awkward conversation to have with a spouse, it’s something that should be considered, especially if Dad (in this case) has more wealth than Stepmom.


Question: My son opted out of post-secondary school. What will happen to the registered education savings plan (RESP) I’ve been paying into?


Answer: The apple of your eye finishes high school and, to your surprise, announces post-secondary school just isn’t in the cards. It’s clearly not the future you had in mind for your


40 | CPA MAGAZINE | JANUARY 2018


son or daughter, considering you’ve put money into his or her RESP since birth. You’ve even put in at least $2,500 annually to take advantage of the government’s 20% matching program, the Canada Education Savings Grant (CESG), which can add a maximum of $7,200 per child to the kitty. What will happen to all those years’ worth of savings? Anne Perrault, an accountant and money coach in Ottawa


who specializes in financial education, says RESPs contain three distinct parts — the contributions, the CESG and the earnings on the first two parts. “Because your contributions are made with aſter-tax dollars, you can withdraw that portion with no penalty or fee at the current value,” she says. The CESG has to be returned to the government and the earnings portion is paid back to you, less a 20% penalty. “The largest portion of any RESP is the contribution amount. Because it’s tax-free, you can invest it however you like. You might consider opening a tax- free savings account (TFSA) for your young adult, if you think he or she is financially responsible to manage the money,” Per- rault says. You can circumvent this problem of figuring out what to do


with the funds by opening a family plan from the get-go, so that any siblings will automatically get to use what’s in the RESP. Your financial adviser can provide details about how this works. Another smart option is to transfer the money into a regis-


tered retirement savings plan (RRSP) for you or your spouse, which will continue to grow on a tax-deferred basis until retire- ment. Your plan administrator should discuss your options with you. Finally, since RESPs can remain open for more than 35 years, some experts suggest waiting for several years before moving the money to see if your child changes his or her mind about going aſter that degree.


Question: Do I have to be fair and split my estate equally among my kids?


Answer: Sarah is 64 and has three adult children, ages 40, 42 and 44. When she first thought about her will she decided a three-way split was the way to go. Eventually that changed. “My middle child and his partner at the time, who is also the mother of his daughter, were doing drugs and there was no way I was leaving any of my or my father’s (the kids’ grandfather’s) hard-earned money to people who would squander it,” says Sarah. “I made a provision in my will for my granddaughter so her education would be covered.” Sarah decided to appoint her oldest and youngest as the executors, and never told her middle son her plans. In the years since, he has cleaned up his act and started working in the family business, so Sarah put him back in the will last year. While most experts, including Tim O’Toole, a registered


financial planner in Winnipeg, say the vast majority of parents split their estates evenly among their children, fair doesn’t al- ways mean equal. “The classic example out here are farm fami- lies. Mom and Dad have three kids — one stays and works on


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