In-laws in the estate plan!

Pitfalls to avoid when sons- and daughters-in-law are named in a Will

When your child marries, you hopefully are not losing your child, but instead gaining a new son or daughter. Does this mean your new son or daughter should be treated like your child when it comes to your estate plan?

Although there is no legal obligation to gift anything to your child’s spouse or include them in your estate plan, many people see their in-laws as an extension of their family and would like to include them. In doing so, there could be some unintended consequences in the event the relationship status changes.

Naming a child’s spouse as an executor and trustee

In some cases, a person may trust the judgment of their son-in-law or daughter-in-law more so than their own child, and want an in-law acting as an executor or trustee under their Will along with, or instead of, their child.

There is nothing preventing you from naming a child’s spouse as an executor or a trustee under your Will. However, you should consider that in the event they are separated or divorced from your child at the time of your death, they are still entitled to take on this role and are not obligated to step down.

To avoid any potential conflicts, a condition can be added that your child’s spouse is only to act as an executor and trustee in the event they are still married to your child at the time of your death or, in the event your child had predeceased you, that they were married to your child at the time of your child’s death.

However, it is important to remember that it can take several years to administer an estate, and even longer to administer trusts. If you name a child’s spouse as an executor or trustee, there could be a risk that they separate from your child during the administration of your estate or testamentary trust.

In this case, you may want to consider a further condition that the appointment of your child’s spouse terminates at any time they are not married to your child. From a trustee perspective, there isn’t too much of an issue with a trustee stepping down, provided there are named alternates or mechanisms to replace the retired trustee.

However, when it comes to the executor role, this can be more tricky. If the child’s spouse has already started acting as executor, they cannot easily step down. Once an executor has commenced acting, regardless of whether a probate grant has been applied for, Court approval will be needed before their role is terminated.

Gifts to your child’s spouse

Many people want to leave a gift to their child’s spouse as a token of their affection, or perhaps want to leave the spouse their child’s share in the event the child has predeceased them. But what happens if you name a son-in-law or daughter-in-law in your Will and they subsequently separate from your child and are not together with your child on your death?

In Ontario, any gift made to a testator’s spouse under a Will and any appointment of the spouse as an executor or trustee under a Will is revoked in the event that the testator is divorced or separated from their spouse at the date of the testator’s death. This only applies to the testator’s spouse. It does not extend to an ex-spouse of any other beneficiary.

If you name your daughter-in-law or your son-in-law as a beneficiary or a contingent beneficiary of your estate, they will still be a beneficiary of your estate even if they are no longer married to your child at the time of your death if you didn’t update your Will prior to your death.

Even if your in-law was not divorced from your child at their death, there is still concern that your wealth could pass outside your family completely if you name them as a beneficiary. If you leave your child’s inheritance to your child’s spouse in the event your child predeceases you, there is a potential that your grandchildren may be cut out. Your child’s spouse may remarry and decide to leave everything they received under your Will to a new spouse or to children of the new marriage, leaving your descendants with nothing.

Other ways to benefit your child’s spouse

There are other ways to show your affection for your child’s spouse without running into some of the issues described above.

For example, you can consider a small cash legacy to show your appreciation rather than naming them directly as a residue beneficiary of your estate, or gift them a sentimental item of yours. You can also consider preparing a letter of wishes to your children or discussing directly with your children your hope that some of their inheritance would be shared with their spouse.

In some cases, if a family trust is set up for your child under your Will, you can direct in the trust that the income can be paid to their spouse, while the capital is preserved for your child and grandchildren.

Ultimately, there is no right or wrong answer as to whether or not you should include your child’s spouse in your estate plan, and it will ultimately depend on your family dynamics. In making this decision. However, it is important to consider what could happen if you end up losing the new son or daughter you once gained, and should it happen, to update your Will on a timely basis.

Stephanie Battista is a partner at O’Sullivan Estate Lawyers. She practices exclusively in estate and trust law, focusing on all aspects of estate planning and estate administration in order to provide clients with sound and helpful legal advice. She advises clients on their succession plan including wills, trusts, powers of attorney and domestic contracts. She also advises executors, trustees, and attorneys on their duties and obligations, and provides guidance through the complexities of the estate administration process as well as estate and trust accounting. This article originally appeared in the O’Sullivan Estate Lawyers blog. Used with permission.

Notes and Disclaimer

This article is the opinion of the writer and is meant to be general in nature, limited to the law of Ontario, Canada. It is not intended to provide specific personalized advice on any individual situation, including, without limitation, investment, financial, legal, accounting or tax advice. Before taking any action involving your individual situation, you should seek legal advice to ensure it is appropriate to your particular circumstances.

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