A Voice From Beyond The Grave - Part 1 Providing Guidance To the People Listed In Your Will And Related Document

Colin Ritchie Most people quite rightly feel pretty good about finally signing their Wills and related documents such as Powers of Attorney and Representation Agreements. They have taken a huge step toward making sure the right people get the right assets at the right time, that the right people are empowered to make the appropriate decisions, and that their healthcare choices are clear, all the while hopefully ensuring that those left behind are still able to sit across the table from each other at family gatherings without needless bloodshed. On the other hand, as I generally point out in my egregiously long reporting letters after the fact, their work may not be quite done.

Although the Will may be the most important piece in their estate plan, there are a bunch of extra actions the “will-maker” (a fancy new term now used in B.C. to describe a person who signs a Will) can take to bump up the chances of success while reducing the ibuprofen intake of their trustees, guardians, representatives and attorneys along the way. This is information many people may not have considered. Accordingly, I plan on spending the next two articles telling you exactly what I mean. Today’s missive will focus on guardians and trustees while my next installment will cover everything else.

Guiding The Guardians

To begin with, I suggest thinking of your Will as a skeleton that provides the basic framework for what we lawyer types like to call your “testamentary wishes.” It spells out who is to get what and on what terms, often naming people like trustees and guardians to implement your wishes. No matter how well your Will is drafted, however, I believe that most of the time there are a lot of steps you can take yourself to put flesh on this skeleton. For example, although you’ve chosen who will be responsible for driving your kids to hockey practice if you’re not around to do it yourself, your Will probably doesn’t provide much guidance regarding what values, activities and lifestyle choices you want them to nurture in your children. Along these lines, here are just some of the issues you might want to address from beyond the grave — although I suspect that sometimes a list of general principles (such as encouraging your children to explore culture and music) might be more useful in some cases than specific decrees (such as compelling your kids to take violin lessons even if they hate it and would rather dance instead):

Are there certain hobbies or sports you want to ensure your kids pursue, such as music, swimming lessons, team sports or art?
Are there any cultural or religious matters you would like your kids to continue, such as going to church or learning your native tongue?
Are things like a summer job, doing volunteer work, travel or spending vacations with your relatives (and which ones) things to mention?
Dating?
Do you feel strongly about such things like limiting time in front of the TV, computer or cell phone, ensuring your kids learn the basics about cooking, cleaning and personal finance (my own favourite), or making sure your kids eat organic or stay away from food out of vending machines?

Tutoring The Trustees

Moreover, even if you’ve clarified that your kids are to spend their summers volunteering to assist the less fortunate, subsist on an organic diet, or have their electronic time limited to precisely two hours per month (assuming, of course, that they have the time to do this after devoting most of their spare time to learning interpretive dance and playing the ukulele), there may still be a glaring hole in your directions. Although the people caring for your kids might know precisely what you have in mind, there could still be big problems if the trustees aren’t aware of this vision and as a result aren’t willing to fund it. As well, even if your instructions to your guardians are enough to give your trustees guidance to handle the money side of things while your kids are minors, there are a panoply of additional money issues that may need to be resolved when your kids are old enough to vote, shave and drink microbrews. Here are just some of the things you could address in a letter to your trustees:

Whether you want your trustee to fund your kids’ world travels at some point: If your answer is yes, when and for how long? Some parents encourage their kids to see the world after high school, while others want their kids to keep their noses to the grindstone until after university; others still might want to prioritize other expenditures, such as saving for a first home. Also, even if you are in favour of your children spending some time abroad, you might not be so keen if this journey lasts two years rather than the three or six months you’d originally envisioned. Also, do you contemplate your children living out of a knapsack and staying at youth hostels, going 5-star all the way, or something in the middle?
Should your trustee buy your young ones a car or do they need to save for it themselves? Do they get new wheels when they turn 16 or only when going off to university? Do they get something fresh from the showroom or merely something “new to them”? If you have a strong environmental bent, would you be happiest if they are parking a hybrid in the driveway or perhaps just a bicycle?
What sort of guardian expenses are reasonable to you? Most parents do not want their kids’ guardians to suffer economically for taking on this role, but how this plays out is certainly open to interpretation. Noting that the person managing the money and the people managing your kids are often not one and the same, guidance given now means fewer awkward conversations later. For example, should your trustee pay for your guardians to go on vacation with your kids, or pay rent if your guardians have to buy a bigger home to house your offspring?
What standard of living do you wish your children to enjoy? Do you want them to have to struggle a bit so that they learn to budget, work hard to build a career, and know what it’s like to take on a mortgage, or would you rather they want for nothing?
Do you prefer that the trustee continue writing big cheques even if a child shows no intention of going to school or building a career, or reduce or cut off payments under such circumstances?

Conclusion

Intrigued by what you’ve read so far? In that case, make an appointment to check out the second installment in this series in the next edition of Canadian MoneySaver!

Colin S. Ritchie, LL.B., CFP, CLU and FMA is a Vancouver-based fee-for-service lawyer and financial planner who does not sell investment or insurance, just advice. To find out more, visit his website at www.colinsritchie.com.