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Saturday, September 26, 2015

Can my ex get her hands on the money I'm putting in trust for our son?

Can an ex ask the court to put her in charge of her minor child's inheritance even though she wasn't named as trustee? Yes, it's possible. A reader recently asked me about this idea, and I'm sharing his question and my comments here:

"I have an 8 year old son with my ex.  I made a will up back in 07 with instructions on how to distribute the money to my son with the executor being my mother. Is there any way that my ex can contest my will feeling that my son should get the money as an excuse to get her hands on it?"

Contesting your will so that your son gets the money doesn't make sense, because your will already says he is getting the money. I'm going to fill in the blanks a bit here, and assume that his inheritance is to be held in a trust and you're actually asking about your ex trying to become the trustee of the son's trust so that she controls the money immediately.

You could be asking me whether your ex can ask the court to eliminate the trust entirely and simply pay the money to her. The child is not old enough to inherit, so a trust is appropriate. Paying the money to her is not the same as giving it to him, and doing so would directly contravene your very appropriate wishes. I don't believe that application to the court would have any success at all.

Normally, the trustee of any trust created by a will is the executor of the will. In your case, this would be your mother. Given that your mother is a generation older than you, and by the time your son is ready to inherit (which is at least another ten years from now) she may be getting on in age, I hope that you have named an alternate trustee. I'm not saying that your mother may pass away in that time, but she could become ill or incapacitated, and it would be best if you had someone lined up to take her place if need be.

Yes, your ex could approach the court if she felt that the trust was not being administered properly. Not having seen your will, I don't know the terms of the trust so I cannot comment on specifics. However, I assume that the trust at the very least talks about the age at which your son will inherit, and whether the trustee may encroach on the trust to pay expenses for your son before he reaches the age of inheritance. Your ex might claim to the court that these guidelines are not being followed and that she would do a better job of following them.

There will necessarily be some interaction between your ex and the executor of your estate simply because your ex will continue to be the person with the care of your son if you pass away. Even if you named a guardian, doing so would have no impact if your ex outlived you.

Having an alternate trustee named would protect the trust if your ex decided to approach the court. In general, courts don't simply take a trust away from a named executor or trustee just because someone asks them to. There has to be a good reason to go against what's in the will. If the court agreed  your mother wasn't doing a good job for some reason, the job could pass to an alternate executor.

You can also include some specific language in your will that makes it clear that you do not want your ex to be the trustee of your son's trust. I've included language like that in wills for divorced people numerous times. I feel this is important because it's not unusual for a parent to be allowed to be the trustee of their own child's trust, but if you don't feel that's in your son's best interest, you should say so in the will.

Make sure you spell out these concerns to your wills lawyer. If you don't say what your goals and fears are, you may not get the advice and the document you really need.

1 comment:

  1. Hi Lynne, I love your site and have a question. My father passed and I am the executor. I recently found out he has an offshore account. I recall him saying years ago he wanted to protect himself from currency risk (CDN dollar declines) so I guess this is what he did to try to avoid it. The money has been there at least 10 years (that is the last statement I find). It is less than $100K Canadian and I don't see it noted on his previous tax returns. Do you know how I would repatriate this money to the estate legally and above board with the CRA? Thank you very much for any direction you can provide.


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