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Monday, May 24, 2010

Do I have to leave anything to an illegitimate child I haven't seen in years?

When it comes to estate planning, people often take an "out of sight, out of mind" approach to illegitimate children who aren't part of their lives. They assume that because they don't have a current relationship with the child, and perhaps haven't had one in many years, that the child is simply not a factor in deciding where their assets go after they pass away.

Take for example a man in his late forties who fathered a child while in high school. He didn't marry the mother and has never been a part of the child's life. Later he married someone else and is raising a family with his wife. Most men in a similar position are so sure that the child has nothing to do with them that they don't even mention the child's existence unless I specifically ask. So let's look at what this means for everyone involved.

If the father dies without a Will, his wife will get what is often referred to as a spousal preferred share of the estate. The value of the share varies from province to province but in Alberta, the share is $40,000. After that, the estate is divided among the man's spouse and children. This means biological and adopted children. So, the illegitimate child, who is a biological child after all, is entitled to an equal share of the estate with the children of the man's marriage. That is usually not what the father wants, and it is pretty much guaranteed not to be what his wife wants.

So, we should assume that a man in this situation is going to make a Will expressing his wishes. This raises the question of whether the father must, by law, leave something to the illegitimate child.

The same rules apply to the illegitimate child as apply to everyone else. If the child qualifies as being a person entitled to claim financial support under a Will (i.e. a financial dependent), he or she must be included. If you leave out someone who is entitled to be included, you run the risk that the person will contest the Will. If the child does not qualify, then the father need not leave anything to the child.

In order for a child to qualify as a dependent, the child must either be under the age of majority or must be handicapped to the extent that he or she cannot earn a living. So if the child is under 18, the father must either leave a share to the child, or risk the child contesting his estate to get a share. One of the urban legends going around is that if you leave someone $1 in your Will, that person can't contest your Will. Not true.

Not all fathers want to leave the illegitimate child out of the Will completely. Some want to leave a financial gift simply to acknowledge that they are the father. While the father might not want to leave an equal share of the estate that he and his wife built up together, he might want to leave something from his own assets.

As I've said many times, don't assume you know how the law applies to you. It's always worth it to sit down with an estate planning lawyer and talk things over.

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