Can I say in my will that my sons' ex spouses can't get money going to my grandchildren?

Do you ever worry about an ex son-in-law or ex daughter-in-law getting their hands on money you leave to your grandchildren? If so, you're not alone. A question about that topic from a reader prompted today's discussion, so read on.

"Can I state in my will that any monies going to my grandchildren can not be gotten by my sons ex-spouses if my son have passed away and their children are minors?"

This is a topic that comes up regularly in my meetings with clients. Many people leave their estates among their children with instructions that if a child should die before them, the deceased child's children would inherit the deceased child's share. That part is all very well, but the parents are concerned about ensuring that any money that should go to their grandchildren in this situation does actually get to the grandchildren and not to their son-in-law or daughter-in-law. They, rightly, wonder what would happen if the funds were left to a son-in-law or daughter-in-law who then went on to marry someone else. Because the topic comes up so often and has now been raised by this reader, I thought we'd discuss it here today.

The first thing that you need to know about the situation is that if you leave money to a grandchild, or a grandchild becomes entitled to a share of your estate because his or her parent has died, then the grandchild's share is held by a trustee. This will be the case if your grandchild is a minor or has not reached the age you specify in the will. There is a difference between the two because sometimes grandparents say that the grandchildren cannot inherit until they are 21 or older.

The trustee is the person who holds and invests the money on behalf of the grandchild. He or she has full power to decide when to make payments to the grandchild or to third parties on behalf of the grandchildren. The trustee has full control of how the money is spent, as long as he or she is acting in accordance with your will. In the context of today's topic, the trustee becomes important because parents tell me they don't necessarily want their sons-in-law or daughters-in-law to be the ones who decide how the money is spent.

So, who is this trustee we speak of? Unless you say otherwise in your will, the trustee of the grandchildren's money is the executor and trustee of your will. Therefore, your first step in ensuring the money goes where you want it to go is to choose an executor who is going to follow your wishes. As part of this step, make sure you name at least one alternate executor. When there is an alternate available, you ensure that if something happens to your first choice executor, there is someone you trust to step in and carry out your wishes.

If you want to, you can take it a bit further and state that under no circumstances is the spouse of  your deceased child to become the trustee for the children. I've put this into wills where there is a concern about an addiction or where the parents of the grandchildren are experiencing marital troubles that my client thinks may end in a divorce.

Another solution is to choose a trust company as trustees of the trusts that would be held for your grandchildren. This makes most sense where there is a lot of money involved, as there is always a risk when you leave a large sum of money in someone's care for a minor. A trust company will stick to the will, has experience with handling trusts, and has professional money managers in-house.

The second thing you need to do is ensure that your wishes are clearly stated in your will. I am talking about stating who gets to own the money as opposed to who gets to control the money. Say clearly that if your child passes away before you do, you want the full inheritance to go to his or her children. Give straightforward instructions about how old the grandchild must be to inherit.

Most importantly, talk about the discretion you are giving your trustee to use the funds for the child. While the child is a minor, can the funds be used for medical emergencies? What about post-secondary education? And what about general support for the child's lifestyle? This is where your executor and trustee will rely on your will to deal with a son-in-law or daughter-in-law who asks for money from the grandchild's trust. If your will says that while your grandchild is a minor, the funds can be used for whatever he or she needs, what is stopping that grandchild's parent from asking the executor/trustee for a few thousand dollars a month to feed, clothe, and entertain the grandchild? If you don't want that, you have to say so in your will.

While I don't like the idea of controlling from the grave, I am all in favour of setting up detailed wills that offer instruction and support for executors and trustees. The stronger your will, the more likely your wishes will be carried out and the less likely there is going to be a struggle between those left behind.