Who qualifies as a grandchild or great-grandchild under a will?

Check your will. Does it say that some part of your estate is to be left to your grandchildren or great-grandchildren? If so, is it your wish that the estate be shared with step-grandchildren, or just among those who are blood relations? It might be clear to you just who you intend to benefit, but perhaps it's not so clear to others who have to rely on your will for instructions.

Megan Connolly, a Toronto lawyer, has analyzed the recent Lang Estate case from BC, in which the court made a decision about who qualified as a grandchild under a will. Click here to read Ms. Connolly's post.

What happens to my child's inheritance if he or she dies before me?

I was asked this question at last week's seminar, and in fact I hear this question regularly. The real or underlying question is whether the child's inheritance will go to the child's spouse. Very few parents want a deceased child's inheritance to go to that child's spouse.

The answer is simple. What happens to the inheritance is what the parent says in the will. If a parent is concerned about the issue, then he or she had better put together a will that addresses it.

The arrangement favoured most often is that a deceased child's inheritance is split equally among his or her children, with the share of any minors being held in trust to a pre-determined age. For example, if William makes a will leaving his estate to his sons Tom and Joe, but Tom dies before his father does, William's will directs what happens with Tom's share. If William likes the most common arrangement, his will will say that Tom's share is to be divided among Tom's children.

From there, a parent such as William needs to clarify a few points. For example, does he want Tom's step-children to be included? What about the illegitimate child that Tom had in high school and currently has only a superficial relationship with?

William may leave some of Tom's share to Tom's wife if he wants to, though as mentioned above, this is fairly unusual. William must consider whether Tom's wife still gets a share if she and Tom were separated at the time Tom died. William also needs to think about whether Tom's wife should be the trustee of the money held in trust for Tom's children, and if not, who would be a good choice for that job.

Some parents choose that if one of their children has passed away before them, grandchildren don't get anything, nor does the spouse of the deceased child. The share of the estate would be given to the parent's other children. Using the family already described in this post as an example, Tom's share would be given to Joe instead. There could also be an arrangement whereby half (or some other portion) is given to Joe with the rest being given to Tom's children.

Another alternative is that a deceased child's share could be given to a charity.

All jurisdictions have laws in place that describe what will happen if a parent dies leaving a share to a child who has already passed away. These laws kick in if the person hasn't left a valid will. There is no guarantee that the legislated arrangement will be the same as what the parent would have chosen.  If the issue is important to the parent, he or she needs to make a will.

How can I prevent step-grandchildren from inheriting?

The question of making sure that step-grandchildren don't inherit a portion of a grandparent's estate comes up more frequently than you might think. Occasionally a client will preface the question with a remark like "I don't want to sound mean, but...", which I think is totally unnecessary. It's your hard-earned money so why should you feel bad about deciding who gets it - and who doesn't - after you're gone?

Grandparents often, but of course not always, feel differently about step-grandchildren than they do about their child's biological and adopted children. They tell me they feel less of a connection with the step-grandchildren. Although they acknowledge the step-grandchildren as a part of their children's lives, they don't always think of them as a part of their own lives. Many explain this by saying "they aren't my own flesh and blood".

This sentiment is very relevant for a grandparent who is preparing a will. In a typical family, spouses leave their estates to each other, and when the spouse has deceased, the estate is divided among the children. This isn't necessarily the law, but it is by far the most common and expected arrangement.

So the grandparent makes a will leaving everything among his or her children. The lawyer will then ask what should happen if one of the children should die before the grandparent. The most common and traditional arrangement is that the deceased child's children (the grandchildren of the testator) will divide the deceased person's share. (Now you see why I draw so many diagrams and family trees in meetings with clients!)

This is the point at which the grandparent asks about the step-grandchildren. These days, blended families are more common than the traditional nuclear family, so the grandparent is absolutely right to clarify who is in the group of "the deceased child's children" and who is not. The idea is not to punish a step-grandchild in any way. The goal is to leave as much as possible to the grandparent's own blood relatives. The secondary goal is to make it clear to anyone reading the will exactly what the grandparent intended so that there are no arguments or misunderstandings.

The grandparent who wants to exclude step-grandchildren is aided by law. Much of the law of inheritance is based on the concept of bloodlines. Therefore, a child or grandchild who is not related by blood (or adopted) is not normally automatically included as a beneficiary. If you want to know exactly what the law says in your province or territory, you should sit down with an experienced estate lawyer in your area. That way you can obtain specific advice rather than general information.

Grandparents often like to solidify and clarify this default position by specifically including a clause that defines who is meant by the word "grandchild" in their wills. It's a simple matter of a few words to explain who is meant to be included and who is not, and it may save the grandparent's estate from being embroiled in a dispute.

This works the other way too, of course. If you, as a grandparent, want to make sure that your step-grandchildren are included in your estate, you should make sure that is specifically set out in your will.