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Modern Estate Planning for Modern Families

I recently had the pleasure to participate in a webinar for the Canadian Legal Innovation Forum on contemporary drivers, trends and disruptive forces in estates practice and how estate lawyers are evolving their practices to meet them.

One of the topics addressed in our panel discussion was generational and societal shifts, and how estate lawyers must respond to meet changing client needs and expectations.

I recounted how complex families now are, and how many more forms of family structure there are.

When I first started practicing estate planning, the traditional nuclear family composed of a married male and female with children represented by far the majority of my clients, with very few exceptions. Now, from a societal viewpoint, the traditional nuclear family is in the minority, comprising approximately only about a third of North American households.

There are cohabiting couples outside and inside legal marriage, whether heterosexual or same-sex, divorced families, single parent by intention, single persons, blended families where a couple has come together with children from prior relationships (which in the Canadian context represent about one in ten families) and polyamorous relationships, among others.

Adding to this complexity is the changing concept of parentage. In Ontario, before passage of the All Families are Equal Act, parentage was defined only by biological connection between a parent and a child or by legal adoption. This legislation was a game changer, and now at law biological parentage while relevant is no longer determinative of parentage.

A person who has contributed genetic material is not automatically a parent, which deals with the situation of donors of genetic material. And persons who are not biologically connected to a child can be their parent automatically without adoption or a declaration of parentage in certain situations.

The law is now based on having a pre-conception intention to be a parent in certain cases, including allowing for pre-conception parentage agreements, which can provide for up to four parents. No doubt in comparison to many other jurisdictions, Ontario is on the leading edge in redefining parentage and what is a family. The legislation is geared to providing a broader legal recognition of family structures, in particular to meet the needs of the LGBTQ+ community.

Adding to the complexity of the modern family is how differently each jurisdiction deals with these issues, including in the succession of property context.

As the modern family moves from place to place, the law will differ on such basic notions as who is considered a child, a lineal descendant or “issue”, a parent and a spouse, impacting the meaning and rights that attach to each term or status, including for purposes of their definition in legal documents such as a will or trust, and statutory rights such as to share in property on an intestacy, to make a claim for division of family property on a relationship breakdown or death, or to have standing to be a substitute decision-maker on incapacity, as just a few examples.

However, with good estate planning and well-drafted documents, many of these challenges can be overcome.

As society and the modern family continues to evolve, so does the need to stay on top and keep current, to ensure that appropriate planning options are considered for these more complex situations. Drafting considerations are also important, and beneficiaries must be carefully defined in estate planning documents to carry out a person’s wishes, and that the definitions used are neither over-inclusive or under-inclusive.

Consider for example if there is a second same-sex marriage, with stepchildren and natural children from a prior opposite-sex marriage, and children born with reproductive technology in the second marriage. It will be critical to define what is meant when the term “child” and “issue” is used and to consider which beneficiaries are to be included, and which are not in such a challenging situation.

Interestingly, while people’s family situations have become more complex, there seems to be a growing desire by many, perhaps as a reaction to too much complexity, to have more simplicity, and not to overly complicate things in seeking professional advice. Trying to find that right balance is difficult to achieve, and it will likely become only more so in estate planning in the future.

— Margaret O’Sullivan

The comments offered in this article are meant to be general in nature, are limited to the law of Ontario, Canada, and are not intended to provide legal or tax advice on any individual situation. Before taking any action involving your individual situation, you should seek legal advice to ensure it is appropriate to your personal circumstances.