Kenneth Pope speaks about powers of attorney and your child's will.
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When I meet with my client families, one of the points of discussion is powers of attorney and wills for their children. We will of course have already discussed wills and Henson Trusts for the parents to provide for the child when the parents are gone, but what about the child? If they are competent to sign powers of attorney and they’re over 18 well then of course we would put that in place, but in a lot of cases they are not competent and that then brings you again to the discussion of what about wills?
Now the most common asset a person with disabilities might have these days would be a registered disability savings plan. The asset of the Henson Trust is not their estate, it’s their parent’s estate set aside for them and that trust provision has a distribution clause that dictates where when the beneficiary dies where what’s left goes. So that’s not them, it’s not the child.
But if you have an RDSP, the child has an RDSP and you contribute to it for 20 years, then you put $1,500 a year in and the government puts in $4,500. If it’s invested at 5%, at the end of 20 years it’s approximately $200,000 and if you leave it invested until the child is 60 when it vests, and all the grants and bonds vest, it’s approximately half a million dollars.
So if this child is not capable of signing a will when they die intestate, meaning with no will, what happens is one of the siblings, typically someone who has an interest in the estate, applies to the court probate application to be appointed the administrator without a will and then once they are in receipt of this asset, then by succession law it passes on and typically of course it would most commonly go to the siblings and there’s a whole succession law tree as to who gets it and how far out on the tree it goes if there are no siblings for example.
So you can see that this is worth considering. Now if RDSP’s were designatable and the person was capable, then things might be a little different, but even if it was designatable they can’t be designated or could not be designated by someone who is their executor or by someone who may have their power of attorney. That can’t be done. So we’re looking at intestacy and succession law and it’s going to happen more and more.