Estate planning in a blended family has to provide for your spouse and your children at once

Who can challenge my will in a blended family?

Your spouse and each of your children, including adult children who support themselves, can apply to vary your will under section 60 of the Wills, Estates and Succession Act. Stepchildren can't unless you adopted them. A separated spouse generally can't either, because separation ends spousal status. The claim must be started within 180 days of the grant of probate.

A blended family can include three groups of children: yours from before, your spouse's from before, and any you have together. Only your own children, by birth or adoption, can claim against your estate, and only your spouse's own children against theirs. A stepchild you raised from infancy has no claim against your estate, and inherits from you only if your will names them.

The court asks whether the will makes adequate provision in all the circumstances, looking both at what the law would have required of you during life, such as support and a fair share of property for a spouse, and at what a fair-minded person would see as a moral obligation, including to adult children. It doesn't have to divide anything equally, and a will that treats people differently for clear reasons can stand.

The wills variation page explains who can apply and how a court decides. For planning, the point is that your spouse and your children both have standing, and the plan has to be defensible to each of them.

How do I provide for my spouse and still leave the house to my children?

A common answer is a trust in your will that lets your spouse live in the home, or receive income, for the rest of their life, with the home going to your children afterward. The will names a trustee, says who pays taxes, insurance and repairs, and sets out what happens if your spouse wants to move.

This is often called a life interest. Your spouse has the use of the home, and sometimes the income from other investments, during their life; your children hold the remainder and receive the capital when the life interest ends. The trust can let the trustee sell and buy a smaller home, or end the interest if your spouse remarries or moves out for good. Each of those choices moves value between your spouse and your children, so the will should make them.

Upkeep causes most of the friction. The will should say whether your spouse pays the property tax, insurance, strata fees and ordinary repairs, and whether the trust pays for a new roof or other major work. Without that, the spouse living there and the children waiting to inherit pull in opposite directions over every repair.

Choosing the trustee is the hardest part. Your spouse as sole trustee can make decisions that affect your children; one of your children as sole trustee can leave your spouse feeling like a tenant. Many people name co-trustees, one from each side, or an independent person or trust company, and say in the will how disagreements are settled.

Tax needs an accountant before the will is signed. A trust that gives your spouse all the income for life, with no one else able to receive capital in that time, can qualify as a spousal trust under the Income Tax Act and defer capital gains until your spouse's death. The conditions are strict, and the principal residence exemption works differently inside a trust. Trusts set up during life, such as alter ego and joint partner trusts, are another route for some older couples.

Should we make mirror wills or mutual wills?

Mirror wills are two matching wills, usually leaving everything to each other and then to all the children. The survivor can change theirs at any time, so your children's share depends on the survivor's goodwill. Mutual wills add a binding agreement not to change them, which a court can enforce after the first death if the agreement is proved.

In a blended family the weakness of mirror wills is plain. If you die first and your spouse inherits everything outright, your spouse's later will decides what your children receive. A new partner, a falling out or simple drift can leave your children with nothing, and as stepchildren they have no claim against your spouse's estate.

Mutual wills are made under an agreement that neither spouse will change their will after the first death. If the survivor does, a court can impose a trust over what the survivor received to give effect to the agreement. They are uncommon because they tie the survivor's hands for decades, can be hard to prove, and leave questions about property the survivor acquires later. A trust in each will usually protects the children without depending on a promise.

Plan for the survivor marrying again. Marriage no longer revokes a will in BC, but a new spouse can claim against the survivor's estate, and a joint tenancy with that new spouse would pass the home outside the will altogether. A trust set up in the first spouse's will keeps the children's share out of the survivor's estate.

Can a marriage agreement protect my children's inheritance?

Partly. A marriage or cohabitation agreement mainly decides how property is divided if you separate. It can also record what each spouse expects to receive, or gives up, on a death, but whether a spouse can give up a wills variation claim in advance is not settled, so the agreement supports the will rather than replacing it.

In a blended family the agreement's main job is to keep property each of you brought in, especially a home, apart from the family property you build together, so that a separation doesn't divide what you meant your children to inherit. It can list what stays with each person and how any rise in its value is treated.

On a death, a court hearing a variation claim can take the agreement into account in deciding what is adequate for the surviving spouse, particularly if each of you had advice and the terms were fair when signed. An express release of variation claims may carry weight, but whether it bars a claim outright is unsettled. Write the will to match the agreement, so the two documents point the same way.

The agreement must be in writing, signed by both of you and witnessed, and a court can set aside or replace one that is significantly unfair under section 93 of the Family Law Act. Full disclosure of each person's property and debts, separate legal advice, and time to consider the draft are what make it durable. An agreement produced the week before a wedding is the easiest kind to attack.

Which assets skip my will, and how can I use them on purpose?

Property held in joint tenancy passes to the surviving joint owner, and plans and policies with a named beneficiary pay that person directly; neither goes through the will. A blended family can use both deliberately, for example life insurance naming your children to fund their share while the home goes to your spouse, but they must fit the will.

A home in joint tenancy with your spouse passes to them outright when you die, whatever your will says about your children. If you want your children to inherit your share, you need a tenancy in common, with your share left by will, often into the life interest trust described above. Changing how title is held is a registered transfer with its own tax and lender questions, covered on the title transfers page.

Designations on RRSPs, RRIFs, TFSAs, pensions and life insurance can carry a large part of what you own. Naming your spouse on a registered plan can allow the tax to be deferred, a point for your accountant, while naming your children on a life insurance policy can give them a share that doesn't depend on the home. List each designation with its rough value, and let the will balance the rest.

Assets put into joint names with an adult child are a different case. Where a parent adds an adult child to an account or title without payment, the law presumes the child holds it for the parent's estate unless the parent meant a gift, as the Supreme Court of Canada held in Pecore v. Pecore. A short signed note of what you intend, made at the time, prevents an argument between your spouse and your children later.

What happens if I die without a will in a blended family?

The intestacy rules in Part 3 of the Wills, Estates and Succession Act give your spouse a first share, then divide the rest between your spouse and your descendants. That first share is smaller where some of your children aren't also your spouse's children. Stepchildren receive nothing, and your spouse has particular rights over the family home.

The rules are mechanical. They don't ask who needs what or tell a young child from an adult one, so a blended family rarely gets the result it would have chosen. Your spouse may end up sharing ownership of the home with your children from an earlier relationship, an arrangement that rarely suits either side for long.

Your spouse can generally choose to take the spousal home as part of their share, and can stay in it for a time while that is worked out. Your children inherit the rest of your estate, and a minor's share is managed by the Public Guardian and Trustee until the child comes of age. There is no will to vary, so no variation claim arises.

This guide doesn't give the amounts of the spouse's first share. A lawyer can confirm the current figures for your estate.

Who should be executor when my spouse and my children may not agree?

Someone both sides can accept, who will treat them fairly. That may be your spouse and one of your children acting together, a neutral relative or friend, or a trust company. Naming your spouse alone, or one child alone, puts a person with a personal stake in charge of decisions the other side will question.

An executor who also inherits always has some conflict of interest, which the law allows, but the duty is to administer the estate for every beneficiary. In a blended family the conflict is sharper. The executor decides when the home is sold, how assets are valued, who receives which belongings, and when the estate is distributed. A spouse living in the home and children waiting for it see each of those decisions differently.

Co-executors from each side have to agree, which protects both, but they can stall if they don't get on; the will should say how a deadlock is broken. A trust company or other professional executor charges for the work but has no stake in the outcome. Whoever you choose, name an alternate.

The same thinking applies before death. Your enduring power of attorney and representation agreement decide who manages your money and your care if you can't. Your spouse and your adult children may each expect to be named. You can appoint more than one person, divide the roles, and say how they must consult each other.