Paul Scardetta
Paul Scardetta asked Lynne Butler:

My spouse and mother of our 3 children died with no will. She did leave a life insurance policy that lists our children as the beneficiaries and the grandparents as the trustees. The grandparents have never been close with us and, now since her passing, they do not call or contact us at all. My fear is that my children may not be able to benefit from the funds now or ever. How can I ensure that they do?

Lynne Butler You're in a position that most parents don't like, that is, you do not have legal control over matters that deal with your children.

You as a parent have no rights of any kind to control this situation. The grandparents were appointed as trustees and as such they are the ones who represent the children's interests. I know it seems as though you should be able to mandate what happens, when it happens, etc. but you do not.

Because the funds were left in an insurance policy and not a will, there will not be provisions that instruct the trustees about such things as using the money for education or maintenance of the children. An insurance policy provides valuable funds but it would have made a lot more sense if your spouse had left the funds to her estate and used the will to determine how the money could be used. As it is, the trustees do not have to pay anything to the children until each child reaches legal age, at which the child gets the full amount of the policy plus whatever it has accrued while invested.

The trustees are bound by your province's Trustee Act. This sets out the scenario in which the trustees may not use the funds for their own use but must only use the funds for the best interest of the children within the parameters of the policy.

If you have concerns (and evidence) that the funds are being misused or spent on someone other than the children, you can advocate on behalf of the children to have the trustees removed. Lack of contact is not enough to remove someone. This is pretty drastic and involves a lawsuit in which a judge would be asked to remove the trustees and have someone else put in charge. Most likely that new trustee would be the Office of the Public Trustee in your province.

Perhaps you could ask them to provide you with a statement once a year on the basis that you want to do your own financial planning for things like future education, etc. You are not in a position to demand a statement, but the trustees may be willing to provide it just to ensure that everything stays on an even keel.

Lynne

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