Grandparents Raising Grandchildren (among the noblest of deeds, but you still need to plan!)

For many different reasons, grandparents in our society are sometimes called upon to raise some or all of their grandchildren. The circumstances are usually not pleasant, but the job, honourable as it is, is hard given the age levels, most certainly tiring and without a doubt will  lead to some degree of change to existing retirement and Estate plans.

Background
In 2006, more than 65,000 children across Canada were being raised by grandparents (with no parental involvement). Approximately half involved only one grandparent doing the job.

In B.C. that year, 9,940 children were being raised by grandparents. Two-thirds of the grandparents were women. The 2011 census suggests that the numbers are rising.

There are several ways in which children are moved into their grandparents’ care. There may be an informal arrangement. There may be a Court Order pronounced for custody, or there may be an adoption. I would suggest that a grandparent in this situation get some advice. There is no one arrangement that
necessarily applies to every family.

Benefits
Every grandparent in a so-called skip generation family should look into their eligibility for benefits. Our provincial government recently published “Grandparents Raising Grandchildren; a Legal Guide,” which should assist. Contacting the Public Guardian & Trustee of B.C. will also be helpful.

There may be benefits through our Canada Pension Plan. The Canada Child Tax Benefit, the EI Family Supplement and Regular Income Assistance should all be investigated and considered.

Incapacity Planning
Raising grandchildren will probably require a re-examination of your existing incapacity plan. You may need a new Attorney to act for you, given your existing one (perhaps that child whose child you are now raising) likely cannot or should not act. Choose carefully.

A Representation Agreement should also be made or reconsidered. Becoming a parent again forces a reconsideration of the people around you and what you may now require of them.

Estate Planning
You should review your Will. I expect some changes will be needed. As just one example, a child who can no longer raise his or her own child should perhaps not receive a bequest in your Will. But that child still has rights under the Wills Variation Act.

In addition, you may need to change one or more of your Executors because your earlier choices for this important office now cannot act or be involved in your Estate. You have to choose carefully. Again, get some advice because you may have fewer people to choose from!

If a grandchild is disabled, a discretionary trust, in a Will or otherwise, may be useful. Again, you should get some advice.

If possible also, consider starting an RESP for your grandchild. The Federal Government matches contributions (within limits), making the RESP an important savings vehicle for future education.

Summary
Becoming the head(s) of a skip generation family is, for most grandparents, probably not foreseen, and is a challenge. I expect that most often there isn’t a lot of time given to these choices. The transition is relatively quick. That is hard.

But in this situation, it is important that there be a thorough and full review of existing retirement, incapacity and Estate plans. Time is hard to find for grandparents in skip generation families, but in my opinion there is no choice. The uniqueness of the situation demands a new set of plans.

This column appeared in the Richmond News on September 28, 2012.