Essential Legal and Practical Steps New Parents in Canada

8/12/2024

Embracing the arrival of a new bundle of joy is an exhilarating journey that reshapes our lives. Yet, amidst the euphoria, it's imperative for Canadian parents to navigate the legal landscape that accompanies their child’s arrival. Beyond the cuddles and sleepless nights lies a realm of legal responsibilities and safeguards crucial for securing your child's future. In this guide, we delve into the pivotal legal steps new parents must undertake in Canada, ensuring a solid foundation for the precious journey ahead

1. Registering the Birth:

• Social Insurance Number (SIN): Apply for a Social Insurance Number (SIN). The SIN is essential for accessing government benefits and services.

• Birth Registration: Ensure to officially register your child's birth with the relevant province or territory authority. Typically, this process is facilitated through the completion of a paper form available at the hospital or birthing center.

2. Financial Benefits and Credits:

• Canada Child Benefit (CCB): Utilize the Automated Benefits Application (ABA) to enroll for the Canada Child Benefit (CCB). This tax-free monthly allowance assists in covering the expenses associated with child rearing. The precise amount is contingent upon the child's age and the household income. Eligible families can receive up to $6,400 annually for each child under the age of 6 and $5,400 for each child aged 6 to 17.

• GST/HST Credit: This tax-free quarterly disbursement offers modest-income families a reimbursement for a portion of the goods and services tax/harmonized sales tax (GST/HST) they have incurred.

3. Child Disability Benefit:

If your child qualifies for the disability tax credit, you are entitled to receive the tax-free Child Disability Benefit, monthly in conjunction with the Canada Child Benefit.

4. Child Care Expenses:

• If you're incurring childcare expenses while working, running a business, attending school, or conducting research, you might qualify for a deduction on those expenses.

5. Health and Safety:

• Health Card: promptly apply to obtain a health card for the child. Health cards (also called Care Cards), are a provincial responsibility. This card is vital to have access to health care services. These services include insured primary health care, such as the services of physicians and care in hospitals.

6. Parental Leave and Employment Insurance (EI):

• If you are currently employed, it's advisable to investigate parental leave options available to you and proceed with applying for Employment Insurance (EI) maternity and parental benefits.

7. Will and Estate Planning:

• One of the paramount steps for new parents is to consult with a lawyer to draft a will. A will serves as a legal instrument outlining the distribution of your assets after your passing. For parents, this process goes beyond distributing assets to certain beneficiaries; it also involves appointing a guardian of your choice for your child. By designating a guardian, you ensure that a trusted individual will take responsibility for your child if both you and your spouse pass away. Without a will, the determination of your child's guardian will be left to the discretion of the court, which may not align with your intended wishes for the individual you have chosen.

8. Obtaining Life Insurance:

• Life insurance is a vital consideration for new parents. Life insurance provides financial assurance for your family in the event of your death. The proceeds of the life insurance can be used to assist covering the costs associated with childcare, including daycare, or early childhood education. The proceeds from a life insurance policy can be used for various purposes, such as covering living expenses, childcare costs, and future educational expenses such as tuition fees. To that end, it is imperative to diligently assess your insurance requirements and ascertain that you have sufficient coverage to safeguard the financial well-being of your family.

9. Planning for Education Costs:

• With the rising tuition costs, planning to fund educational costs constitutes a substantial financial commitment for the new parents, which necessitate early planning for your child's academic future. Consider, establishing a Registered Education Savings Plan (RESP), affording you the opportunity to accumulate funds your child's education after high school, including trade schools, CEGEPs, colleges, universities, and apprenticeship programs, while your contribution grows tax-free. Additionally, it is also advisable to consider alternative education savings and investments to finance your child's future educational pursuits as the lifetime limit on the amounts that can be contributed to all RESPs for a beneficiary is $50,000.

10. Updating Beneficiaries and Estate Plans:

• As the dynamic of your family changes and the size of your family grows with the birth of a new born, it is imperative to periodically review and revise your designated beneficiaries and guardians. If there is recent births, deaths, or divorces in your family, it absolutely critical to review and assess if any revision in your will, trusts, and insurance policies is warranted. By keeping you Wills and other vital documents up to date, you can ensure and safeguard your child's future in accordance with your intended wishes.

11. Seeking Legal Advice:

• Navigating the legal landscape as a new parent can be daunting and complex. That's why it's highly recommended to seek advice from a qualified lawyer who focuses in estate planning and family law to discuss your specific circumstances and to asset you in drafting the necessary documents to ensure of your child's future security both financially and emotionally.

In summary, embarking on the journey of parenthood is a transformative experience accompanied by an array of new responsibilities. From asserting parental rights to safeguarding your child’s financial well-being, new parents encounter a multitude of legal matters that demand immediate attention. By proactively engaging in actions such as drafting or updating their will, securing life insurance, and seeking expert legal counsel, you can fortify your child’s future and ensure their protection. Navigating parenthood encompasses love, joy, and hurdles. By addressing these legal aspects, you lay the groundwork for your child’s flourishing future.