Inheritance for a Child Under 18: How Ontario Trustees Hold It

When someone dies and a child under 18 is named as a beneficiary, the money cannot simply be handed over to a young child. Someone has to hold it, protect it and eventually pass it on. If you are a parent, guardian or trustee, you probably want to know where the money sits and who controls it.

This article explains the usual Ontario path: when a will sets the rules, what happens when there is no will, what a guardian of property does, how the Office of the Children's Lawyer fits in, and what happens when the child grows up.

Who counts as a minor and when does a child get the money?

In Ontario, a person reaches the age of majority and stops being a minor at 18. A child generally receives their share at 18, or at the age stated in the will or beneficiary designation.

That means the document matters. A will or a beneficiary designation may name a trustee and may set a later age for payment. If it does, the trustee follows those terms. If you are a trustee, read the document closely and ask a lawyer about anything unclear before you pay out or invest.

What happens when there is no will

Where there is no will and a child's share is $35,000 or more, the money is paid into court and held by the Accountant of the Superior Court of Justice. Smaller amounts may go to a parent or guardian of property. The same $35,000 threshold applies to life insurance with no named trustee.

Money held in court stays there until the age of entitlement, usually 18. Parents can ask for a payment out through the Minors' Funds Program of the Office of the Children's Lawyer only if they cannot afford an expense the child needs.

Paying money to a parent, or appointing a guardian of property

Where no guardian of property has been appointed, a person who owes money to a child may pay it to a parent the child lives with or to the child's lawful custodian, but only up to the prescribed amount.

A court may appoint a guardian of a child's property on an application made on notice to the Children's Lawyer. The guardian must post a bond payable to the child and must transfer all of the child's property to the child at 18. The bond requirement does not apply where the court appoints a parent and considers a bond unnecessary.

What the Office of the Children's Lawyer does

The Office of the Children's Lawyer must be served with an application to vary a trust or to pass estate accounts where a minor or unborn person has an interest. It represents the child and does not take instructions from the parents.

• On a passing of accounts, the notice of application and draft judgment must be served on everyone with a contingent or vested interest, and the Children's Lawyer is served where minors are involved.
• If a trust needs to be changed, the Superior Court of Justice may approve a variation on behalf of minors and unborn persons.
• The court will not approve a variation on behalf of a minor or unborn person unless it appears to be for that person's benefit.

In practice, this means a trustee cannot rewrite a child's entitlement just because the adults agree. The child's interest is protected by a separate representative.

What to do next

• Find the will, beneficiary designations and any insurance paperwork, and note any trustee named and any age set for payment.
• Confirm the child's date of birth and the date they turn 18.
• Work out whether there is a will and whether any life insurance names a trustee, because the $35,000 threshold can matter in both situations.
• Keep clear records of every amount received and spent for the child.
• Speak to a lawyer before applying to be a guardian of property, asking for money out of court, or changing the terms of a trust.

Each family's facts differ, so a lawyer can confirm which route applies to the money you are dealing with.

Frequently asked questions