Leaving Money to Minor Children in Your Ontario Will

Most Ontario parents assume that naming their children in a will is enough to protect them financially. It is a good start — but without the right structure, leaving money to minor children in an Ontario will can trigger a government-managed process that gives you no say in how or when your child receives those funds. Understanding what the law does by default, and what you can do instead, is one of the most important decisions in your estate plan.

This article explains the rules that apply when a child under 18 inherits in Ontario, the problems with the default system, and how a testamentary trust gives your family real protection and flexibility.

Why Minors Cannot Receive Property Directly in Ontario

Under Ontario law, a person under 18 does not have full legal capacity to hold property. The age of majority in Ontario is 18 (set under the Age of Majority and Accountability Act). This means a child cannot directly receive and manage an inheritance — whether it is cash, investments, or an interest in real estate — until they reach that age.

If your will simply says "I leave everything to my children equally" and one or more of those children is under 18 at the time of your death, a legal problem arises immediately. Someone must hold and manage that money until the child is old enough to receive it themselves.

What Happens by Default: The Office of the Children's Lawyer and the Public Guardian and Trustee

If your will does not name a private trustee to hold funds for a minor, Ontario law fills the gap — but not in the way most parents would choose.

The Office of the Children's Lawyer (OCL) may become involved to represent the child's interests in estate proceedings. More directly, the Office of the Public Guardian and Trustee (PGT) will hold and manage the child's inheritance until they turn 18.

Here is what that looks like in practice:

• The estate executor must pay the child's share to the PGT.
• The PGT manages the funds according to its own investment and administration policies — you have no input.
• Administrative fees are charged against the child's share.
• At 18 — and not a day later — the full amount is paid out to the child in a lump sum, with no conditions or staging.

There is nothing inherently wrong with the PGT; it exists to protect children's interests. But it was designed as a safety net, not as a substitute for thoughtful estate planning. A 17-year-old receiving a large inheritance the moment they turn 18 is rarely what any parent would choose.

The Better Alternative: A Testamentary Trust

A testamentary trust is a trust created inside your will that takes effect when you die. It is the standard solution for leaving money to minor children in an Ontario will, and it gives you far more control than the PGT default.

How a Testamentary Trust Works

Instead of paying your child's share outright to the PGT, your executor transfers those funds to a trustee you have named. The trustee holds and invests the money on your child's behalf and distributes it according to the terms you set out in your will.

You decide:

• Who the trustee is — typically a trusted adult such as a sibling, close friend, or professional trust company.
• What the trust funds can be used for — most wills authorize spending for the child's education, health, maintenance, and general welfare.
• When and how the capital is distributed — you can stagger distributions rather than releasing everything at once.

Staggered Distribution Ages

A lump-sum payout at 18 is almost universally a bad idea. A young adult who inherits a significant sum without financial experience often depletes it quickly, without the benefit of time or maturity.

A common approach is staggered distributions. For example, your will might direct the trustee to pay:

• One-third of the remaining trust capital when the child reaches age 21;
• One-third when the child reaches age 25; and
• The balance when the child reaches age 30.

These are illustrative ages — you can set any schedule that reflects your values and your child's situation. The trust continues to pay for education, health costs, and living expenses throughout the entire period, so the child is never left without support while waiting for a capital distribution.

Choosing a Trustee — Not the Same as a Guardian

Parents sometimes confuse the guardian and the trustee. They are different roles and can be — and often should be — held by different people.

• A guardian has physical custody and responsibility for raising the child.
• A trustee manages the money.

The person best suited to raise your children may not be the best financial manager, and vice versa. Separating the roles also creates a natural check: the guardian cannot access trust funds for their own purposes, and the trustee has a legal duty to act solely in the child's interest.

The Trustee's Investment Duties

A trustee in Ontario must invest trust assets in accordance with the Trustee Act. The Act imposes a prudent investor standard — the trustee must invest with the care, skill, diligence, and judgment that a prudent investor would exercise in managing a portfolio of investments. This standard requires diversification and prohibits speculative choices. If you are appointing an individual rather than a professional trust company, it is wise to include guidance in your will and consider whether they have the practical ability to meet this standard.

RESP and TFSA Beneficiary Designations for Minor Children

Not all assets flow through your will. Registered accounts such as RESPs and TFSAs are governed by beneficiary designations made directly with the financial institution.

RESP: An RESP already names a beneficiary — the child enrolled in the plan. On the subscriber's death, the plan typically continues or transfers according to the plan contract and federal rules. Confirm with your financial institution how your specific plan handles the subscriber's death, particularly if the child is still a minor.

TFSA: A TFSA holder can name a successor holder (a spouse or common-law partner) or a designated beneficiary (any person, including a child). If you name a minor child as the designated beneficiary of your TFSA, the funds will be paid to them — or, because they are a minor, held by the PGT — at death. The funds do not pass through your will and will not flow into a testamentary trust automatically. To route TFSA proceeds through a trust for a minor, you would need to name your estate as the beneficiary and ensure your will's trust provisions cover those funds. There are tax implications to this approach, so speak with an Ontario lawyer and a tax advisor before deciding.

Frequently asked questions