How Do Beneficiaries Get Paid When an Estate Has Minor Children in Ontario?

When a child is left money in an estate, the child cannot simply be handed it. Someone has to hold the funds safely until the child is old enough, and the rules depend on how much is involved and what the will says.

This article explains how an inheritance for a child under 18 is generally held in Ontario, the role of the Office of the Children's Lawyer, and when the money is released.

Who can manage a child's money

Many parents assume they can receive and manage a child's inheritance. In fact, parents are not automatically entitled to do so. That authority comes only from a court order appointing a guardian of property, and the application must be served on the Office of the Children's Lawyer.

If the will sets up a trust for the child and names a trustee, that trustee holds the money. A trustee must invest trust property with the care, skill, diligence and judgment of a prudent investor.

Smaller and larger amounts

The amount matters. In most cases where a child is to receive $35,000 or less, the money does not have to be paid into court. Under the Children's Law Reform Act, it can be paid to the parent the child lives with or to a person with lawful custody.

For $35,000 or more, the money must generally be paid into court, unless a trustee is named in a legal document such as a will or a guardian of property has been appointed. If the amount is close to that line, confirm which rule applies with a lawyer.

Money held in court and the Children's Lawyer

A minor's money paid into court is held by the Accountant of the Superior Court of Justice. It is paid out at 18, or at a later age set by a will, trust deed or court order.

Before then, a parent can ask for money for the child's benefit through the Office of the Children's Lawyer (Minors' Funds Program). This is how funds can be used for the child's needs while the rest stays protected.

There are costs. The Accountant charges 3% on receipts and disbursements and a care and management fee of 0.60% a year. No fee is charged on the first payment into court for a child, and fees are capped so they never exceed the month's interest. Fees can change, so confirm the current rates.

Special situations for estate trustees

• If a minor is named as sole executor, administration with the will annexed is granted to the minor's guardian until the minor turns 18.
• On the final passing of accounts, a trustee must pay into court any money belonging to a minor.
• If the Public Guardian and Trustee is guardian of property for the person entitled, the money is paid to the Public Guardian and Trustee instead of into court.

A will can also set the age at which a child receives the funds, and that choice affects when money is released.

What to do next

• Read the will to see whether it names a trustee for a child's share or sets an age for payment.
• Find out how much the child is to receive.
• If there is no trustee, ask a lawyer whether to apply to be appointed guardian of property, which requires serving the Office of the Children's Lawyer.
• Do not pay a child's share to a parent without confirming it is allowed.
• Keep records of any payments you make on the child's behalf.

Frequently asked questions