Trust for a Minor Child in Ontario: Options When a Parent Dies

When a parent dies and a child is left money, the practical question is who looks after it and for how long. A trust is one way to hold the money for a child until they are older, with a trustee managing it in the meantime.

This article explains how that generally works in Ontario, what changes at age 18, and what a trustee is expected to do. Every trust depends on its own wording, so a lawyer should confirm how your situation fits.

Why a trust is used for a child

A minor cannot manage a large sum, so someone has to hold it for them. With a trust, the trustee holds and invests the money and uses it as the trust document allows, until the child reaches the age set for receiving it.

In Ontario, a person reaches the age of majority and stops being a minor at 18.

When the child gets the money

A child generally receives their share at 18, or at the age stated in the will or beneficiary designation. This means the age can be later than 18 if the document says so.

If a court appoints a guardian of a child's property instead, the guardian must transfer all of the child's property to the child at 18.

What the trustee must do

In investing trust property, a trustee must use the care, skill, diligence and judgment of a prudent investor. A trustee must consider listed criteria when planning investments, must diversify to an appropriate extent, and may obtain investment advice.

A trustee is not liable for an investment loss if the conduct that led to the loss followed an investment plan or strategy that a prudent investor could adopt. The trust's terms still come first, because the Trustee Act's investment powers do not authorize or require a trustee to act inconsistently with them.

A trustee is entitled to a fair and reasonable allowance for their care, pains and trouble and the time spent, fixed by a judge of the Superior Court of Justice. That section does not apply where the document creating the trust fixes the allowance.

Changing or reviewing the arrangement

The Superior Court of Justice may approve an arrangement varying or revoking a trust, or enlarging the trustees' powers, on behalf of people who cannot consent themselves, including minors and unborn persons. The court will not approve it for a minor or unborn person unless it appears to be for that person's benefit.

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.

A beneficiary who objects to a trustee's accounts must serve and file a notice of objection at least 35 days before the hearing date.

What to do next

• Find the will or trust document and read when the child is to receive the money.
• Check for beneficiary designations, such as on insurance or registered plans, and the age they set.
• Confirm who the trustee is and whether they are willing and able to act.
• If a trustee cannot continue, ask a lawyer about appointing a replacement.
• Keep records of every payment from the trust for the child.

If the trustee dies, refuses or is unfit or incapable of acting, a new trustee may be appointed in writing under the Trustee Act, and the Superior Court of Justice can also appoint one. A lawyer can explain which route fits.

Frequently asked questions