In Ontario, a minor cannot receive money until he or she turns eighteen. However, there are times when children become entitled to property (such as an inheritance, insurance proceeds, or accident benefits) prior to reaching the age of majority.
It comes as a surprise to many parents that they are not automatically entitled to take control of property to which their child is entitled. Instead, generally speaking, the money has to be paid to the Accountant of the Superior Court of Justice (referred to as a “payment into court”) until the beneficiary has turned eighteen (an exception to this is when the amount in question is less than $10,000).
In situations where a parent (or both parents) wishes to administer a minor’s funds, s.47(1) of the Children’s Law Reform Act (“CLRA”) provides the authority to bring a court application, on notice to the Office of the Children’s Lawyer, to be appointed as guardian of property. Where more than one person is appointed as guardian of property, those people are jointly responsible for the care and management of the minor’s property.
Pursuant to s. 49 of the CLRA, the court is to consider all the circumstances, including the following:
- The ability of the applicant(s) to manage the child’s property;
- The merits of the plan proposed by the applicant for the care and management of the child’s property; and
- The views and preferences, where ascertainable, of the child.
A parent is entitled to compensation for acting as guardian of property, however the amount must be authorized by the court (if the terms of compensation have not been set out in a management plan, then a parent who wishes to receive compensation should bring an application to pass accounts).
It is essential that anyone acting as a guardian of property for a minor understand that they have an obligation to be able to account for their dealings with the minor’s funds. In this regard, careful records (with supporting documentation) should be kept of all transactions that take place. I always recommend that prior to acting as a guardian of property, parents speak to a lawyer to ensure they understand the full extent of their obligations.