If you are the parent of a child under 18 (referred to as a ‘minor’), you may wonder what happens if your child inherits. There are a number of ways that a child may inherit:
- the child could be named as a beneficiary in a Will;
- the child could inherit from a relative who dies without a Will (referred to as ‘dying intestate’) if the child is one of the legal beneficiaries under the intestacy laws of Ontario; or,
- the child could be named as a beneficiary of a life insurance policy or any other asset where a beneficiary can be named, such as a segregated fund, an RRSP/RRIF, or death benefit.
In Ontario, a minor child is not permitted to receive a substantial inheritance directly, monetary or otherwise. Many parents of a minor child are surprised to learn that they do not automatically have the right to control an inheritance received by their minor child.
Inheritances under $10,000 may be paid to the parent of a minor child so long as the funds are used for a specific purpose to benefit the child. A Will may include a trust that appoints a parent or other person to act as ‘trustee’ of the minor child’s inheritance. If there is no trust, a parent can only control a minor child’s inheritance by applying to the Court to be appointed the minor child’s Guardian of Property. Whether appointed by the Will as a trustee or by the Court as a guardian, the parent must manage the inheritance for the minor child’s benefit and according to the terms of the Will or the Court Order.
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Blog posts pre-dated December 1, 2015 were originally published under Neff Law Office Professional Corporation.