Leaving money to minors: trusts, ages and the court's default

A child cannot sign a release, manage an investment account, or legally receive a bequest. So every will with young beneficiaries — children, grandchildren, or the contingent gifts that flow to them — has to answer two questions: who holds the money, and when does the child get it.

What happens if your will is silent

The default is the worst of the options. Money left outright to a minor is typically paid into court (or to a court-appointed guardian of property). The Accountant of the Superior Court in Ontario, and the equivalent public bodies in BC and Alberta, hold and invest it. A surviving parent who needs $4,000 for the child’s braces applies to the court for it. And on the child’s 18th birthday (19 in BC), they receive the entire remainder in cash, whether it is $10,000 or $800,000.

Ask yourself what you would have done with $800,000 at eighteen. That is the case for the next two sections.

The fix, part one: a trustee

Your will can direct that anything passing to a minor is held in trust by a trustee you name — commonly the same person as your executor, though it need not be. The trustee invests the fund and can spend income and capital on the child’s upbringing, education and health while the trust lasts. No court applications, no public guardian.

Choose the trustee with the same seriousness as the executor; it can be a longer job — potentially two decades of managing money for your children, alongside the guardian who is raising them. Trustee and guardian can be the same person; splitting the roles adds a useful check when the sums are large.

The fix, part two: an inheritance age

The trust needs an end. Your will names the age at which the fund is paid out — commonly 21 or 25. Some parents stage it: a third at 21, the rest at 25. Every year past the age of majority is a year of maturity purchased at the cost of the child’s autonomy; most people land at 25 for large amounts.

Two adjacent situations

RESP money. An RESP is your asset, not the child’s — it does not automatically continue for their education when you die. Our questionnaire asks about RESPs so the will can direct the plan’s continuation.

A beneficiary with a disability. An outright inheritance can disqualify a disabled adult child from provincial disability benefits (ODSP in Ontario, PWD in BC, AISH in Alberta). The answer is a Henson trust, and it is one of the cases where we tell you plainly to see a lawyer — asset limits and trust rules vary by province and the drafting genuinely matters.