Learn how wills, guardians and trusts can help protect a child’s inheritance and future care in Ontario.
Estate planning for minor beneficiaries usually involves naming a preferred guardian and creating a trust to manage the child’s inheritance until a chosen age.
Parents often think about who would care for their children if something happened to them. It is just as important to decide who would manage the children’s inheritance.
Estate planning for minor beneficiaries means creating clear instructions for a child’s care, money and property. A will can name preferred guardians, create a trust, and appoint someone to manage the inheritance.
Naming a Guardian in Your Will
Parents can use a will to express who they would like to care for their minor children. Naming a guardian provides useful guidance, but it is not always the final decision. A court must still consider the child’s best interests.
When choosing a guardian, consider the person’s relationship with the child, health, location, family responsibilities, and values. Naming an alternate is also wise in case the first person cannot act.
Creating a Trust for an Inheritance
A minor cannot simply take control of a large inheritance. Without clear trust instructions, money may need to be paid into court or managed by a court-appointed guardian of property. A parent does not automatically have authority to manage property inherited by their child.
A will can create a trust and appoint a trustee to manage the funds. The trustee may be allowed to use money for:
- Education and school expenses
- Health and personal care
- Housing and daily needs
- Activities that benefit the child
This flexibility is a key part of estate planning for minor beneficiaries.
Choosing the Right Distribution Age
Without suitable planning, a child may become entitled to funds at age 18. Many parents feel that this is too young to manage a substantial inheritance.
A trust can delay the final distribution until a later age. It may also release the inheritance in stages, such as one portion at age 25 and the balance later.
The right age depends on the amount involved, the child’s needs and the family’s goals.
Separating the Guardian and Trustee Roles
The guardian caring for the child does not have to be the trustee managing the inheritance. One person may be a strong caregiver, while another may be better at handling money and records.
Parents should also consider added planning for a child with a disability. An outright inheritance may affect access to income-tested benefits or create challenges if the child requires lifelong support.
Build a Plan Around Your Child
Effective estate planning for minor beneficiaries protects more than money. It gives trusted people guidance about your child’s care, education and future.
To discuss your family’s plan, speak with Samantha Machado, review our Estate Planning services, or read our Practical Guide to Estate Planning in Ontario.
Quick FAQ
Yes. You can express your preferred guardian in your will, but a court may still need to confirm the arrangement based on the child’s best interests.
Not automatically. A parent or another person may need to apply to court to become the guardian of the child’s property unless the will creates a suitable trust.
They can be, but they do not have to be. Separate appointments may work better when one person is suited to caregiving and another has stronger financial skills.
