Do parents have the right to make decisions about their children's assets (property/money)?

Region: Ontario Answer # 977

In Ontario, a child cannot receive money owed to them until reaching the age of majority. While a parent is considered a “guardian” of his or her child, that does not mean the parent is automatically the “guardian of property” or assets of the child and will receive the money owed to the child. Parents can only receive guardianship of property on behalf of a child through legislation, a court order or another document, such as a Will.

Children under the age of 18 can acquire significant assets through a variety of means, including:

  • damages ordered from winning a court case,
  • an inheritance from a Will,
  • benefits from insurance policies where the child is the beneficiary (such as life or accident insurance),
  • an RRSP or other pension plan where the child is the beneficiary, and
  • from gifts.

Assets may include money, personal property, real estate, corporate shares, jewelry, and so on.

Parents with legal guardianship of their child’s property

Parents with legal guardianship of their child’s property are legally permitted to manage those assets. They are permitted to do anything that an adult would be able to normally do, except to make a Will involving the asset. For example, a parent can open and close bank accounts, deal with investments, collect debts, pay bills, start or defend lawsuits (if there are financial implications) and maintain the property.

That said, a guardian of property must keep the child’s financial accounts and transactions separate from his or her own. The parent must keep good records. Parents cannot borrow or use the child’s money for themselves, or other family members unless authorized by a court or under provincial legislation.

As guardian of the property, if possible, a parent must encourage the child to participate, to the best of the child’s abilities, in decisions about the property. And, of course, the guardian must act responsibly in managing the assets.

No legal guardianship: amounts $35,000 or less

Under the Children’s Law Reform Act (CLRA), if no guardian of a child’s property exists or has been appointed and the total amount owed to the child is $35,000 or less, the money or assets may be paid or transferred to:

  • a parent with whom the child resides,
  • a person with lawful custody of the child, or to
  • the child where he or she has a legal obligation to support another person.

This also applies to money payable under a judgment or order of a court, or when there is no Will to provide instructions.

Anyone receiving money or property on behalf of a child has the same legal responsibilities as a “guardian of property” for its care and management, according to the Act.

Amounts over $35,000

When a child under the age of 18 has received funds totalling over $35,000, the money will be paid into court and managed by the Accountant of the Superior Court of Justice. The assets will then be held in trust, often with interest, until the child reaches the age of 18. This is only the case if:

  • no person has named as the trustee of the child’s money in a legal document, such as a Will or beneficiary designation, or
  • no one has been appointed by a judge as a guardian of the child’s property

If the child requires the money before the age of 18, Ontario’s Office of the Children’s Lawyer has a simple procedure for parents and caregivers to request monies for the direct benefit of the child through the Minor Funds Program.

Application for appointment of guardian of property of a child

If the total amount of money owing to a child is over $35,000, the parent or any other person may make a formal application to the Court for a guardianship of property authorizing him or her to receive and manage the child’s money or property if they do not want it paid into court. This order is issued under the CLRA.

Under section 49 of the Act: in deciding the application, the Court shall consider all the circumstances, including,

(a) the ability of the applicant to manage the property of the child;

(b) the merits of the plan proposed by the applicant for the care and management of the property of the child; and

(c) the views and preferences of the child, where such views and preferences can reasonably be ascertained

Land owned by a child

Under common law, minors have the power to hold an estate in land. A parent does not have the right to make decisions about a child’s interest in land without the help of a court.

Under the Act, courts have the power to order the sale of a minor’s interest in property where it is necessary for the good of the minor.

For more information, refer to the Ministry of the Attorney General website or view the Children’s Law Reform Act.

If you require legal advice, contact a lawyer.



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