Area of Law: Children and the Law
Answer # 977
Do parents have the right to make decisions about their children's property?Region: Ontario Answer # 977
In Ontario, 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. 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.
Amounts under $10,000
If money or property for a child does not exceed $10,000 in value and is not payable under a court judgment or order, it 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.
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 Children’s Law Reform Act.
Amounts over $10,000
Under Ontario’s Children’s Law Reform Act, if an adult person does not have the legal authority to receive monies or assets of a minor valued at $10,000 or more, the assets may have to be transferred to 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 majority or 18.
The Insurance Act, for example, requires insurers to pay the Accountant of the Superior Court of Justice directly when issuing cheques under a policy. Similarly, the Trustee Act requires executors, administrators and trustees of a will to pay the money to the Court, even if the trust official is a parent.
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.”
A parent or caregiver may also make a formal application to the Court for a guardianship order authorizing him or her to manage the child’s property. This order is issued under the Children’s Law Reform Act.
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 Children’s Law Reform 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.
If you require legal advice, contact a lawyer.
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