Guardianship of Property of Minor Children
Information Brochure prepared by
Office of the Children's Lawyer
393 University Avenue, 14 th Floor
Toronto, ON M5G 1W9
Tel. (416) 314-8000
Fax (416) 314-8050
This brochure is not intended as a substitute for legal advice from your lawyer. It has been prepared to assist parents, caregivers of children and members of the legal profession. This brochure describes guardianship of property of minor children in Ontario only; each province of Canada has its own laws about children's property.
In its legal sense, "guardian" refers to
1. a "guardian of the person" (described as "custody" in Ontario legislation) or to
2. a "guardian of property" (responsible for managing the child's assets).
A child who is under the age of 18 years is called a minor.
In Ontario, a parent is automatically the "guardian of the person" of his or her minor child. However, a parent is not automatically the "guardian of property" of his or her minor child's property. A parent can only receive such authority on behalf of a child by statute, court order or other document, such as a will.
Money may be payable to a child
- under a court order for damages;
- in an estate (with or without a will);
- under a life insurance policy where the child has been named as the beneficiary;
- under an RRSP or other pension plan;
- under some other death or accident benefit.
Where an adult person does not have the legal authority to receive the monies for the minor, the monies must be paid into court by paying the monies to the Accountant of the Superior Court of Justice.
Payments into Court to Accountant of the Superior Court of Justice
595 Bay Street, Suite 800,
Toronto, ON M5G 2N3
Tel. (416) 314-2477,
Fax (416) 314-2481
A child's money may be paid into court by filing an affidavit under
- section 220 or 271 of the Insurance Act for insurance money. It is the obligation of the insurer to file the Affidavit and pay the money into court to the Accountant;
- section 36(6) of the Trustee Act in the case of an estate or trust. It is the obligation of the executor, administrator, or trustee to file the Affidavit and pay the money into court to the Accountant.
An affidavit is a legal document that is sworn or attested to be true. The money is held by the Accountant of the Superior Court of Justice.
Benefits of Monies in Court
The following are some of the benefits of paying the child's money into court:
- Currently, minors' funds deposited with the Accountant earn interest calculated daily and compounded monthly. The rate is subject to change and fluctuates with market conditions. Depending on a number of factors, a portion of the funds may be invested in a Diversified Trust Fund, which consists of a diversified portfolio of domestic and foreign equities and fixed income securities designed to generate capital gains and a stable income yield.
- There is no need for a court application for a guardianship order and the associated legal costs.
- There is no need to post a bond, keep accounts or decide what are proper investments.
- The child may obtain his/her funds and interest on reaching the age of 18 years (or at a later age if the will, order or other document says so).
- If any funds are required for the direct benefit of the child before the age of 18 years, the Office of the Children's Lawyer (OCL) has an informal procedure for parents or caregivers to request payments out of court for the direct benefit of the child when the parent/caregiver cannot afford the expense. The parent/caregiver may write directly to the OCL. In nearly all such requests, the Children's Lawyer attends before a Judge for a decision about whether the Judge will order that the money requested will be paid out of court to the parent/caregiver. Alternatively, the parent/ caregiver may apply formally to the court on notice to the OCL (see Rule 72 of the Rules of Civil Procedure).
Fees charged by the Accountant
As of May 1, 2000, the Accountant of the Superior Court of Justice charges fees. No fee is charged upon payment of money into court for a minor. A fee of 3% is charged on investment income credited to the minor's account and on all payments out of court. In addition a care and management fee is charged.
Exceptions to Payments into Court
1. If the amount of money or the value of property does not exceed $10,000 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 who has lawful custody of the child; or
- the child, if the child has a legal obligation to support another person.
The person receiving the money or property on behalf of the child has the same responsibility as a guardian of property for its care and management (section 51 of the Children's Law Reform Act ( CLRA)).
2. Alternatively, an application may be made to Court for a guardianship order which authorizes the guardian to manage the child's property. The Court makes the guardianship order under section 47 of the CLRA.
Guardianship of Property
Who may bring a guardianship application? A parent or any other person may do so. Subject to court order or agreement, parents of a child are equally entitled to be appointed as guardians; parents are preferred over non-parents. More than one guardian may be appointed and multiple guardians are jointly responsible (section 48 CLRA). Where the amount of money is large, the court may require a trust company or other independent professional to act as guardian.
Which Court can make a guardianship order? The Superior Court of Justice and the Ontario Court of Justice have jurisdiction to make guardianship orders for minors' property (section 18(1) CLRA).
What are the responsibilities of a guardian of property? A guardian of property is responsible for the care and management of the minor's property (section 47(2) CLRA). The guardian is required to
- keep careful records (called "accounts") of all dealings with the child's money;
- make proper trustee investments and invest the child's money as required by the management plan approved by the court (guardians must comply with the Trustee Act requirements for the investment of trust funds.)
- transfer all the property to the child at age 18 (section 53 CLRA). If the child has a legal obligation to support another person, the court will terminate the guardianship on the child's application (section 56 CLRA).
What factors does the court consider? The court considers all the circumstances, including the ability of the applicant to manage the property, the merits of the proposed management plan for the investment of the child's funds, and the views and preferences of the child where they can be reasonably ascertained (section 49 CLRA).
Is a bond required? The court shall require the guardian to post a bond, but the court may dispense with a bond where the applicant is a parent of the child (section 55 CLRA). Usually, the court will not dispense with a bond where the applicant does not have assets in excess of the amount of the child's funds.
Who represents the interests of the minor child? The OCL is required to be served with a guardianship application to represent the interests of the minor (section 47 CLRA).
Things to keep in mind:
- The guardianship order should include the management plan for the child's money or property so that the guardian has clear directions for managing the money.
- The guardian is required to keep careful records of all investments, receipts and disbursements of the child's funds to account to the court as required and to the child when he/she reaches the age of 18 years.
- Where a large amount of money is involved, the guardianship order may require the guardian to regularly pass the accounts before the court at fixed intervals. The interval may range, usually from one to five years.
- Where the guardianship order does not expressly allow the guardian to spend the child's money, the guardian only has the authority to hold and invest the money until the child reaches the age of 18 years.
- The guardian should not use the child's money to pay a lawyer for a court guardianship application unless the guardianship order authorizes it.
- The child's money cannot be used for the financial support of the child. Parents have a legal obligation to support their children. Guardians are not entitled to use the child's funds to provide for support for the child unless the guardianship order authorizes it.