Care should always be taken in making bequests in your Will to a child. In Ontario, a child is a person who is under the age of eighteen years.
If a Will states that a child will receive a cash bequest on the death of a testator, the Children’s Law Reform Act of Ontario provides that if the bequest is $10,000 or less, the estate trustees may pay the bequest to the parent or guardian of the child. However, if the bequest is over $10,000, the balance of the bequest over $10,000 must be paid into the Ontario Superior Court by the estate trustees. The Ontario Court will then hold the bequest until the child reaches eighteen years of age, when the bequest and the income earned on same will be paid to the, now adult, child.
While there is a procedure whereby the child’s parent or guardian can access the amount paid into Court before the child reaches eighteen years of age, the process is cumbersome and difficult.
A much better alternative would be to have the testator’s Will state that the bequest to the child shall be held by the estate trustees in trust and shall be used for the benefit of the child until the child reaches eighteen years, or some later age specified by the testator. This will allow the estate trustees to provide the maximum benefit for the child while the child is growing up, rather than simply giving a lump sum to the child when he/she reaches eighteen years of age.
Make sure to review your Will and ask those who plan to leave a bequest to your children to ensure that the bequest is held in trust by the testator’s estate trustees. This will avoid the risk that the bequest be sidetracked into the Superior Court.
If you have any questions about bequests in your Will, feel free to contact our Wills and Estates group.