Paying Money Into Court – Minor Beneficiaries

July 6, 2016 Suzana Popovic-Montag Estate & Trust Tags: , , , , , 0 Comments

You are an Estate Trustee of an estate which leaves an interest to a beneficiary who is presently under 18 years of age. Knowing that as the amount in question is in excess of $10,000.00 that it cannot be paid to the child’s parent on their behalf in accordance with section 51(1.1) of the Children’s Law Reform Act, and not wanting to delay the administration of the estate until the child has turned 18 years of age, you begin to inquire about what options may be available to you. The possible solution? Paying the funds into court for the benefit of the minor beneficiary.

Section 36(6) of the Trustee Act provides an Estate Trustee with the authority to pay any funds which they holding on behalf of a minor beneficiary into court for the benefit of the minor beneficiary, providing:

CAOZMVK4X6“If a minor or mentally incapable person is entitled to any money, the person by whom the money is payable may pay it into court to the credit of the minor or mentally incapable person.”

Should the Estate Trustee pay any funds into court for the benefit of a minor beneficiary, they are discharged concerning such funds in accordance with 36(6.5) of the Trustee Act, which provides:

“Payment into court in accordance with subsection (6), (6.2) or (6.3), as the case may be, and with subsection (6.4) is a sufficient discharge for the money paid into court.”

While the Estate Trustee is discharged from liability as it relates to the funds which are paid into court, this does not necessarily mean that paying funds into court is a sufficient release for the Estate Trustee concerning the administration of the estate as it relates to the minor beneficiary, as the Estate Trustee may still be required to justify how any amount paid into court was arrived at. If the minor beneficiary is entitled to the payment of an amount which is not fixed (i.e. a percentage of the residue), the Estate Trustee will still need to justify how any amount paid into court was arrived at, likely on an Application to Pass Accounts. Presuming that the beneficiary is still a minor when such an Application to Pass Accounts is commenced, the Application will likely be required to be served on the Office of the Children’s Lawyer on behalf of the minor beneficiary.

Thank you for reading.

Suzana Popovic-Montag

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