Tag: Minor Beneficiaries

31 Mar

If You Have Children, What Should be Included in a Will?

Ian Hull Estate Planning Tags: , , , 0 Comments

A person’s Last Will and Testament allows them to not only determine how their estate is distributed upon their death, but can also set out their expectations on how to care for their minor-aged children. To ensure that the needs of the child can be met, here are some of the elements that should be part of this important document.

One key issue is to decide who to appoint as guardian – the person who will assume the responsibility of raising the children upon the death of their parents. A person entitled to custody of a child may appoint one or more persons to fill that role after the death of the parent, as per section 61 of the Children’s Law Reform Act. It’s also possible to choose a different guardian for each child if that works in a particular situation.

Keep in mind that such an appointment is typically only in force for 90 days, during which time the custodian must bring a court application seeking permanent status. The testator’s appointment can be overturned by a judge, however, especially if circumstances have changed between the writing of the will and the guardianship appointment being made. Perhaps your appointed guardian is having personal struggles of their own and is no longer fit to care for your children. In most cases, though, the court will typically respect the choice of the testator and assign great weight to their final wishes.

When it comes to minor-age children, an equally important designation is the appointment of a trustee. This can be the same person as the guardian, though it doesn’t have to be. A trustee makes decisions about how your assets are managed and when funds are allocated to your children. For example, parents may decide it would not be in their children’s best interests to receive a large inheritance at the age of 18. Those funds can be controlled by the trustee until the children reach a higher level of maturity.

When parents prepare their wills, they do not know what the future needs of their children will be. Maybe a child will be injured and will require therapy not covered by provincial health plans, for example, or they could develop a keen interest in music or some other pursuit requiring expensive equipment.

These needs could be paid for by the trust if the trustee is convinced they are in the best interests of the child. The trustee can also release funds for the general maintenance of the child, with all withdrawals recorded for later reference.

Specialized trusts can be established for a number of different scenarios. For example, the Henson Trust is used in estate planning where there is a disabled beneficiary who is entitled to receive support payments from the Ontario Disability Support Program (ODSP).

Under the Ontario Disability Support Program Act, if a recipient of ODSP has assets or receives income over a prescribed limit, they will be ineligible to receive support payments. One way to address this issue is through the establishment of the Henson Trust.

Those in a second marriage or any sort of blended family definitely need a will. There needs to be direction on who inherits what. Court challenges are sure to arise if the direction is unclear or if it is seen as patently unfair to one party.

That is reinforced by a TD Wealth survey that found that family conflict was identified as the leading threat to estate planning. The survey cited the designation of beneficiaries (30 percent) as the most common cause of conflict, with other leading factors including not communicating the plan with family members (25 percent) and working with blended families (21 percent).

Some parents may want to include information about their parenting philosophy or provide advice about how to handle their children in the will. A Last Will and Testament is not the place for that. This is a legal document that contains specific instructions about the distribution of your estate. After your will is probated, it becomes a public document that anybody can read. However, instructions or encouragement about parenting can be included in a letter or other separate document that accompanies the will.

A will is the last gift you will give your children, so you’ll want to work with a lawyer to make sure it leaves the legacy you intended.

Thanks for reading ­– and be safe.

Ian Hull

12 Jul

How to Pay Money Into Court

Stuart Clark Estate & Trust Tags: , , , , , , 0 Comments

Suzana Popovic-Montag blogged last week about the ability of an Estate Trustee to pay funds into court for the benefit of a minor beneficiary in accordance with section 36(6) of the Trustee Act. While the blog provides an excellent summary of the statutory authority for the payment of the funds into court, and of the release from liability of the trustee as it relates to the funds paid into court, one question remains: how do you actually go about paying the funds “into court”?

In Ontario, funds that are “paid into court” are payable to the Accountant of the Superior Court of Justice, a branch of the Ministry of the Attorney General. In Toronto, the Accountant of the Superior Court of Justice’s offices are presently located at 595 Bay Street, 8th Floor.

In the case of funds paid into court for a minor beneficiary in accordance with section 36(6) of the Trustee Act, section 36(6.2) of the Trustee Act provides that the person paying the funds into court (i.e. the Estate Trustee) is to deliver to the Accountant of the Superior Court of Justice an affidavit containing the following:

  • A statement that the money is being paid into court under subsection 36(6);VVXW9WBTB8
  • A statement of the facts entitling the minor to the money;
  • If the amount being paid into court differs from an amount specified in a document that establishes the minor’s entitlement, an explanation of the difference;
  • The minor’s date of birth;
  • The full name and postal address of:
    1. The minor;
    2. The minor’s parents, or the parent with lawful custody if it is known that only one parent has lawful custody;
    3. Any person, if known, who has lawful custody of the minor but is not his or her parent; and
    4. any guardian of property, if known, appointed under section 47 of the Children’s Law Reform Act.

In the event that the funds being paid into court are payable in association with a document (i.e. a Will or a trust), a copy of such a document should be attached as an exhibit to the affidavit in accordance with section 36(6.4) of the Trustee Act.

In summary, in order to pay funds into court in accordance with section 36(6) of the Trustee Act, you should attend at the offices of the Accountant of the Superior Court of Justice with an affidavit containing the information required by section 36(6.2) of the Trustee Act, together with a cheque in the requisite amount. Should the Accountant of the Superior Court of Justice accept the funds to be paid into court, the trustee would enjoy the discharge from liability concerning such funds as contemplated by section 36(6.5) of the Trustee Act.

Thank you for reading.

Stuart Clark

06 Jul

Paying Money Into Court – Minor Beneficiaries

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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