Tag: Minor Beneficiary
There have recently been many proposed changes to estate laws in Ontario under the Accelerating Access to Justice Act, 2021. The Bill passed Second Reading on March 2, 2021, and was referred to a Standing Committee.
We have blogged on many of these proposed changes. See “Modernizing the Succession Law Reform Act”, and “Ontario Raises Small Estate Limit to $150,000 – Now What?”.
One of the proposed changes is an increase in the amount of money that can be paid to a parent of a child when money is owed to the child.
As a starting point, it must be kept in mind that a parent of a minor is not the guardian of the child’s property unless specifically appointed as such by the court. A parent is not authorized to deal with a child’s property.
However, if a person is under a duty to pay money or deliver personal property to a minor (such as an Estate Trustee where there is a bequest to the minor), the person may pay the amount owing or deliver the property to a parent with whom the child resides, per s. 51(1) of the Children’s Law Reform Act (“CLRA”). However, s. 51(1.1) of the CLRA presently limits the amount payable to the parent to $10,000. If the amount payable is more than $10,000, other steps will have to be taken, such as the appointment of a guardian for the child, or the payment of the funds into court.
Under the proposed revisions to the CLRA and its regulations, this amount is to be increased to $35,000. Further, the provision will specifically apply to money payable under a judgment or court order or on an intestacy. Currently, amounts payable under a judgment or court order were specifically excluded.
Under the CLRA, a parent who receives funds on behalf of a minor has all of the responsibilities of a guardian for the care and management of the money or property. The parent may be required to account, and must transfer the money or property to the minor when they turn 18.
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Earlier this week I blogged about the process of how 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 a summary of the steps required to pay such funds into court, presuming that the Accountant of the Superior Court of Justice should accept such funds to be paid into court, one question remains. How does the beneficiary go about having such funds “paid out” of court upon turning 18 years of age?
The process of having funds “paid out” of court is established by rule 72.03 of the Rules of Civil Procedure. In accordance with rule 72.03(7), money which has been paid into court for the benefit of a minor individual which is to be paid out upon such an individual reaching the age of majority (i.e. 18 years of age) is to be paid out to such an individual upon filing the following with the Accountant of the Superior Court of Justice:
- a written request for payment out; and
- an affidavit proving the identity of the party and that the party has attained the age of majority.
As confirmed by Sanders v. Gouthro, presuming that there is no Order to the contrary, no further court Order is required for such funds to be paid out of court, and the Accountant of the Superior Court of Justice is to pay the funds to the individual upon the filing of the appropriate materials.
In summary, should funds have been paid into court for the benefit of a minor beneficiary in accordance with section 36(6) of the Trustee Act, upon such a beneficiary turning 18 years of age they should file a written request, together with an affidavit proving their identity and age, with the Accountant of the Superior Court of Justice. The Accountant of the Superior Court of Justice should then pay out such funds, together with any interest, to the beneficiary.
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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:
“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.
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