The term "intestate" refers to someone who dies without leaving a valid Will. In such cases, the distribution of the deceased's estate is governed by law, rather than the deceased's wishes. In Ontario, several Acts, such as the Estates Act, the Trustee Act, and the Succession Law Reform Act, outline the procedures for administering an intestate estate. This post will specifically address how a minor's inheritance is managed when someone dies intestate.
If a minor is set to inherit from an intestate estate, their share cannot be directly handed over to them. Instead, the following rules apply:
For Inheritances Under $35,000: The funds can be paid directly to the minor's parent or guardian.
For Inheritances Over $35,000: The funds must be paid into court and managed by the Accountant of the Superior Court of Justice. These funds will be invested for the minor's benefit, with any income earned credited to the minor’s account. However, there are fees for managing these funds: typically, 3% of each monthly receipt and disbursement, plus an additional 0.6% of the average annual value as a care and management fee. The funds will be released to the minor when they turn 18. During this time, if the minor needs money, the parent or guardian must apply to the court for an advance. This process can be lengthy, costly, and burdensome.
Alternatively, a person can apply to the court to become the guardian of the minor’s property. Once appointed, the guardian can manage the minor's share of the estate. However, the appointment process can also be complex and demanding. This guardianship lasts until the minor reaches 18.
In summary, dying intestate with minor beneficiaries can lead to significant complications. Proper estate planning, including having a valid Will, is essential to ensure that minor beneficiaries are cared for in the best possible way.
Disclaimer
The information in this post is provided for general informational purposes only and may not reflect the current law in your jurisdiction. No information contained in this post should be construed as legal advice from our firm or the individual author, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through, this post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country or other appropriate licensing jurisdiction.