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"Minor" Inheritance Consideration
Adam Kowalsky
Adam Kowalsky
Adam Kowalsky
Adam was born and raised in Simcoe. He received his Honours B.A. from the University of Western Ontario and his J.D. from the University of Toronto in 2009.

March 2012-When someone dies and money or other property is left to a person under 18, a minor, there are a few considerations.
A minor cannot receive the inheritance directly until 18. Parents cannot receive or manage the inheritance on behalf of their minor child either unless the parent is (i) the executor under the will by which the minor receives the inheritance; or (ii) guardian of the minor's property by court appointment.
Another issue is control of the inheritance until the beneficiary turns 18. Where there is a will, the executor is obligated to manage and invest the inheritance pursuant to the Trustees Act and any terms of the will. The executor remains liable; the management during minority, including payments made from the inheritance, can be challenged by the minor at 18 or others.
Accordingly, the terms of the will are critical because they set out how to deal with the inheritance during minority -including how and to whom payments may be made. Payments during minority can be useful (e.g., tuition, travel, health, etc.) and, in the case of a deceased parent, access and needs maybe particularly pressing.
On turning 18, here"s another concern: an 18 year old receiving sizeable money or other property. Just because the beneficiary is no longer a minor, we still may not be confident in how he or she manages their inheritance (heck, they could blow it on law school!).
Again, the terms of the will are useful. Directions for staged distributions are common: e.g., a portion of either or both income or capital at 18 and the balance at 25 or later. It may be prudent to give the executor discretion to provide additional payments should the need arise.
Of course, minors can inherit other than by a will. Similar considerations therefore apply to minors as beneficiaries under insurance polices. Policy owners may designate someone to receive the proceeds in trust for the minor and that person would be under similar obligations (and liabilities) as the executor, above. However, without direction, that person may be reluctant to or less effective in managing the proceeds.
One solution is a trust declaration, a document that sets out terms - similar to those in a will - for managing the insurance proceeds during minority. Like the will, the declaration may also go beyond 18, establishing installments or other distribution mechanisms.
Minor considerations in your estate plan may be far from minor. The scope of discussion with your legal and financial advisors will be defined by your circumstances including the potential for minor beneficiaries and the size of any inheritance.

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