Estate Planning for Minor Children

Thinking about the future comes with the territory of being a parent, especially when it comes to protecting your children. One of the key reasons I created my own Will was to make sure that if something happened to me, my children would be cared for, both emotionally and financially.

When a child inherits from a parent’s estate, the process is not as simple as passing along assets. Minors cannot legally manage property or funds on their own. Without proper planning, even a well-meaning gift can result in court delays, unintended outcomes, or young adults receiving large sums of money long before they are ready.

In Ontario, your Will allows you to name an interim guardian for your children. However, this arrangement is only in place for a period of ninety days they must apply to the courts to legally be named the guardian if there is no surviving parent with custody. While the court must confirm your choice, your nomination will be taken seriously. Without your direction in a Will, the court must decide who steps in, which may not align with your preferences.

The Office of the Public Guardian and Trustee plays a significant role in estates where minors inherit. If you do not have a Will and a child under the age of eighteen becomes entitled to a share of the estate, that child’s inheritance will be held by the Accountant of the Superior Court of Justice, under the oversight of the Public Guardian and Trustee, until the child turns eighteen. At that point, the entire amount will be paid out to them in full, with no conditions or ongoing management.

While eighteen is the legal age of majority in Ontario, most parents are not comfortable with the idea of an eighteen-year-old suddenly having access to significant funds, especially without any oversight or guidance.

Using Trusts to Protect Young Beneficiaries

One of the most effective ways to plan for a minor beneficiary is by including a testamentary trust in your Will. This allows you to control how and when the child receives their inheritance, rather than giving them full access at eighteen you can delay until a more appropriate age, such as twenty-five. Some parents choose staggered distributions, releasing a portion at one age and the rest in intervals. While funds remain in the trust, they can still be used to support the child. The trustee has the authority to pay for education, housing, health expenses, and other reasonable needs.

Testamentary trusts can also protect the inheritance from outside risks. For example, if a young adult later experiences financial difficulties or goes through a divorce, trust funds may be better shielded than an outright inheritance. These protections are one reason trusts are often recommended, even when the estate is modest.

If you include a trust in your Will, you’ll need to appoint a trustee to manage the funds. The trustee is responsible for administering the trust according to your instructions. This includes investing the assets, approving distributions for the child’s needs, and ultimately releasing the funds at the appropriate time. Some parents choose a trusted family member who knows the child well. Others prefer a professional trustee, such as an estate lawyer, to ensure impartiality and experience. You can also name co-trustees to balance personal insight with financial expertise.

You may wish to provide the trustee with a letter of wishes. While not legally binding, it’s a helpful way to express your values, for example, encouraging support for education or travel, or offering guidance on how generously the funds should be used. Creating a trust doesn’t mean locking away funds until the child reaches a certain age. Trustees can use the assets to support the child’s day-to-day expenses, extracurriculars, travel, and other reasonable needs. You can even tie distributions to certain achievements, such as graduation, a milestone birthday, or starting a business. Others prefer to leave distribution decisions to the trustee’s discretion, allowing them to respond to the child’s needs over time.

If your child is receiving or may one day receive government disability benefits, such as Ontario’s ODSP, a Henson Trust should be considered. A properly structured Henson Trust allows you to leave assets for their benefit without disqualifying them from essential support programs. These trusts give the trustee full discretion over how and when to distribute funds, which helps protect eligibility for income-tested benefits. Read my recent blog on Henson Trusts for more details.

Many parents also name their children as beneficiaries of TFSA/ RRSP/ RRIF and life insurance policies. If the children are under eighteen and there is no trust in place, there can be vast complications for the child to inherit significant amounts of money. The proceeds may need to be held by the court, similar to a minor's inheritance under a Will. To avoid this, you can name your estate as the beneficiary and use your Will to direct the proceeds into a testamentary trust to ensure the funds are managed on your terms, not the court’s.

As a parent, it's second nature to think ahead, to pack the snacks, to double-check the seatbelt, to imagine what life might look like five or ten years from now. Estate planning for your children is just another way of looking out for them, even when you’re no longer able to do so yourself.

By putting thoughtful plans in place, you’re doing more than protecting assets. You’re creating stability, preserving opportunity, and expressing your values in a lasting way. Whether it’s naming the right people, setting clear instructions, or building in flexibility for the unknown, your choices today can offer reassurance in the future.

If you’d like guidance on estate planning for minor children, I'd be happy to help. Together, we can build something that truly supports them, not just financially, but meaningfully.

This article is intended for informational purposes only. For personalized advice tailored to your specific circumstance, please reach out to the E is for Estates team.

Erin L. Watson, B.A., JD

Lawyer & Notary Public

E is for Estates