Guardianship of a child’s money and property
Learn how to apply to be a guardian of a child’s money or property.
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A child’s parent or caregiver is not automatically entitled to receive and manage their child’s money when the child (under the age of 18) is to receive money from:
- an estate
- a life insurance policy
- a court order for damages in a personal injury or other civil case
- other source
Generally, the child’s money is paid into court by depositing the money with the Accountant of the Superior Court of Justice (ASCJ). The ASCJ will hold and invest the money for the child and pay it to the child when they reach the required age (usually 18). For more information about paying money to the court through the ASCJ.
If you are a parent or caregiver of a child with money that has been paid into court, and you cannot afford an expense for the direct benefit of the child, you can request money from the child’s ASCJ account. You must submit a written request to the Office of the Children’s Lawyer under the Minors’ Funds Program.
In most cases, if the total amount of money a child is to receive is $35,000 or less, the money does not need to be paid into court. The Children’s Law Reform Act allows the money to be paid to:
- a parent, if the child resides with the parent
- a person who has lawful custody of the child
- the child, if the child has a legal obligation to support another person
If the total amount of money owing to a child is over $35,000 and you do not want to have the money paid into court, a child’s money can be received by a court appointed guardian of property.
Guardianship of a minor’s money or property
A guardian of property is appointed by the court to receive and manage a child’s property. A parent, caregiver or other person can only receive this authority by court order.
It is often better to allow money to be paid into court through the ASCJ rather than applying for guardianship of property, especially where the amount of money at issue is small or the child will be 18 soon. Payment into court avoids the expense and effort of:
- applying to court for guardianship
- posting a bond and getting a court order to release the bond at the end of the guardianship
- maintaining accounts (details of investments, receipts and disbursements) and having to provide the OCL with your guardianship accounts
- passing accounts if needed (another formal application to court)
More importantly, payment into court ensures that payments are not made from the child’s money without legal authority.
How to apply to be a guardian of property
A parent or any other person may apply to be appointed guardian of a child’s property. Appointing a parent is preferred over a non-parent. Parents of a child are equally entitled to be appointed as guardians of property, subject to a court order or agreement.
More than one guardian of property may be appointed, and if that is the case, they would be jointly responsible. Where the amount of money is substantial, the court may require a trust company to act as guardian of property.
The court considers all the circumstances, including:
- the applicant’s ability to manage the property
- the merits of the proposed management plan for the investment and management of the child's money
- the views and preferences of the child, where they can be reasonably ascertained
Guardians of property are required to post a bond, though the court may dispense with a bond (allow someone to act as guardian without a bond), where the applicant is a parent of the child. Usually, the court will not dispense with a bond where the applicant does not have assets in excess of the amount of the child's funds.
You must serve a guardianship of property application on the Office of the Children’s Lawyer to represent the interests of the minor.
The management plan is an important part of a guardianship of property application. It outlines:
- the property the applicant would like to manage
- how the applicant will manage the property
The plan must explain the nature and value (dollar amount) of the child’s property. The plan must also include:
- the proposed investment (including a breakdown of cash, equities and fixed income, and particulars of any costs such as commissions or fees, etc., to be paid on the investments)
- the risks involved with the proposed investments
- the anticipated rate of return from the proposed investments
There are different requirements for a management plan for the appointment of a guardian of property in a child’s personal injury case.
Using the child’s money
If you need to spend any of the child’s money, your affidavit (a sworn legal statement) should explain what you want to spend and why. The management plan must also include the expenses you will pay from the child’s funds. The expenses must be necessary or proper for the support or education of the child or substantially benefit the child.
When reviewing the expenses, the court will consider that a parent has an obligation to support the child and if a parent wants to use a child’s property for that support, the parent will need to show a financial need.
Changing the management plan
If the child’s circumstances change and the guardian of property would like to invest or use the child’s money in a way that is not authorized in the plan approved by the court, then the guardian of property must bring a motion to amend the management plan (a Notice of Motion form). The Notice of Motion must be served on to the Office of the Children’s Lawyer. Personal service is not necessary, the Notice can be sent by email. Only the court has the power to approve amendments to a management plan.
Responsibilities of a Guardian of Property
If you are appointed as a guardian of property, you will receive a guardianship order with an approved management plan which will provide you with clear directions for managing the child's money or property.
If you are appointed as a guardian of a child’s property, you must:
- keep careful records (called "accounts") of all dealings (investments, receipts and disbursements) with the child's money
- invest the child's money as provided by the management plan approved by the court (guardians must comply with the Trustee Act requirements for the investment of trust funds)
- transfer all the property to the child at age 18. If the child has a legal obligation to support another person, the court will terminate the guardianship on the child's application
You can not use the child's money for any purpose not authorized by the order, including:
- as financial support for the child
- to pay a lawyer for legal fees relating to the court guardianship application
The guardianship of property order may require you to provide periodic accounts of your care and management of the child’s property to the OCL. Where a large amount of money is involved, the order may require you to regularly bring an application to the court to pass your accounts, at fixed intervals ranging from one to three years.
A guardian of property must keep complete and accurate accounts of the guardianship assets. The accounts need to include all the information required by Rule 74.16 of the Rules of Civil Procedure.
Keep copies of all investment and bank statements. If the management plan authorizes the funds to be used for any purpose, keep a copy of any invoices, bills and cancelled cheques showing how the funds were used on the child’s behalf.
Application to pass accounts
Some guardianship orders require that the guardian bring an Application to Pass Accounts (form 74.44) at certain intervals. An Application to Pass Accounts (Rule 74.16 -18 of the Rules of Civil Procedure) is a formal court proceeding through which a guardian obtains the court’s approval of the accounts. The applicant must serve, the application on the Office of the Children’s Lawyer on behalf of the child. For more information on serving the Office of the Children’s Lawyer.
Providing draft accounts
Your guardianship order may require you, as the guardian, to provide the Office of the Children’s Lawyer with draft accounts at certain intervals. Draft accounts are prepared in the same way as formal accounts but are not sworn by the guardian and do not need to be passed before the court. Providing a draft accounting to the Office of the Children’s Lawyer may be an option if the guardianship property is of modest value or where the accounting is simple. If there are issues in a draft accounting that cannot be resolved between the Office of the Children’s Lawyer and the guardian(s), a formal application to the court to pass accounts may be needed.
How to stop being a guardian of a child’s money or property
If you are no longer able or willing to manage a child’s money, you can deal with this in several different ways. A lawyer is in the best position to discuss these options with you.
With the permission of the court, you may resign as guardian of property and either pay the money into court to the Accountant of the Superior Court of Justice or you can ask the court to appoint someone else as guardian of property to replace you. Obtaining the permission of the court requires a formal court process which must be served on the Office of the Children’s Lawyer.