Show me the Money!!
Show me the Money!!
Popular gossip magazines and entertainment shows track the steps and missteps of high-paid young stars and entertainers like our own Canadian-grown Justin Bieber. While few of us will ever have minor-aged children who earn megabucks in the entertainment industry, most of us could face a situation where our children receive money or property before they turn 18. For example, a child may inherit money from grandparents, or may be entitled to receive accident benefits or the proceeds of an insurance policy for which the he or she is the beneficiary.
So who manages the money?
Parents often assume – quite incorrectly – that they are automatically entitled to have control over any funds that their under-aged child might be entitled to. This is simply not the case. Nor is it correct to assume that the child always gets the money directly.
Rather, under an Ontario law called the Children’s Law Reform Act, a child is only entitled to receive the money directly into his or her hands if the amount is under $10,000 and the child has a legal obligation to support another person. Funds under that dollar-figure can also be paid to a parent or person with lawful custody.
Otherwise, if the amount that the child is receiving or inheriting is over $10,000, then the money is “paid into court” to the Accountant of the Ontario Superior Court of Justice, who takes legal control of it in trust for the child, and holds it for the child’s benefit until he or she turns 18.
However, the law allows for one or both of the child’s parents to apply to the court to be appointed as “guardian” of the money, and become responsible for its management. (And the Office of the Children’s Lawyer must get notice of these kinds of applications). In deciding whether to grant this kind of appointment, the court must take into account various factors including:
• The guardian’s ability to manage the child’s property;
• The merits of the guardian’s proposed plan for the management and care of the child’s property; and
• The child’s views and preferences.
A parent appointed as guardian has a legal obligation to account for every transaction that involves the child’s funds, and must undertake meticulous record-keeping. He or she is also entitled to be paid compensation in a specific court-ordered amount, in return for those money-management duties.
If you are in a situation where you are considering applying to be appointed legal guardian over the money or property belonging to your child, we can help explain your rights and obligations.
At Russell Alexander, Family Lawyers our focus is exclusively family law, offering pre-separation legal advice and assisting clients with all family related issues including: custody and access, separation agreements, child and spousal support, division of family property, paternity disputes, and enforcement of court orders. For more information, visit us at www.RussellAlexander.com.