Who is considered a minor
In Alberta, a minor is someone under the age of 18.
A minor’s trust may continue beyond the age of 18, depending on the wording of a:
- court order
- settlement document
How a minor may receive assets
A minor could receive assets, such as cash or property, from many different sources. Some examples are a:
- personal injury settlement
- life insurance policy
- Victims of Crime compensation settlement
- Worker's Compensation claim
- testamentary document, such as a will
- relative's estate, where the relative has died without a will
- fatal accident settlement
- pension plan
- Registered Retirement Savings Plan (RRSP)
- Tax Free Savings Account
What happens when a minor is awarded assets
The wording of a will, court order or settlement document might state who is to be the trustee for the funds or property. If it does not, then the funds or property must be held by the Public Trustee – with some exceptions.
Amounts payable to a minor under the Victims of Crime and Public Safety Act section 70(9) of the Workers' Compensation Act must be paid to the Public Trustee, even if the amount is under $25,000.
A parent or guardian may apply to the court to be a minor’s trustee if:
- a trustee has not been named
- the Public Trustee is not required to be the trustee
A bond is usually required for them to do this.
Minor awarded under $25,000 with no named trustee
If a minor is owed under $25,000 and a trustee has not been named, the holder of the funds may choose to provide the funds to either the:
- Public Trustee
- parent or guardian
Parents and guardians may request to manage the funds for the minor if there is no named trustee.
The organization or person transferring the funds must have the parent or guardian sign a Guardian’s Acknowledgement of Responsibility Form. This acknowledges they are responsible for managing the funds in the ‘best interest of the minor’ – and means they must put the child’s needs first.
How to become the trustee of a minor's property
If you want to be the trustee of the minor’s property, you should:
- make sure you understand the duties and responsibilities
- get a lawyer’s help with filing the court application
- serve the Public Trustee with the notice of application for trusteeship of the minor’s property
OPGT cannot provide legal advice. For information about a trust not held by the Public Trustee, contact a lawyer. If you do not have a lawyer, contact the Law Society of Alberta’s Lawyer Referral Service.
If you are appointed, you will:
- manage the minor's assets
- provide a financial report to the minor when they come of age
When the Public Trustee receives property including funds
The Public Trustee receives the money and:
- invests it in the Public Trustee's Common Fund
- guarantees the money 100% – the minor’s money is protected
The Public Trustee's Common Fund interest rate is set in accordance with the Public Trustee Act and is:
- compounded daily
- paid monthly to the minor's trust account
Parent or guardian involvement
The Public Trustee is responsible for managing the minor’s assets. Depending on the details of the document, the parent or guardian may assist by discussing with the Public Trustee how the funds should be used.
- if the minor has been injured, the money may be necessary for therapy
- if the minor's parents have died, the guardian may need help with day-to-day living expenses
Each trust earns interest income. All income is reported by the Public Trustee to the Canada Revenue Agency through annual T-3 Information slips.
The minor's parent or guardian:
- receives copies of the T-3 slips every year
- should get advice from a tax specialist
- decides whether a tax return should be filed on behalf of the minor
- should contact the Public Trustee and provide a copy of the minor’s tax return if one was filed
Income tax owed because of interest earned by the minor's trust may be paid from the minor's trust account.
How trust money is paid out
The trust money is payable once a person turns:
- 18, or
- the age specified in the trust document – which cannot be changed by the Public Trustee
Shortly before this, the Public Trustee gets in touch with the minor or their trustee to explain the process:
- provide accounting to the former minor to review
- ask the former minor to sign a Release form – if they agree with the accounting
- deliver the remaining funds to the former minor or their trustee
If a person cannot manage their money
It is assumed that everyone age 18 and over has capacity to make their own decisions.
If someone does not have the capacity to make their own decisions when they reach 18, a capacity assessment should be completed.
Just because someone disagrees with an adult’s decisions doesn’t mean they’ve lost the ability to make their own decisions. If they fully understand the impact of a decision, they’re probably capable of making it.
An adult who does not have the capacity to make decisions needs someone to make decisions for them. A court order is needed for someone to help the adult by acting as:
- an adult guardian for their personal decisions
- an adult trustee for their financial decisions
- both the guardian and trustee for all their decisions
Lawyers and accountants
The costs of agents the Public Trustee may hire, such as lawyers and accountants, are charged to the minor’s account.
The Public Trustee charges the following fees, which may change without notice, to manage the assets of a minor:
Table 1. Initial fees charged
|File opening fee||$75|
|Fee on each receipt of funds||1.5% (max. of $1,000)|
Annual administration fee
Fees for the care and management of funds received are assessed for each complete year of management. They are based on the average of the cash balance at the beginning and end of the year from the anniversary of the first receipt date.
Table 2. Annual administration fees based on balance
|$5,000 and up to $10,000||$50|
|Over $10,000 and up to $50,000||$100|
|Over $50,000 and up to $100,000||$175|
Table 3. Income tax fees
|Type of Return||Fee|
|T1 with instalments||$50|
|Non-resident Group T3||20% of gross income (max. of $125)|
|GST||5% of the total income tax fee|
Table 4. Other fees
|Purchase of investment||$0|
|Fees for partial year||Prorated|
|Fees on interest earned||5%|
|Postage, photocopies and faxes||2% of administration fees|
|Disbursement of funds||$7.50 per payment|
|GST - on or after Jan 1. 2008||5% of total fees|
|GST - on or after July 1, 2006||6% of total fees|
|GST - up to July 1, 2006||7% of total fees|
|Final distribution and taxes paid||$0|
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