Assets of a minor
The Office of the Public Guardian and Trustee (OPGT) protects a minor's assets when there's no other trustee available.
Who is treated as a minor
In Alberta, a minor is someone under the age of 18.
You may be treated as a minor beyond the age of 18, depending on the wording of a:
- court order
- settlement document
Who makes decisions
Parents and guardians make personal decisions for minors about things like:
- medical care
- social activities
Parents and guardians don't automatically have the power to receive and manage money or property for a minor. This depends on the amount of money or property.
A parent or guardian may apply to the court to become the minor's trustee.
How a minor is awarded assets
A minor could receive assets, such as cash or property, by being the beneficiary of a:
- personal injury statement
- 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
If any of the above name a trustee for the minor, then the trustee will hold the assets on the minor's behalf.
How the OPGT gets involved
When a minor is awarded cash or property, usually a lawyer or an insurance company is involved. They contact the OPGT if there’s no trustee available.
Use of trust money before age 18
If you’re a minor or the guardian of a minor who has a file with our office, contact your public trustee representative to learn more.
Minor awarded under $10,000 with no named trustee
Parents and guardians may manage the funds for the minor if there’s no named trustee.
The organization transferring the funds must have the parent or guardian sign a document acknowledging they’re responsible for managing the funds in the ‘best interest of the minor.’ This means they must put the child’s needs first.
If there’s no named trustee for the minor, the public trustee manages the money, even if it’s less than $10,000, if it’s from a:
- Victims of Crime compensation settlement
- Workers’ Compensation claim
- only if the parents are divorced or separated
- court order or will that directs otherwise
Minor awarded over $10,000 with no named trustee
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. The parent or guardian may assist by discussing with the public trustee how the funds should be used to look after the minor.
- if the minor has been injured, the money may be necessary for therapy
- if the minor's parents have died, their guardian may need help with day-to-day living expenses
How to become a minor's trustee
A parent, guardian or other person can apply to the court under the Minors’ Property Act and ask to be appointed as the minor’s trustee. If you’re appointed as a trustee, you’ll:
- manage the minor's assets
- provide a financial report to the minor when they come of age
If you want to be the minor's trustee, you should:
- make sure you understand the duties and responsibilities
- get a lawyer’s help with filing the court application
Each trust earns interest income. All income is reported by the OPGT 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
If the person doesn’t have mental capacity, the trust money is paid to their trustee.
If the person has mental capacity, the trust money is payable once a person turns:
- 18, or
- the age specified in the trust document
Shortly before this, the public trustee gets in touch with the minor so they can sign a Release form.
Additional fees could be charged for money held past the age the minor is supposed to get their payment. Income tax owed because of interest income earned by the minor's trust may be paid from the minor's trust account.
A Release form is a legal document. If you're the person receiving money, you shouldn't sign this document until you've turned 18.
By signing the Release form, you're confirming you:
- have read and understood the Statement of Receipts and Disbursements
- accept the transactions shown in the statement
When trust money is paid out
Once we’ve received a signed Release form and an Affidavit of Execution or a court decision, we subtract our fees and pay out:
- the balance of the trust
- all interest earned
The payment can be made by cheque or direct deposit.
The public trustee makes arrangements to ensure the person gets their funds.
If a person can't manage their money
If someone doesn’t have the capacity to manage their own financial affairs when they reach 18, a court-appointed trustee must be put in place.
Lawyers and accountants
The costs of agents the OPGT may hire, such as lawyers and accountants, are charged to the account.
The OPGT 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're 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 installments||$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|