Can I leave a house to minor children?

Can a minor own real estate?—and more estate questions

Thanks for writing in, Suniel. Leaving a gift to our minor-aged loved ones in our estate plans is a great way to provide for their futures. Let’s review what a minor-aged beneficiary is, who is responsible for the beneficiary, and how property can be gifted to them in a will or otherwise.

Technically speaking, what is a minor?

Depending on the province you are in, the age of majority is either 18 or 19 years of age. In Ontario, for example, a child is no longer considered a minor at 18 years old. When someone is under the age of majority in their province, they cannot enter into legal contracts, and a parent or guardian supports them until adulthood. 

In Ontario, when a minor-aged child is named as a beneficiary in a will or set to inherit under the Succession Law Reform Act when there is no will, then the executor, the person in charge of administering the estate, has to complete a few steps. One of the duties of an executor is to notify the estate’s beneficiaries of their inheritance. For minor-aged beneficiaries, the executor also notifies the parent or guardian of the child and the Office of the Children’s Lawyer, which is an independent law office in the Ministry of the Attorney General.

Minors as beneficiaries

Since a minor cannot enter into legal contracts, a lawyer a lawyer represents the child’s interests in legal matters and in court. The lawyer assigned to the file reviews the administration of the estate while the child’s inherited assets are held “in trust” until they reach the age of majority.

Think of holding “in trust” as a deposit for the child. The executor keeps the gift on behalf of the child under the estate’s name until it can be transferred to them directly. For example, if it were money being held in a bank account, the name would be as follows: “Estate of Sara Smith, in trust for John Smith.”

This naming approach can be used for bank accounts, property and investment accounts. Naming the asset in this manner ensures that the item is identified as part of the estate while being held for a specific person.

How to gift property to a child

When writing a will or creating an estate plan, we look at what we want to leave and to whom. And we can get pretty creative, Suniel. Hiring professionals to assist you through the estate planning process can be beneficial. If you decide that you would like to leave your home to minor-aged children, specifically, then the home will be kept in trust for them until they turn the age of majority in the province where the property is situated and can take over the title of the house. 

A few questions to discuss with your lawyer, when leaving a property to someone or multiple people, specifically minors, include:

• How will the expenses of the home be paid?
• Will you gift a dollar value to cover the home’s ongoing maintenance?
• What if the house needs to be sold to fund other aspects of the estate?
• If there is a mortgage, how will that be handled?
• If multiple people are to share in the ownership of the home, what are the impacts if one person does not want the house?
• What is the specific reason for leaving them the property?
• Would the beneficiaries benefit more from a dollar value instead?

As you can see, Suniel, there are many things to consider when gifting property to a minor-aged child. The good news is that someone will be responsible for ensuring that the interests of the child and their inheritance are protected by holding the assets in trust until they are old enough to take over and make decisions themselves. Thanks for your question.

Debbie Stanley is the CEO and Senior Estate Administrator at ETP Canada, a boutique firm in Guelph, Ont., specializing in estate administration. ETP Canada helps executors navigate their role with executor support, estate accounting and professional executor services. It recently launched an online course designed for Canadian executors called Executor Ready.

Read more on estate planning:

• Is the family responsible to pay the mortgage for a loved one who has passed away?
• What are the fees for becoming a joint tenant on a parent’s property?
• What are the taxes on transferring real estate to your kids?
• Capital gains, taxes and more: The implications of inheriting real estate

About Debbie Stanley, TEP, MTI

Debbie Stanley is an estate and trust professional, and CEO of the estate firm ETP Canada. She is a writer, speaker and regularly featured guest on Zoomer Radio.

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