Leaving an Inheritance to Minor Children: What Alberta Parents Should Know

Under Alberta law, a children under 18 cannot receive property outright.

Under Alberta law, a child under 18 cannot receive property outright. If a minor inherits a lump‑sum gift, life‑insurance policy, or RRSP designation, the money is diverted to the Office of the Public Trustee until the child’s 18th birthday (or to age 19 in British Columbia, 21 in some other provinces) unless your will designates a trustee. The Public Trustee must invest conservatively and hand every dollar to the child in a single payment the day they reach the age of majority—no staged releases, no discretionary spending on tuition or braces unless the will (or a court order) says so. 

That “automatic payday” might suit an 18‑year‑old who’s remarkably prudent; most parents flinch at the thought of an entire inheritance landing during first‑year university. The better approach is to build flexibility while still protecting the funds—and that means planning ahead.

When leaving an inheritance to minor children, personalized legal advice can avoid costly mistakes. Book a complimentary estate‑planning consultation with Wiebe Law today.

Key building blocks for Alberta parents

1. A will that names the right people

• Personal guardian: the adult who will raise your children day‑to‑day. Appoint under the Family Law Act.

• Trustee (or executor–trustee): the person (or trust company) who controls the money until your chosen age(s). You may name the same person for both roles, but many couples prefer separate “checks and balances.”

• Backup choices: Always list at least one alternate in case your first pick is unwilling or unable to serve; the court will otherwise impose its own choice. 

2. A testamentary trust built into the will

• A “minor beneficiary trust” is language inside the will that automatically captures any share passing to a child under a specified age. Advantages:

• Avoids Public Trustee oversight: The trustee you choose, not the province, manages the money.

• Tax relief: Testamentary trusts (now called “Graduated Rate Estates”) enjoy up to 36 months of access to the lowest marginal tax brackets. 

• Staged distributions: You can allow discretionary payments for education, medical costs or extracurriculars, then release capital at milestones—e.g., 25 % at age 21, the balance at 25.

• Asset protection: Funds held in trust cannot be seized by the child’s creditors or a future spouse while undistributed. 

3. Life‑insurance and registered‑plan designations

Insurers and financial institutions pay directly to the named beneficiaries, bypassing the will. To integrate those assets with your trust:

• Name “John Doe, in trust for my minor children as set out in my last will dated _____.”

• Review designations after every major life event (birth, divorce, remarriage). A forgotten old form can derail your plan. 

4. The $25,000 exception—and why it’s not enough

Alberta’s Minors’ Property Regulation lets a parent or guardian receive up to $25,000 on a child’s behalf without court approval. Anything above that ceiling is funnelled to the Public Trustee unless your will directs otherwise. In today’s housing and tuition markets, $25,000 barely covers a semester—so most estates will exceed the limit. 

5. Intestacy is the worst‑case scenario

If you die without a will, Alberta’s Wills and Succession Act divides your estate under rigid formulas; any minor child’s share goes to the Public Trustee, and the surviving parent may only draw on it with court consent. Litigation costs can quickly dwarf what a basic will would have cost. 

Choosing the right trustee when leaving an inheritance to minor children: questions to ask

1. Financial acumen: Can they manage investments or will they need professional help?

2. Longevity: Are they likely to out‑live the trust term (often 10–25 years)?

3. Values alignment: Will they use discretionary powers the way you intend?

4. Geography: An out‑of‑province trustee may face bonding requirements and extra tax filings.

5. Neutrality: A professional trustee can defuse sibling tensions if large sums are involved.

Frequently overlooked assets

• RESPs: The subscriber controls the plan; be sure to name a successor subscriber in the event of your death.

• Digital wallets & crypto: Store private keys securely and instruct your trustee.

• Family cabins & farmland: Consider a separate cottage trust or co‑ownership agreement to spell out maintenance and buy‑out rules for children who inherit at different ages.

Six‑step action plan

1. List everything you own, including insurance and pension death benefits.

2. Estimate each child’s future needs—tuition, housing, special care.

3. Meet with an Alberta estate lawyer to draft wills with testamentary trusts.

4. Align your beneficiary designations with the trust wording.

5. Store originals safely and tell your chosen trustees where to find them.

6. Review every three to five years or after any major change (birth, separation, business sale). 

How Wiebe Law protects your family’s tomorrow

At Wiebe Law, we draft inheritance plans for minor children in Alberta that:

• keep the Public Trustee out of your family’s finances,

• maximize tax deferral through properly‑structured trusts, and

• release capital on the timetable you choose—not the government’s.

This article provides general information only and is not legal advice. For advice about your particular situation, please contact us.

Ready to safeguard your children’s future? Book a complimentary estate‑planning consultation with Wiebe Law today.