Trust services for people under the age of 19

One of the roles of the Public Guardian and Trustee (PGT) is to manage assets held in trust for children and youth under the age of 19. An asset is something that a person owns, such as money or a house.

Definition of a trust

A trust is a legal arrangement that governs how assets are protected and controlled by one party (called the trustee) for the benefit of another party (called the beneficiary). A trust usually involves the following three parties:

1. The settlor: The person or company who sets up the trust and instructions about who benefits from the trust and how the assets are to be managed. The settlor also contributes assets to the trust. In some cases a trust can be created without a settlor
2. The beneficiary: The person who benefits from the trust
3. The trustee: The person or company who manages the trust on behalf of the beneficiary

The PGT as trustee of children and youths' trust funds

As children and youth are incapable of making legal decisions until they reach the age of majority, the PGT acts as trustee of children and youth’s trust funds to protect their financial and legal interests.

Children and youth assets sometimes come to the PGT to be held and managed. We may receive assets in trust when:

• A child or youth is named in a will and there is no trustee
• The law specifies that we are to act as trustee
• A trust agreement is made and the PGT has agreed to be trustee
• A court order names the PGT as trustee
• Money is given in trust as compensation for injury, for example, insurance proceeds or a legal settlement

When the PGT becomes trustee, the PGT makes decisions about managing the assets and approving requests to access those assets for the benefit of the child and youth. To see an example on how the PGT manages assets, see Charlie’s story.

When the assets come to the PGT

Our Child and Youth Services (CYS) division is responsible for overseeing trusts for children and youth.

The CYS division assigns a guardianship and trust officer to manage assets in the trust for each child or youth. The guardianship and trust officers provide a range of services including:

• Making sure that the funds are secure
• Overseeing requests for funds from the child or youth, their parents or legal guardian
• Investing the money for the benefit of the child or youth. For more information, see How we invest clients' money.

When the PGT receives assets for your child or youth

When we receive assets for a child or youth, we send the parent or legal guardian a letter. The letter will:

• Confirm the amount received
• Outline how the money and/or assets can be used to provide for the child or youth's needs
• Provide details about how to contact the guardianship and trust officer assigned to manage the funds

To manage the trust for your child or youth

Once the PGT is trustee, it is the role of the PGT to manage these funds until a child or youth reaches the age of 19. Sometimes a parent or close family member wants to manage the trust for the child or youth. In this case, you can apply through the court to become trustee for your child or youth. You may choose to hire a lawyer to help you with this process.

Duration of trust

In most cases, the role of the PGT as trustee ends at age 19, the age of majority in B.C. At age 19, the funds are released to the youth.

Sometimes, a trust agreement specifies that the funds are to be managed for a period of time that extends beyond the youth’s 19th birthday. When this happens, the PGT remains trustee until the terms of the trust are fulfilled.

Requesting money from your child or youth’s trust

Each request for funds is considered carefully by your child or youth's guardianship and trust officer. As trustee, we are bound by law to make sure that any funds released:

• Align with the terms of the trust where a trust document or agreement exists
• Are guided by the Family Law Act, which states parents and guardians have a duty to support their child or youth
• Are for the sole benefit of the child or youth
• Are used for the intended purpose of the trust

To make a decision, the guardianship and trust officer may ask for information from you or your child or youth. The guardianship and trust officer considers:

• The terms of the trust
• The amount of money in the trust
• The current and future needs of the child or youth

We aim to balance the child or youth’s needs before they reach the age of 19 and their needs once they become an adult. This means that we try to make sure that your child or youth will have some assets when they turn 19, while also meeting their needs when they are young.

Requesting money from your child or youth’s trust to provide support for them

The Family Law Act states that parents and guardians have a duty to support their child or youth. However, the PGT may receive funds on behalf of children and youth that may be used to assist with their support.

When asking for money to help support your child or youth, their guardianship and trust officer will ask that you put your request in writing. In your request, you need to address the following questions:

• What are your child or youth's needs?
• What is your ability to fully or partially provide financial support for those needs?
• What other sources of funds are available to meet the need? For example, Canada Pension Plan (CPP) Children's Benefits or Child Disability Benefits
• What are the future plans for use of the trust funds? For example, will the trust be needed to support future education expenses?

Depending on the situation, the PGT may not be able to fulfil all requests for funds to provide financial support for your child or youth.

You can also ask for money to support special opportunities. These could be medical or educational costs or opportunities that directly benefit your child or youth but cannot be paid for any other way. When asking for money from your child or youth's trust for this kind of opportunity, your child or youth’s guardianship and trust officer will discuss the request with you. They will also ask you to provide the following information in writing:

• What is the special opportunity?
• How does it benefit your child or youth?
• What is the cost?
• Are there any other sources of funding?
• Are there future expenses that your child or youth may need to pay from the trust? For example future education expenses

The PGT’s investment of the money in the trust

The PGT as trustee makes investment decisions that meet the prudent trustee standard set out in the Trustee Act. A prudent trustee must use a prudent investor’s care, skill, diligence and judgment.

As a prudent investor, the PGT:

• Takes an approach that balances risk and returns
• Develops a written investment strategy and plan
• Makes necessary investments to protect capital and provide income for the children and youth under our care
• Develops risk and return objectives that are suitable and reasonable, based on the size of the portfolio and the circumstances of the children and youth
• Make sure that the investments are diversified in class and type
• Make sure that the costs and fees charged for investment purposes are reasonable and appropriate

To make prudent and wise decisions we take into account many factors, including:

• The age of your child or youth
• The amount of money and the value of assets in the trust
• The likelihood of money from the trust being needed before your child or youth turns 19

Your child or youth's trust monies are invested in pooled investment accounts managed externally to the PGT.

Interest rates change over time and will depend on how the child or youth’s money is invested and how long it will stay invested. You can find the rates of return paid on PGT investment funds in the PGT's annual report. For more information, see How we invest clients' money.

Filing a tax return for your child or youth

Even though the PGT may be managing your child or youth’s trust, it is the parent or guardian’s responsibility to file tax returns for your child or youth if a return is required by the Canada Revenue Agency (CRA). You may wish to get professional tax advice if you have questions about your child or youth's funds and taxes.

The PGT will send you a document called a T5 that sets out the child or youth’s social insurance number and any interest income over $50.00 for that tax year.  You will need this document when you are filing your child or youth’s tax return.

Note that interest income on personal injury settlements is exempt from income tax until your child or youth turns 21.

It is important to contact the CRA to get information about the requirements for filing taxes for your child or youth's trust.

• CRA toll-free number: 1-800-959-8281
• CRA website: www.cra-arc.gc.ca

PGT involvement in managing a portion of child actor/entertainers’ earnings

A child actor/entertainer may be very young and have significant earnings. Their earnings are often paid to someone other than the child actor/entertainer as they cannot independently enter into employment contracts due to their age. B.C.’s Employment Standards Act and Employment Standards Regulation recognize that a child or youth’s earnings belong to them are independent from their parents and families. To ensure that the child actor/entertainer will have some of their earnings saved for their personal benefit the Employment Standards Regulation requires employers of a child actor/entertainer to send a portion of the child's earnings to the PGT.

Once we receive the child’s earnings, we are required by law to hold the funds in trust until the child reaches the age of 19. When we receive the first cheque from a production company, we will:

• Send you a letter of introduction, which includes initial statements indicating how much we have received
• Continue to send you quarterly updated statements, if we receive additional funds

Parents or guardians of child actors/entertainers can contact us at cys@trustee.bc.ca at any time to receive an update on funds held in trust by the PGT.

All of the other information about our trust services on this page also apply to child actor/entertainer earnings held in trust.

Supporting your child or youth’s final distribution of their trust

It's very important to help your child or youth to be ready to receive the money in their trust. Helping your child or youth to have proper financial knowledge and a plan for their money will help set them up for success.

Your child or youth's trust fund when they turn 19

At age 19, your child or youth is legally an adult. They will receive the balance of their trust fund unless a special circumstance applies. For example, a will may specify that the money remains in trust your child or youth is older than 19.

Supporting your child or youth to manage their money

Your child or youth's guardianship and trust officer will, whenever possible, involve your child or youth in decisions about their trust. This will help them with financial wellness and to set goals. When your child or youth is 17, we send them a letter, to let them know about the money in their trust fund, and to offer suggestions to support financial planning.

There are many reliable financial planning resources available online and through banks, credit unions and other institutions. The PGT Dollars and Sense Handbook [PDF] also has information and resources to help your child or youth to be ready to receive the funds in their trust.

Talk to your child or youth's guardianship and trust officer or have your child or youth contact their guardianship and trust officer for information and resources to help them plan to receive their funds.

If you have concerns about your child or youth's capacity to manage their money

If you are concerned about your child or youth’s mental capability to manage their funds as an adult, you can look into alternative decision-making options. Generally speaking, mental capability means a person’s legal ability to understand and make rational decisions about their affairs. A person may lack mental capability due to illness, injury, a learning disability or mental health problems. Please note that mental capability is not the same thing as maturity or financial knowledge. The PGT must pay the youth their trust balance at age 19 unless the youth has been found incapable to manage their finances. If the youth is capable but needs help to manage their finances, our child or youth's guardianship and trust officer can work with you to help you make a plan to protect your child or youth's financial future.

Options can include:

• Representation agreement (RA): A legal document that allows adults to name another person to manage their finances or make health care decisions if they cannot do so on their own. The adult and the person they name (the representative) must be capable when the RA is created
• Power of attorney (POA): A legal document that allows adults to name another person (the attorney) to manage their financial and legal affairs if they cannot do so on their own. The adult and the attorney must be capable when the POA is created

See It's your choice: personal planning tools for more information about the options available to plan for your future.

Trust services for people under 19 who have been severely injured

What to expect from the PGT

We know that it can be very difficult for families with children and youth who have experienced a severe injury or trauma. Our goal is to manage your child or youth's trust in the best way possible, for the benefit of your child or youth. In addition to the trust services outlined in Trust services for people under the age of 19, we may provide more individual case management services to make sure your child or youth’s present and future needs are met. This can include working with you to develop a budget and to disburse funds for services such as tutoring, physiotherapy and life skills training. To see an example on how the PGT supports a child or youth who has been severely injured, see Luciana’s story.

Your child or youth’s guardianship and trust officer will:

• Arrange a meeting with you, to find out more about your child or youth’s goals, needs and situation
• Consider which type of investments are best for your child or youth
• Balance the need to invest and earn interest with the need to spend funds for your child or youth’s benefit
• Develop an annual budget taking your input into consideration, based on the terms of the trust and your child or youth’s best interest

Developing a budget

Your guardianship and trust officer will work with you to develop a budget within the amount provided by the settlement or the amount awarded by the court. The purpose of the budget is to meet your child or youth's present and future needs as much as possible. When making the budget, it is important to know how the court anticipated the proceeds of the lawsuit would be spent. Your guardianship and trust officer will look at information such as:

• Cost of care reports
• Reasons for the court judgment
• The PGT's recommendation to the court
• Reports from external case managers
• Financial projections for the trust

It can be challenging to cope with the changes that happen when a child or youth experiences a severe injury or trauma. We use our experience and knowledge to make sure your child or youth's trust lasts as long as it can and fulfills your child or youth's needs.

Things your guardianship and trust officer will discuss with you:

• Your child or youth’s current and future needs for care, including equipment, therapy and other support
• How to meet your child or youth's special-accommodation needs
• The level of care your family is able to provide
• Your family's circumstances, needs and expectations
• Your need for respite care
• Whether there is a need for a professional case manager
• Resources available in the community
• The purpose of the funds as described in the court reasons for judgment or the settlement documentation
• The amount of funds in the trust
• Financial projections for the trust
• Investment options
• Tax reporting requirements

After your guardianship and trust officer meets with you, they will make a draft budget for you to consider. The budget will outline items such as:

• What costs are covered by your child or youth's trust
• The dates the money will be paid from the trust
• Who will receive payment
• What the payment is for
• Other sources for funds to support your child or youth
• PGT fees and commissions (For more information, see Fees for children and youth services)

Once the budget is approved by you and your guardianship and trust officer, it will serve as a guide to help you manage your child or youth's trust fund. The budget will be reviewed annually. If you feel that the budget does not meet your child or youth's needs, you can ask your guardianship and trust officer for a review. The budget can be changed.

Making a request for extra funds from the trust

Sometimes, families need to ask for money from the trust, for expenses that have not been outlined in the budget. Discuss this with your guardianship and trust officer. Before making the decision, your guardianship and trust officer will consider:

• Whether there is enough money in your child or youth's trust to afford the expense
• If it is for a purpose outlined in the court's judgment or settlement
• The benefit of the expense to your child or youth

Reimbursement of costs for providing care

Some parents are able to take on duties for their child or youth’s care that would normally be provided by a third party. If there is enough money in your child or youth's trust, we can sometimes reimburse parents for care over and above regular parenting duties. This could include physiotherapy, massages, turning, or other care that you give your child or youth. The level of reimbursement for the care you give to your child or youth depends on:

• What the trust can afford now and over time
• The kind of care you want to provide

Investing your child or youth’s funds

Your guardianship and trust officer will work with you to make sure the funds in your child or youth’s trust are invested in the most appropriate way possible.

For more information, see How we invest clients' money.