So this taxpayer's son is the beneficiary of a TFSA. This is probably a one-off and - since there is no tax payable - the suggestion to just put it on the dependent screen sounds good. However, because this designation is to a minor child, there are definite issues which need to be addressed if they have not been already. The quote I see is from Ontario, but the family needs to check law in the province of residence to ensure that all is well:
"Designations to minor children
Designations to beneficiaries who are children under 18 (which are not uncommon for TFSAs) create significant potential issues. First, as with any gift to a minor, the Office of the Children’s Lawyer must be notified of the potential gift. Second, if the amount is more than $10,000 for any child, a proper guardianship must be established to manage the funds until the child turns 18.
A parent is NOT automatically the guardian of the property of their own minor child and a court order of guardianship will be required."
And this doesn't apply just to inheritance. Some years ago, a family bought raffle tickets at the Stampede and put them in the names of their children. Lo and behold, one of the children won a motorhome. The family was ecstatic; this would be great for family vacations. But then the Alberta version of the Office of the Children's Lawyer stepped in and ruled that the motorhome had to be sold and the proceeds put in trust for the child whose name was on the ticket. Goodbye holidays.
Jo Ruelle
