The handling of minor beneficiary designations differs between Québec and other Canadian provinces, due to provincial legislation.
A minor is a child who has not reached the age of majority, as defined by provincial legislation.
Residents of all Canadian provinces except Québec:
If a benefit becomes payable to a minor who is named as a primary or contingent beneficiary:
The benefit can only be paid to a Trustee on behalf of the minor.
If the employee doesn't appoint a Trustee on the beneficiary form, the benefit payout will be held by the courts until the minor reaches the age of majority.
It is very important for employees to name a Trustee if any beneficiary named on the form is a minor.
If the employee designated a minor as an irrevocable beneficiary:
The policy is automatically frozen until the minor reaches the age of majority, even if the employee named a Trustee.
The benefit payout can't go to the Trustee.
If the employee is a Québec resident and designates a minor as a beneficiary:
The amount payable to the minor (while they are still a minor) will be paid to the parent(s) or legal guardian(s) on the minor's behalf. This occurs unless the employee set up a valid Trust for the beneficiary, in a Will or in a separate contract.
If this is the case, the member must designate the Trust as the beneficiary.
Québec residents may not use the standard beneficiary form to nominate Trustees as the beneficiary for minors. Some insurance carriers provide separate forms for this purpose, but can’t guarantee the legal validity of the form and recommend seeking legal advice before completing.
In this case, the member should:
1. Seek guidance directly from the carrier on how to proceed.
2. Obtain legal advice.