Question: Wilfred, I’ve maximize the CDA account by giving birth to six children. With the government 1-1 matching, the Child Development Account accounts are worth $144,000. What happens if both my wife & I die? Will the government take back all the money away?
Answer: The Child Development Account account belongs to your children. It does not form part of your estate. In fact, the CDA account is a trust account. The trustee is the parent. If divorced, the trustee is the parent who has the the custody, care and control of the child. Note that ‘parent’ also refers to legal guardian. If the child is legally adopted, the trustee is the adopter of the child. If the trustee is dead and there is no other legal guardian, the personal representative of the deceased trustee becomes the trustee. Personal representative means the executor or administrator for the time being of the deceased trustee. If the trustee lacks mental capacity and there is no other legal guardian, the deputy of the trustee becomes the trustee of the CDA. If there is no deputy, the government (the Minister – not sure who) can appoint a trustee.
If there is fear that the CDA account will be mismanaged by unknown trustee, you should write a Will. The Executor/Trustee is the Trustee of the Child Development Account.