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If you’re facing either bankruptcy or a consumer proposal, you may be concerned about what will happen to savings set aside for your children either by you or someone else.
In the case of a proposal, the answer will most likely be ‘nothing’. As with most assets in a proposal, you you’ll still need to advise your trustee about them, but any accounts in your children’s names will not be touched.
In a bankruptcy situation, however, what happens to your children’s savings accounts will depend on exactly how those accounts were set up in the first place.
- If a child’s account is set up in the name of the child and denoted as a trust account, then it won’t be part of the bankruptcy and will remain in place for your child.
- If the account is in your name or held jointly by you and your child, the funds may be considered an asset and may be seized by the trustee.