Inheriting From a Grandparent in Canada

Inheriting from a grandparent is often a young person's first encounter with an estate, and it tends to arrive with two questions: is this taxed, and when do I actually get it? The reassuring answers are that there is no tax on receiving it, and that the timing depends mostly on whether you are an adult and on how the will was written. The wrinkles — what happens if your own parent has already died, and what happens if you are still a minor — are where it pays to understand the mechanics.

This guide explains how grandchildren inherit, the per stirpes rule, minors and trusts, and the tax picture. It is general information for the common-law provinces, not legal advice.

Two ways grandchildren inherit #

A grandchild generally inherits in one of two ways. The first is directly — the grandparent names the grandchild as a beneficiary in the will. The second is by representation, through a per stirpes gift: the will leaves shares to the grandparent's children, and because one child has died, that child's share passes down to their own children.^[1] On an intestacy (no will), grandchildren typically inherit only where their parent — the deceased's child — has already died, stepping into that parent's place.

The per stirpes rule #

"Per stirpes" means a gift follows the family branch. If a grandparent leaves their estate "to my children, per stirpes," and one of those children predeceased the grandparent, that child's share is divided among the grandchildren in that branch rather than disappearing or shifting to the surviving children. It is the standard mechanism for passing an inheritance down a generation when a parent dies first, and it is worth confirming a will uses it rather than leaving the outcome to default rules.

No tax on receipt #

Canada has no inheritance tax, and a grandchild does not include an inheritance in income.^[2] Any tax arising from the death — for example capital gains on the grandparent's investments — is the estate's responsibility and is settled before distribution. The grandchild only owes tax later, on what the inheritance earns once it belongs to them.

Minors and trusts #

A minor generally cannot receive an inheritance outright. Where a grandchild is under the age of majority, the funds are typically held in trust under the terms of the will, or paid into court, until they come of age.^[3] This is why a grandparent leaving money to a young grandchild should name a trustee and set terms — including, often, an age of distribution later than the age of majority — rather than leaving a lump sum to be released the day the child turns 18 or 19. See leaving an inheritance to a minor without a trust for what goes wrong otherwise.

Skip-generation and education gifts #

Grandparents sometimes deliberately leave gifts to grandchildren — to help with education, to skip a generation for family or tax reasons, or simply out of affection. For larger gifts to young grandchildren, a trust with a sensible distribution age is generally far better than an outright gift, and a letter of wishes can guide the trustee on priorities such as schooling. These are choices for the grandparent to make in their own will, with advice where the amounts are significant.

What we focus on at It's Simple Will #

The Will Creator helps grandparents leave clear gifts to grandchildren and prompts the trustee and age-of-distribution decisions that protect a young beneficiary. If you have just learned you are inheriting from a grandparent, our guide on how to inherit money in Canada walks through what happens next.

Related guides #

• How to inherit money in Canada
• Leaving an inheritance to a minor without a trust
• Probate and minor beneficiaries
• Inheriting with siblings
• Letter of wishes vs will