As someone who grew up in 4H, both in beef and horse for all of my childhood, it’s near and dear to my heart! I can tell you the biggest difference between the two was certainly the paycheque at the end of the season! So naturally my own children only chose horse 4H, to which my youngest asked with teary eyes if she’d have to kill her horse at the end of the year. Oh boy that would be a tough sell to these little cleavers, let alone us parents who put the time and money into finally getting a kids horse good enough to take to town!
My kids eventually moved from 4H to rodeo and that my friends is where the real money is spent! However, my nieces and nephews went the beef and sheep 4H route and those kids are rolling in it! Don’t get me wrong, back in my day we made good money selling calves too, but absolutely nothing to what they’re raking in now. It’s actually such a fantastic way to teach kids some really great fundamentals in life, they not only learn animal husbandry, a sense of community, public speaking, and hardwork; they also can be taught how to manage money!
These are kids who understand the concept of ‘rate of gain’! The same principles can absolutely be applied to ‘rate of return’! There are a few different options for this, one of the most common would be an “In-trust” account (often written ITF or “informal trust”), they are becoming increasingly common among farm and ranch families with kids earning substantial livestock, rodeo, jackpot, or 4-H income.
Because minors generally can’t fully manage brokerage accounts themselves, an adult, usually a parent, opens and manages the account as trustee for the child beneficiary.
If structured properly, the money legally belongs to the child when it was:
• earned by the child,
• gifted irrevocably to the child,
• or clearly designated for the child.
The parent controls the investments until the child reaches the age of majority in Alberta (18).
Why families use them:
If the money truly belongs to the child, capital gains are often taxed in the child’s hands instead of the parent’s. Since many kids have little taxable income, investments can grow very tax-efficiently over time.
This is one reason many agricultural families use in-trust accounts for livestock sale proceeds and project earnings.
A very important note:
CRA pays close attention to where the money originated.
If parents gifted the funds:
• interest and dividends may still attribute back to the parent for tax purposes,
• while capital gains are often still taxable to the child.
If the child genuinely earned the money through:
• 4-H projects,
• livestock sales,
• jackpots,
• sponsorships,
• farm work,
• or business income,
the income is generally much easier to defend as the child’s own.
Good documentation matters:
✔️ auction receipts
✔️ invoices
✔️ sponsorship records
✔️ bank trails
✔️ project ownership documentation
One thing that surprises many parents:
At age 18 in Alberta, the beneficiary can generally demand full control of the account.
That means the money legally becomes theirs to manage — even if parents disagree with how it’s spent.
For some families this is perfectly fine. Others may prefer alternatives like:
• RESPs
• staged gifting
• formal trusts
• or different ownership structures
RESPs are also incredibly valuable tools for kids because they offer:
✔️ tax-deferred growth
✔️ government grants
✔️ potentially low-tax student withdrawals
In Canada, the CESG grant typically adds 20% on annual RESP contributions up to certain limits — one of the best “guaranteed returns” available for families.
A common structure for farm and ranch kids often looks like:
• operating/project money in a youth bank account
• RESP contributions maxed enough to capture grants
• excess long-term money invested in an in-trust brokerage account
• diversified low-cost ETFs for long-term growth
Once balances start becoming substantial, it’s usually worth speaking with a CPA or tax lawyer — especially when:
• accounts exceed roughly $50k–$100k
• multiple children are involved
• breeding operations exist
• land/equipment ownership enters the picture
• or parents want control beyond age 18
Many farm families unintentionally create tax or ownership complications simply because accounts were opened casually at the bank without understanding the long-term implications. If you’re looking for options and want to have a chat, reach out and we’ll go through some of your options!
