In Canada, trusts can serve a wide variety of functions. They can help you provide support for a disabled dependent, provide for your heirs, support corporate tax and succession planning, and even provide for estate and incapacity planning. While they can be a very flexible tool, they can also be complicated. Improper drafting of key documents can completely frustrate your original intentions.

Every trust has the following basic characteristics:

  • The assets of the trust are held separately for the beneficiaries.
  • Legal title to the assets resides with the named trustee or with a nominee or custodial trustee on the trustee’s behalf.
  • The trustee has the power and legal duty to manage and or dispose of the assets as required by the trust deed and trust law. The trustee’s principal duty and responsibility is to protect the interests of the beneficiaries of the assets held in trust.

Trusts can be created either through a will, upon the death of the testator (testamentary trusts), or by trust deed, during one’s lifetime (inter vivos trusts). The benefits:

  • Your family and loved ones can be financially provided for as they mature and become more fiscally responsible.
  • Potential income splitting with family members.
  • The peace of mind of knowing beneficiaries are in good hands.

When choosing a trustee or trustees, you should be confident the trustee understands the duties of the role and has the knowledge and expertise to administer the trust in a timely, efficient way.

Some Common Trusts and their Uses

  • Qualified Disability Trusts and Henson Trusts – used to provide support for a disabled individual while taking advantage of preferential tax rates or protecting the beneficiary’s means-tested benefits (Henson Trusts)
  • Alter Ego and Joint Spousal Trusts – used for estate and probate planning, providing greater privacy than passing assets through an estate on death and saving on probate. Can also assist with incapacity planning
  • Spendthrift trusts – holds assets to provide for an individual who may have significant difficulty managing money on their own
  • Trusts for minors – it is often unadvisable or impossible for minors to inherit funds. These trusts can provide for the assets to be held until the child reaches the age of majority (or beyond)
  • Family Trusts – sometimes created in conjunction with an estate freeze, these trusts may provide for some income splitting between family members as well as helping transition assets to subsequent generations
How we can help

By appointing our trust services division as sole or co-trustee, you can be confident the trust will be managed in a way that is impartial and professional and achieves your desired objectives. We provide knowledge of trust law and the required tax expertise to fulfill all of the obligations required of a trustee.

We also offer support to individuals who are trustees and can act on your behalf as an agent. In this capacity, we provide guidance on decision-making and perform various administrative tasks on your behalf, such as preparing annual trust tax filings or managing disbursements and maintaining proper trust records.

In all scenarios, we are here to provide solutions.