Setting Up a Trust in Ontario
Setting up a trust in Ontario has many benefits – especially for tax and financial planning purposes. Trusts can also hold property on behalf of a beneficiary or group of beneficiaries which can ensure lower tax rates for beneficiaries. If you are looking to set up a trust in Ontario – our Richmond Hill estate planning lawyers from Blackburn Lawyers can help.
The main advantage of setting up a trust in Ontario is that it allows you to separate the management and control of an asset from its ownership. A trust is also referred to as a legal arrangement between three parties including the settlor of the trust; the trustee or the person in charge of the trust; and the individual(s) who will benefit from the assets owned by the trust. In some cases the settlor, trustee and beneficiaries can all be the same person.
Types of Trusts
A trust is either considered a testamentary trust or an inter vivos trust. Both types of trust have different tax rules that govern them and serve different purposes.
Testamentary Trusts: These types of trusts are typically created once a person has passed away. The terms of this type of trust are usually outlined in a will or by court order in relation to the deceased individual’s estate under provincial or territorial law.
Inter vivos Trusts: These types of trusts are not a testamentary trust. They are completely different and have different tax regulations to follow. Here is a rudimentary list of the different types of inter vivos trusts:
- Alter ego trust
- Deemed resident trust
- Communal organization trust
- Employee benefit plan trust
- Employee life and health trusts
- Employee trust
- Environment Quality Act trust
- Joint spousal or common-law partner trust
- Specified trust
- Unit trust
- Tax-free savings account (TFSA) trust
- Personal trust
- Real estate investment trust (REIT)
- And more
For more information on trusts and a complete list of inter vivos trusts available in Canada – visit the Canada Revenue Agency website which outlines the various types of trusts available.
If you are looking to set up a trust – we highly recommend you consult with a wills and estates lawyer to ensure it’s done properly and that the goals of the trust meet your financial and tax expectations.
Contact an Estate Planning Lawyer from Blackburn Lawyers for Legal Assistance in Setting Up a Trust in Ontario
Trusts can be a strategic and powerful tool for tax and financial planning. However if not done properly, it can negate all the financial and tax benefits of setting up a trust At Blackburn Lawyers our estate planning lawyers often consult with tax professionals when setting up trusts for our clients. We take extra efforts to ensure that our trusts are set up in such a way that our clients benefit both financially and from tax stand point. Most importantly – we ensure our clients best interests remain our number one priority when setting up trusts. Contact our law firm today for a consultation with a member of our legal team for legal assistance and counsel on setting up a trust in Ontario. Our estate planning lawyers are happy to help.
Disclaimer: Please note the content in this article is intended to act as a general overview on a legal topic and does not constitute as legal advice. For legal advice specific to setting up a trust in Ontario please consult with a wills and estates lawyer who is familiar with setting up trusts.