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Set up a trust
What is a trust?
Trusts are set up trough a legal act that creates a separate estate to which all or part of the trustor's assets are transferred. The property is administered by one or more trustees to specific ends on behalf of one or more beneficiaries.
Trusts can therefore be set up to be managed by a trustee on behalf of your designated beneficiaries.
Why set up a trust?
There are many reasons to set up a trust:
- To allow children from a prior marriage to inherit your estate when your current spouse dies.
- To ensure the financial security of a beneficiary (e.g., a disabled child).
- To temporary administer property (e.g., until a beneficiary reaches the age of majority).
- To reduce the heirs' tax burden by splitting the income between the trust and the benefiaries1;
- To retain control over property transferred to the trust (e.g., a cottage or a business).
Type of trust?
Before setting up one or more trusts, see a legal advisor or other specialist to determine which formula is best suited to the size of your estate and medium- and long-term objectives. Decisions made to this end can have important legal, tax and financial impacts on your estate.
There are two types of personal trusts:
1. From a tax standpoint, a trust is treated as a separate taxpayer.
