In Ontario, any estate (testamentary or other) is automatically a trust. However, you can create one or more express trusts, referred to here as testamentary trusts.
Testamentary trusts are stipulated in the will and are created upon the testator's (the person making the will) death. In accordance with your will, property is turned over to a trustee who manages it according to your instructions in the best interest of the beneficiaries. A trust company is the only legal entity authorized to do this.
You determine the duration and terms of the testamentary trust.
Setting up a testamentary trust for cash and assets (stocks, mutual fund shares, property) can help defer and reduce estate taxes while protecting your estate.
From a tax standpoint, assets left in trust constitute an estate separate from the estate of the beneficiaries. There are also other reasons to set up a testamentary trust: