Using a Family Trust for Prescribed Rate Loan Arrangements
A low prescribed rate can provide tax saving opportunities for you and your family.
If structured properly, a family trust is a structure that may allow a parent or grandparent to split income with their low-income family members. The strategy is to shift investment income and capital gains that would otherwise be taxed in your hands at a high marginal tax rate to the hands of your low-income spouse, children, nieces/ nephews and/or grandchildren.
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Living / family trusts
A living trust can be an effective wealth planning tool in appropriate circumstances, facilitating strategies such as income splitting, business succession planning and charitable giving. This article provides a general overview of living trusts established in common-law provinces in Canada.
The following topics will be addressed:
- What is a trust?
- Creating a living trust
- Parties to a trust
- Potential uses of a trust
- Taxation of trust income
- Assets held in a trust
- Winding up a trust
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Testamentary trusts
A reason to consider amending your Will
It is common to distribute your assets on death outright to your loved ones. A testamentary trust is an alternative to a direct or outright distribution of estate assets. It allows you to control the timing and distribution of assets to your beneficiaries. The assets held in the trust are invested and managed by the trustee of the trust, who distributes the income and capital to the beneficiaries in accordance with your wishes stated in your Will. This article discusses reasons why you may want to consider amending your Will and reviewing your current ownership structure to provide for a transfer of some or all of your assets to a testamentary trust.
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Henson Trusts
Planning for persons with disabilities
The following article considers the use of a Henson Trust as an estate planning tool to provide for the ongoing care and financial support of a person with a disability.
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Alter ego and joint partner trusts
An estate planning strategy to protect your wealth
You’ve taken a lifetime to accumulate your wealth. You want to ensure that your estate is well protected and that your assets are managed according to your wishes, both during your lifetime and beyond. An Alter Ego or Joint Spousal or Common-Law Partner Trust (“Joint Partner Trust”) can help you do just that by minimizing probate tax, protecting your capital from potential undue influence and giving you the peace of mind that your finances are being properly managed. The purpose of this article is to provide you with some basic information on alter ego and joint partner trusts, discuss some of their benefits and drawbacks and outline some scenarios where it may be beneficial to use trusts of this kind.
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