Trusts

Total 218 Posts

When Business Agreements Masquerade as Trusts

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Trusts are tricky – they can arise in circumstances where none of the parties involved ever use the word “trust.” There is good reason for this; often the settlor of the trust and the trustee are laypeople who can describe the type of relationship they wish to create, but are unaware of the legal terms to describe it. If a lawyer does become involved, she will likely set the terms….

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Trustee, Trusts

It is Not My Deed: How a Party Can Void a Trust Agreement

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One way for a party to set aside a trust agreement is by arguing that the settlor of a trust made a mistake about the trust. The concept, often found in contract law, is known as non est factum (note that a trust deed can be seen as a contract). The doctrine applies where there was both a mistake made in the execution of a contract, and the party was actually in error about….

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Trusts

Serving the Charitable Purpose

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I want to float a trial balloon about charitable trusts. A clause stipulating that a trust should be limited to using income for charitable purposes, meaning that capital is untouchable, should be viewed as an administrative clause and not part of the charitable objects. The charitable purposes of the trust may be perpetual, but making the trust “income only” is a historical drafting convention that no longer serves the charitable….

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Estate Planning, Philanthropy/Charitable Giving, Trustee, Trusts

INCOME FROM A U.S. TRUST: CAN IT EVER BE TREATED AS DIVIDEND INCOME?

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Sometime ago, a relative of a Canadian taxpayer died in the US and she left her money in a charitable trust, with some of the income bequeathed to the Canadian taxpayer annually. The trust income is derived mostly from US dividends. With a series of proposed adjustments to her personal tax returns, the taxpayer asked the Canada Revenue agency (“CRA”) why this income could not be treated as dividend income….

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Canada Revenue Agency, Canadian and US Tax Treaty, Estate Administration, Estate Planning, Interest, Investments, Tax Issues, Trusts, United States, US Taxes

ESTATE PLANNING REFRESHER: TRANSFER OF LIFE INSURANCE

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From time to time, we are asked about the tax consequences of transferring life insurance policies particularly in the context of some common (or not-so common) estate and trust planning scenarios involving transfers. As most people know, when a transfer of ownership of a life insurance policy occurs, the transferor reports a taxable gain, which is essentially the proceeds of disposal less the transferor’s’ adjusted cost basis (ACB) in the….

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Business Succession Planning, Canada Revenue Agency, Estate Administration, Estate Planning, Guardianship, Insurance, Spouse, Tax Issues, Trusts
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