Private Wealth Planning
Date:
June 1 2002
Canadian trusts are used for many wealth planning purposes, particularly to pass assets to specific named beneficiaries outside of a Will. These types of trusts include family trusts, spousal trusts, alter ego trusts, joint partner trusts and self-benefit trusts. The labeling and distinction among the trusts arises from tax legislation. For all other purposes, they are “trusts” in the true sense of the word. Family trusts and spousal trusts have been used for many years, while the alter ego, joint partner and self-benefit trusts are relatively recent legislative additions to the Income Tax Act. The primary benefit of those latter trusts is that no capital gain is triggered (and therefore no income tax is payable) when a person transfers assets (such as shares) to a properly structured trust.
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