Help clients understand trusts

So you’re not an estate lawyer; that doesn’t mean you should steer clear of trusts. These legal structures can be powerful planning tools, allowing clients to reduce taxes, split income, and ensure their final wishes are carried out to the letter.

Demystifying trusts

Trusts are among the most effective estate planning tools. They have been a staple of estate planning in the common law world for centuries because of their unique structure and flexibility. Trusts have remained relevant because they easily adapt to various social and cultural changes.

Strategies for HNW clients

The demand for strategic wealth management in Canada is on the rise. Affluent Canadians are looking for advisors who can understand their complex financial and non-financial needs, beyond investment and financial planning.

Do’s and don’ts for advising trusts

Two lower court rulings in the Garron Family Trust et al. v. The Queen case established central management and control of trust assets, rather than the residence of trustees, as the key test for determining the residence of a trust. That threw a wrench into many tax-planning strategies based on sheltering capital gains in balmy Barbados and other tax havens.

“Puppet trustees” get another chance

The practice of sheltering income from Canada’s tax man by setting up what amount to nominal trustees in a tax haven like Barbados was dealt a severe blow in a recent court case. But the Supreme Court of Canada has decided to hear the case anew, a decision that may breathe new life into a common tax planning strategy among Canada’s wealthy.

Does your client hold prohibited investments?

If you have clients who own a hefty chunk of a listed company in their registered accounts, you’d better get on the phone with them—and a tax expert.

Inter vivos trusts help minimize tax

Trusts come in many shapes and sizes and can be used in a variety of ways to minimize tax. Here’s how to use an inter vivos trust (a trust created while the donor is alive to hold property for the benefit of others—usually family members) for income splitting.

Funding a child’s education

A good education doesn’t come cheap. Even when counting subsidies, the costs of studying and living as a student can reach a small fortune. So many parents look for ways to save for their kids’ education even before the children are out of diapers.

Beware the kiddie tax

One of the most popular methods of legal income splitting in the 1990s was to have a business owner issue shares directly or indirectly (via a family trust) to his or her minor children.

Save tax: Make vacation home a club

When Larry and Brenda came into my office to discuss the problems they were having with the family’s recreational property in Muskoka, I sensed that they were looking for a new solution to an old problem and that I just might have one.

Share wealth without the tax burden

Life insurance can be an effective way to transfer wealth from one generation to another. Here are some strategies to help affluent clients provide for their family members’ financial future, while allowing flexibility to meet unforeseen circumstances.

Income splitting from beyond the grave

One effective way to use a trust structure to minimize tax for an estate and its beneficiaries is to income-split by using multiple trusts in a will.

Testamentary trusts can be better than joint ownership

For someone living in a jurisdiction with high probate taxes, it can be a near knee-jerk response to hold valuable property jointly with a spouse or with one or more children, with a right of survivorship. While this arrangement may be effective to achieve a one-time saving on probate taxes, it may come at a substantial cost.

When does an estate exist?

The CRA is leaving no stone unturned in its hunt for revenue. The agency has begun automatically assessing penalties on taxpayers who fail to file Form T1135, the Foreign Income Verification Statement, on time. These are levied even if all foreign income was fully declared on personal tax returns.