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A family trust is a legal relationship in which one person (the “settlor”) transfers property to another person (a “trustee”) to hold for the benefit of another person or people (the “beneficiaries”). The property can be money, real estate, business interests, or investments.
- What Is A Trust?
- What Are Some Different Types of Trusts?
- What Are The Income Tax Benefits of A Family Trust in Canada?
- Non-Tax Advantages of Having A Family Trust
- Don’T Forget About Filing Requirements
- How BDO Can Help
Unlike a corporation, a trust is not a legal entity, but a relationship between the trustee(s) and the trust’s beneficiaries. These relationships are set out in a trust agreement or deed. The trust agreement details the names of the initial settlor and trustees, the scope of their powers, the beneficiaries of the trust, and how the trust assets are...
An inter-vivos trust, as opposed to a testamentary trust, is a type of trust set up during an individual's lifetime. Testamentary trusts are trusts that are set up as a result of the death of an individual. This article focuses on inter-vivos trusts, which can be discretionary or non-discretionary. A discretionary trustgrants trustee(s) discretion ...
While many of the income splitting opportunities associated with inter-vivos discretionary family trusts were severely limited by the tax on split income rules, there are still advantages to having a family trust.
There are other non-tax benefits to using a family trust, including: 1. If the trust is discretionary, it is possible that assets will be protected from creditors or be excluded from family assets in case of a marital breakdown. This is due to the fact that a specific beneficiary may not be able to benefit from any assets held in the trust. 2. If t...
For trust taxation years ending on or after Dec. 31, 2022, all non-resident trusts that currently have to file a T3 return and express trusts that are resident in Canada, with certain exceptions, will be required to report additional information as part of their T3 return each year. For more information, read our article, New trust reporting requir...
Family trusts can be a very important tool for tax and financial planning, but the rules around them are complex. Contact your BDO advisor to see if one is right for you and how it can be used to meet your goals.
Jun 3, 2020 · What is a family trust? A trust, unlike a corporation, is not a legal entity, but rather a relationship between the trustees and the trust’s beneficiaries. These relationships are set out in a trust agreement or deed.
Feb 14, 2024 · Understanding Family Trusts Definition: A family trust is a legal entity created to hold and manage assets on behalf of beneficiaries, typically family members or loved ones. The trust is established by a settlor (the individual creating the trust) and managed by a trustee (the individual or entity responsible for administering the trust assets ...
Apr 11, 2023 · How to create a family trust. What’s the purpose of a trust? A trust is used to transfer the administration of personal or real property (like a house, shares or bonds) to another person (the trustee). This means that the property no longer belongs to the person who transferred it.
A family trust is set up to hold and pass on family property. It is typically used to reduce taxes and have family members in lower tax brackets realize the income. What is a trust?
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Sep 1, 2021 · What is a family trust? A family trust in Canada is a powerful tool for estate planning. You can use a family trust to reduce your tax liability as well as to transfer your wealth and protect your family’s assets.
