Amendments to the Income Tax Act (Canada) in 2001
created specific estate planning opportunities for people who are
65 or older. Since then, the use of alter ego and joint partner
trusts has become a central component of many estate plans.
What is a trust?
A "trust" is created when property is transferred by
one person (the "settlor") to another (the
"trustee") to hold for the benefit of certain persons or
charities (the "beneficiaries"). Subject to tax and other
considerations, it may be possible for the settlor and the trustee
of a trust to be the same person. The settlor may also be a
beneficiary of a trust in some instances.
Alter ego trusts
An alter ego trust is a trust created by an individual who is 65
years or older. The terms of the trust must provide that the
settlor is entitled to all of the income that arises from the trust
property before his or her death, and only the settlor may receive
or obtain the use of the income or capital of the trust
