A Manitoba Court of Queen's Bench decision highlights to
importance of planning for all contingencies when setting up a
family trust.
The case of Shinewald v. Putter et al, 2014 MBQB 254
(CanLII) was an application under s. 59 of The Trustee
Act, C.C.S.M. c. T160 to vary the terms of a family trust to
add an income beneficiary. The main point at issue was whether the
variation could be made retroactive. Canada Revenue Agency opposed
this request and the court agreed with their position.
Sophie Shinewald had set up the family trust to hold shares of
her son Ed's corporation. Ed, his wife Sharon and their
children were all capital beneficiaries of the trust. Sharon and
the children were income beneficiaries of the trust but Ed was not.
The intention of the settlor was the Ed would benefit from the
income distributions made to Sharon.
