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ARTICLE · 03 DECEMBER 2015

It's A Matter Of Trust – Part I

Collins Barrow National Incorporated
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In this two-part discussion, we will first introduce the nature and benefits of trusts in tax planning generally.

CanadaTax

In this two-part discussion, we will first introduce the nature and benefits of trusts in tax planning generally. Then Part II will discuss selected traps that can often be overlooked when undertaking tax planning that can make trust management a more complex process. Despite the popularity of trusts in tax planning, many taxpayers do not understand what a trust really is. More importantly, many do not know how to properly administer and operate a trust to achieve the desired objectives.

What is a trust?

A trust is a special legal relationship between three parties: the settlor, the trustee(s) and the beneficiaries. A trust operates to separate legal control and management of an asset from its ownership. It is not an independent legal entity. A trust must have all of the following three "certainties" to be considered a valid trust under the common law:

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