Transfer assets to a Trust for a number of tax and non-tax reasons...

An entrepreneur or a business owner may wish to transfer assets to a trust for a number of tax and non-tax reasons.

Tax reasons include the desire:

(a) to transfer the tax burden from a high bracket taxpayer to a taxpayer in a lower tax bracket;
(b) to utilise the enhanced 750k capital gains exemption of various members of the family;
(c) to access the lower tax rates of a different province (such as Alberta at this time); and
(d) in the case of testamentary trusts, to multiply the ability to access the lower tax rates by using multiple testamentary trusts.

Non-tax reasons include the following:

(a) to set a mechanism in place to manage one’s property in the event of disability or incapacity;
(b) to protect property from the claims of creditors;
(c) to provide for disabled beneficiaries without jeopardising their government benefits;
(d) to provide for a person who is not able to look after his or her property by reason of minority, mental incapacity or lack of business experience;
(e) to give a beneficiary the benefits of property ownership without giving up control over the property;
(f) to provide for successive interests; and
(g) to avoid the application of provincial probate
taxes.

please do not hesitate to contact me via email at hugues.boisvert@andrewsrobichaud.com should you have any questions.