Advantages of Including Trusts as Part of Your Estate Plan Include:

• Transferring property for the benefit of others without giving up control by restricting who is to benefit from the trust.
  
  
• Administration of property for beneficiaries who are incapable of proper management of property for reasons such as minor age, infirmity or lack of business experience.
  
  
• Protecting assets from the claims of creditors of the transferor and the beneficiaries by giving the trustee discretion over the distribution of the trust property.
  
  
• Income and capital gains splitting among family members with lower tax rates, subject to certain restrictions.
  
  
• Passage of future growth to the next generation on a tax-efficient basis when combined with an estate freeze.
  
  
• Deferral of tax on accrued capital gains.
  
  
• Providing for future administration of assets to protect against future incapacity.
  
  
• Providing for charitable purposes.
  
  
• Reduction of probate fees on death, as trust assets are not part of a deceased's estate.
  
  
• Enhancing privacy on death, as trusts other than testamentary trusts are not subject to public probate.
  
  

The More Prevalent Types of Trusts are:

Alter Ego

Created by a person who is 65 years of age or older, provided that no person other than the contributor may receive any benefit from the trust during the contributor's lifetime.

Asset Protection

Used where a person is concerned about creditors, or an intended beneficiary is a spendthrift.

Charitable

Created as part of a charitable giving strategy.

Henson

Designed to protect assets from having to be expended before the Province will provide financial assistance for the long-term care of an incapable beneficiary.

Inter Vivos

Created during the lifetime of the person who contributes property to the trust.

Joint Partner

Same as an Alter Ego trust, with the exception that the contributor and their spouse may benefit from the trust during their lifetime.

Spousal

Provides that only a spouse is entitled to receive all the income during his or her lifetime and that no other person may benefit from the capital or income of the trust during the spouse's lifetime.

Testamentary

Created under the terms of a Will.