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What is a Trust

Trusts are created as part of an estate plan in order to hold property for minors or seniors after death or to multiply the lifetime capital gains exemption for the preservation of wealth during your lifetime.

A testamentary trust is a trust which arises on the death of the testator and which is specified in his or her will. A testamentary trust gives the testator the ability to gift part of their estate to a beneficiary through administration by a trusted third person. A testamentary trust is an alternative to a direct or outright distribution of estate assets. It allows you to control the timing and distribution of assets to your beneficiaries. The assets held in the trust are invested and managed by the trustee of the trust, who distributes the income and capital to the beneficiaries in accordance with your wishes stated in your Will.

What is the Benefit of a Trust?

There are many different uses of a trust, whether it be to manage the trustor’s assets during life through a family trust or to manage one’s assets after death.

In terms of testamentary trusts which are established in your Will, because trusts usually avoid probate, your beneficiaries may gain access to these assets more quickly than assets that are transferred using a will.

In respect of inter vivos trusts which are established during your lifetime, a trust can multiply the lifetime capital gains exemption on the sale of shares of a private Canadian corporation or family business, thereby preserving wealth during your lifetime by obtaining a massive tax advantage.

Why Kalfa Law

At Kalfa Law, we work with you and your accountant to coordinate your estate and tax planning in order to prepare your trust or testamentary trust as part of your estate plan. We will guide you through the process and determine the optimal type of trust for you and your family.

Need an estate plan? We’re here to help ™.

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