Family trusts and wealth preservation trusts

A trust is an entity defined in the Civil code of Quebec which, although not having complete juridical personality, enjoys many of its attributes, notably an autonomous patrimony distinct of any of the trust actors, whether it be the settlor, the trustees or the beneficiaries.

Essentially, there are three actors in a trust: the settlor, the trustees and the beneficiaries.

The role of the settlor is essentially limited to the donation of property (usually non-income producing property with nominal value) to the trust expressing the intention that the trustees hold legal title to the property for the benefit of other persons (the beneficiaries). The settlor usually has no further role in connection with the trust or the trust property after the trust is settled. The settlor must be neither a beneficiary of the trust nor susceptible to becoming one. Usually, a family friend will act as settlor. In the specific case of an asset protection trust, the settlor shall be the person wishing to transfer a part of their patrimony in the trust for asset protection purposes.

The trustees manage the affairs of the trust and decide of any distributions of its revenues and/or capital at their discretion. A trustee may not act alone as such if they are also a beneficiary of the trust. A second trustee, who is not a beneficiary of the trust, must therefore be chosen.

As for the beneficiaries, they are entitled to receive revenue and/or capital distributions from the trust at the trustees' discretion. The beneficiaries will usually be the entrepreneur, members of their immediate family as well as any other person, company, trust, charity, etc. that they wish to be designated as such in the trust deed. It is also possible to designate additional beneficiaries after the trust is settled. This is done through an election mechanism for which an elector is designated in the trust deed. However, these elected beneficiaries must be specifically provided for in the trust deed either directly or indirectly, i.e. chosen from a defined category of persons such as the ascendants or descendants of any beneficiary. In the specific case of an asset protection trust, the person having transferred a part of their patrimony in the trust for asset protection purposes will usually be the only beneficiary of the trust.

How we help you:

Setting up the trust : we ascertain with you your present situation as well as your patrimonial and family objectives, the goal being to use your new trust in the most efficient manner.

Tax savings : before the actual setup of your trust, we will present you with financial scenarios of the tax savings generated by your new trust.

Turn-key solutions: we will be in close contact with your accountant and other professionals as well as with your financial institution in order to deliver a turn-key product.

Did you know that...

A trust is an indispensable tool for any person in the business world or simply having accumulated a significant patrimony, for asset protection purposes as well as for the multitude of tax savings which flow from such an entity?

Did you know that ...

A trust is an indispensable tool for any person in the business world or simply having accumulated a significant patrimony, for asset protection purposes as well as for the multitude of tax savings which flow from such an entity?

Conferences

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News

2017 September 7

2017 August 17

Publications

2016 February 9

Testamentary Trusts Lost Some of Their Shine on January 1, 2016

On January 1, 2016, several new rules applicable to trusts came into force. Can any of these new rules affect you?

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Team

Marc-André Beaudoin
Lawyer
Isabelle Caron Dorion
Lawyer / Tax Expert
Éric Forget
Partner , Lawyer / Tax Expert
Jonathan Haran
Partner , Lawyer / Tax Expert
Nader Khalil
Lawyer / Tax Expert
Sophie Rivest
Notary / Tax Expert
Benoît Therrien
Partner , Lawyer / Tax Expert
Robert Thiffault
Managing partner , Lawyer / Tax Expert
Michel Turcot
Partner , Notary