To protect the life you have worked hard to build, it is essential to create a comprehensive estate plan. Trusts are a powerful estate planning tool that can offer flexibility, protection, and financial security for you and your loved ones. They can be used in a variety of ways, from providing an education fund for a family member to helping you reduce capital gains in the event of a death.
At Verhaeghe Law, our experienced Edmonton trusts lawyers are here to provide professional legal advice tailored to your specific needs. To schedule a consultation, contact us online or call our office in Edmonton at (587) 410-2500. With locations in Edmonton, Athabasca, and Whitecourt, we are ready to help clients across Edmonton and the rest of Alberta.
What is a Trust?
A trust is a legal arrangement and estate planning tool that is used to manage your organizational or personal assets and distribute them to selected beneficiaries. With or without a will, a transfer of your assets can happen through a trust. Depending on the type of trust you have put in place, tax implications for your assets may vary.
When creating a trust, you assign ownership of certain assets to a trustee and leave detailed instructions about how you would like assets to be distributed and managed amongst beneficiaries. Trusts may be written to take effect solely upon your death, or at a specific time while you are alive. Trusts can be used for a variety of purposes, including:
- Asset protection
- Tax planning
- Providing for minor children
- Providing for disabled family members
- And more
While the concept of a trust is fairly straightforward, creating a strategic trust can be complex. For example, when wills don’t exist, different types of trusts may need to be established. At Verhaeghe Law, our Edmonton trusts lawyers can help you navigate the complexities of creating and managing trusts, ensuring your estate is structured according to your wishes.
Benefits of a Trust in Edmonton
Establishing a trust in Edmonton and Alberta can have numerous advantages. By creating a trust, individuals gain the ability to safeguard and oversee their assets. Trusts can also offer:
- More privacy when it comes to the value of your assets
- Tax exemptions and savings
- Support for charitable causes
- More control over the timing of distributions
- And more
Under the Trustee Act, Albertans are able to create and handle trusts in an efficient manner with a lesser need to go to court. With reduced administrative duties for beneficiaries and a clear outline of trustees’ duties, this type of estate planning can be completed with the help of a family lawyer.
Types of Trusts in Edmonton
Trusts can come in many different forms, each serving a unique purpose. From asset protection to tax planning and providing for family members in need, you can choose the type of trust that best suits your needs. Our Edmonton trusts lawyers can assist with two primary trust types in Alberta.Â
Testamentary Trusts
The first is known as a testamentary trust. These are established within your will and become active upon your passing. Testamentary trusts are often used to provide for minor children or dependents requiring long-term care. Assets associated with a testamentary trust are considered to be part of your estate, therefore payment of applicable estate fees or taxes may occur. You retain the ability to modify your will and testamentary will by drafting a new one at any point. In Alberta, the conditions of a testamentary trust are set by the will or through a court decree.Â
Inter Vivos Trusts
Should the beneficiaries outlined in your will not receive their rightful portion as specified by the deceased, the testamentary trust might transform into an inter vivos trust. Any trust that is not classified as testamentary falls under the category of an inter vivos trust or a living trust. When it comes to living trusts, ownership may shift to the beneficiaries immediately upon creation. Additional properties can be incorporated into the trust at any time as well. As this transfer of ownership normally occurs while you are alive, the assets within the trust do not constitute part of your estate and are not subject to probate. An Edmonton trusts lawyer may be able to help you decide which type of trust is ideal for you.
The Government of Canada recognizes a variety of non-testamentary trusts, each serving a specific purpose. They include:
- Alter ego trust
- Communal organization
- Deemed resident trust
- Employee benefit plan
- Employee life and health trust (ELHT)
- Employee trust
- Environment Quality Act trust
- Graduated rate estate (GRE)
- Health and welfare trust (HWT)
- Hepatitis C trust and Indian residential school trust
- Insurance segregated fund trust
- Joint spousal or common-law partner trust
- Lifetime benefit trust
- Master trust
- Mutual fund trust
- Non-profit organization
- Nuclear Fuel Waste Act trust
- Personal trust
- Pooled registered pension plans (PRPP)
- Qualified disability trust (QDT)
- Qualifying environmental trust (QET)
- Real estate investment trust (REIT)
- Registered disability savings plan (RDSP) trust
- Registered education savings plan (RESP) trusts
- Registered retirement income fund (RRIF) trust
- Registered retirement savings plan (RRSP) trust
- Retirement compensation arrangement (RCA)
- Salary deferral arrangement (SDA)
- Specified investment flow-through (SIFT) trust
- Specified trust
- Spousal or common-law partner trust
- Tax-free savings account (TFSA) trust
- Unit trust
- And more
Inter vivos trusts can offer significant tax advantages, including the ability to income split and the reduction of executor’s fees and probate taxes. Along with lowering estate fees and upon-death taxes, they may also simplify the transfer of wealth between family members.
Contact Our Edmonton Trusts Lawyers Today
Our trusts lawyers at Verhaeghe Law recognize the potentially stressful nature of estate planning. We aim to address your case with care and diligence, while working to adhere to your particular needs. Contact our Edmonton team today online or by phone at (587) 410-2500 to learn more about how we can help you.