What is a bare trust?

From time to time we encounter clients that have various types of assets held by a trustee (Trustee) that are purportedly held pursuant to a bare trust (Bare Trust).  There are several questions which usually arise in relation to the rights and obligations of the parties involved that inevitably end up with Dundas Lawyers considering the taxation issues, (in particular the capital gains tax implications, for the Trustee. [Read more…]

What is a Testamentary Discretionary Trust and why would I want one?

A traditional will leaves the estate to the beneficiaries equally, and contains further instruction in the event of the beneficiaries predeceasing the testator.  It may also contain specific bequests requests relating to the testator’s personal property.

This will, while effective an effective estate planning tool for those in uncomplicated circumstances, leaves the inheritance open to the creditors or ex-partners of beneficiaries in the event of financial difficulty or relationship break down.  There are also be adverse tax implications if a beneficiary invests their inheritance; if the beneficiary is earning other income, the income from the estate investment is taxed in addition to the beneficiary’s marginal tax rate. [Read more…]

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