Types of Trusts

Testamentary Trust

A will is a testamentary trust. To learn more about wills, click here.

Inter Vivos or “Living” Trusts

These are trusts that are not testamentary trusts. These types of trusts are used mainly for tax planning and passing on wealth. Some examples of popular inter vivos trusts are:

• • Alter Ego Trust: the settlor is minimum 65 years old and is the only person entitled to receive all income that comes during their lifetime and only person to use income of the trust. This is a popular choice for tax reduction.
  • Joint Partner Trust: Similar to an “alter ego trust” however instead of just the settlor being able to use all income from the trust, their spouse or common-law partner has the right to do this.
  • Qualified Disability Trust: This allows a beneficiary living with a disability to receive a yearly allowance and reduce the affect it holds on their taxes

In addition to above, another estate planning method is to name a beneficiary in life insurance, TFSA, RRSP/RRIF and pensions. To learn more about who is a beneficiary, click here.

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