At Navigator Law, we can guide you through the process of setting up trust funds and estate planning.
Trusts are a useful tool in the estate planning process, and can also be used for long-term tax and financial planning purposes. Whatever your goals are, our Calgary law firm can help you understand the benefits of trusts and help advise you on which type of trusts can help you safeguard your assets and interests.
A trust is a fiduciary relationship in which one party, known as a settler, gives another party, the trustee, the right to hold title to property or assets for the benefit of a third party (the beneficiary).
Estate planning is important no matter the extent of your wealth, and considering trusts is an important part of the estate planning process. However, the transfer of wealth from your estate happens via a trust regardless of whether you have a will or not.
In Alberta, there are many benefits associated with setting up a trust. With a trust, you can better manage and protect your assets, for example by setting up a schedule for distribution of assets. Additional benefits from a trust include the privacy of asset values and tax advantages. Finally, a trust can prevent any legally compulsory succession of assets, so you have better control of who you want to inherit as well as mitigate any estate litigation.
Depending on the trust, it might include assets such as cash, investments, real estate, or life insurance policies.
A testamentary trust is set up in your will and takes effect after your death. The assets in a testamentary trust are considered part of your estate and are therefore subject to applicable taxes and estate fees. You can change the testamentary trust at any time by changing or modifying your will.
A living trust or inter vivos trust is a way to immediately transfer assets to beneficiaries. Since a living trust is created while you are alive, this type of trust is not subject to validation by a court, and you can add additional assets to a living trust at any time.
A living trust is a way for you to put assets in trust for yourself, family members, or loved ones to get tax advantages such as income splitting, minimizing executor’s fees and probate taxes.
There are many different kinds of living trusts, for example, employee life and health trust, joint spousal or common-law partner trust, RESP trust, and family trust.
An estate lawyer or trust fund lawyers can help navigate through the many intricacies of choosing the right type of trust, understand how trusts play a role in your overall financial and estate planning and properly drafting documents that reflect your goals around estate and financial planning that protects the interests of yourself and your loved ones.
Without professional legal advice, you run the risk that your will and estate plan may be challenged or even declared invalid.
Trust options are typically discussed in conjunction with wills and estate planning.
Our estate lawyers can help you prepare a properly executed and witnessed will that include provisions for setting up trusts. As part of the legal services related to estate planning, we will typically also discuss the details of your will, enduring power of attorney, and personal directive.
Once our legal team has a good understanding of your goals and your specific circumstances, we can provide you with personalized legal advice on which types of trusts might be beneficial for you and your family.
After having a conversation with you about your goals around setting up a trust and your future financial and estate planning goals, we will advise you on what types of trusts are right for you.
Trusts are complex to set up and have a number of tax and estate planning issues. Navigator Law has expertise in all legal areas associated with trusts and can make sure that you set up a trust correctly to achieve your estate planning goals and protect your assets.
For testamentary trusts, our legal team helps you draft or re-draft a will that includes the terms of the trust. The will will specify the assets held in the trust, the beneficiaries of the trust, trustees and their powers, the duration of the trust, and when and how the assets in the trust are distributed to beneficiaries.
The trust process varies, but this is the typical process for setting up a living trust on behalf of a client.
Do I need a lawyer to set up a Trust?
No, you don’t need a lawyer to set up a trust, but it might be a good idea to seek legal advice to ensure the trust is set up correctly and that you have considered all long-term financial and estate planning aspects of the trust.
Are funds in a Trust irrevocable?
It varies depending on the trust. Some living trusts are revocable, which means the trust can be changed at any time. Other trusts are irrevocable, which means the money or assets in the trust are no longer yours and cannot be changed. When setting up a trust, you should seek legal advice to make sure you understand the legal and financial implications of setting up a trust.
What is a lawyer’s trust account?
A lawyer’s trust account is different from a trust as part of financial and estate planning. A law firm uses a trust account for managing client funds, typically paid to them in the form of a retainer. The Law Society of Alberta sets out trust account rules around how the clients’ money should be handled in the trust account, trust accounting, and unclaimed trust funds.
