Alter Ego Trust (BC)

Summary

This precedent is an alter ego trust, which permits taxpayers 65 years of age and over to bypass the probate process and, in some situations, avoid wills variation claims. This trust has been drafted to meet the requirements specified under the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.). It includes practical guidance, drafting notes and optional clauses. The alter ego trust bypasses the probate process where all the settlor's property that would otherwise require a Grant of Probate is held by the trustee. At the settlor's death , the trust property passes to the beneficiaries under the terms of the trust without reference to the settlor's will. The trust has the added benefit of providing some incapacity planning: the trustee manages the trust property for the settlor, if the settlor subsequently suffers from a mental incapacity. Where the settlor is the initial trustee, as is often the case, the replacement trustee will assume management of the trust property upon such incapacity....