Common Types of Trusts: Characteristics, Benefits and Disadvantages (ON)

Summary

This practice note explores the requirements, benefits and tax consequences of common types of trusts. It looks at the drawbacks associated with the expense and maintenance of an alter ego trust and the potential imposition of land transfer tax. It sets out the necessary conditions for a self-benefit trust, as well as the unavailability of benefits typically associated with other types of trusts. It sets out the essential requirements of a joint partner trust. It canvasses the differences between inter vivos spousal trusts and testamentary qualified spousal trusts. It examines the Henson trust, which is used to allow disabled beneficiaries to continue to receive government benefits related to their disability. Also discussed are trusts for beneficiaries receiving benefits pursuant to the Ontario Disability Support Program Act, 1997, S.O. 1997, c. 25, Schedule B, where disabled beneficiaries are exempt from potential disentitlement of benefits. It discusses family trusts and the way in ...