New & In the Spotlight: Introduction to Trusts Course

For Canadian tax purposes there are basically two kinds of trusts: testamentary and inter vivos. A testamentary trust is one that arises on and in consequence of an individual’s death. An inter vivos trust is any trust other than a testamentary trust. Trusts have been thrust into the spotlight recently with new tax filing requirements.  Knowledge Bureau has launched a new course to help advisors educate their clients. Here is a primer of what you will learn:

Trusts are not generally used for commercial enterprises in Canada, although advantages may exist in certain circumstances. Inter vivos trusts are frequently used as charitable trusts, unit trusts and mutual fund trusts

For Canadian tax purposes there are basically two kinds of trusts: testamentary and inter vivos. A testamentary trust is one that arises on and in consequence of an individual’s death. An inter vivos trust is any trust other than a testamentary trust.

An unusual feature of Canadian tax law regarding trusts is that a trust is deemed to dispose of its assets every 21 years at their fair market values, subject to some exceptions. This deemed disposition could result in capital gains taxable to the trust itself. Upon the deemed disposition, the trust is also deemed to have reacquired the assets at the new values. The tax policy theory is that trusts should not be available as vehicles for undue deferment of capital gains taxes.

One potential result of the revaluation is that the trust could become liable to pay tax even though it did not receive proceeds from which to pay the tax. To ease the potential harshness of this situation, the tax may be paid in ten annual instalments with interest at prescribed rates.

Individuals commonly use inter vivos trusts as vehicles to hold property for the present and future needs of other members of their families, often as part of estate planning arrangements. Special rules apply to a spousal trust, which is a trust established for the exclusive benefit of the maker’s spouse. Spousal trusts may be either inter vivos or testamentary.

The Introduction to Trusts course covers a holistic Introduction to Trusts, which provides the student with the skills to:

• Understand the basic of Trusts and learn how to explain them to clients;
• Become proficient in learning how to avoid probate fees using alter ego trusts and RRSP trusts;
• Reduce income taxes using charitable remainder trusts, estate freezes and testamentary trusts;
• Learn how to protect children from gold-diggers;
• Protect wealth from creditors;
• Learn how to safeguard beneficiaries from poor financial judgment using control designed trusts;
• Learn about helping clients with disabled beneficiaries;
• Learn about graduated rate estates and utilizing capital and business losses;
• You will also learn to identify opportunities and needs for insurance products as part of trust planning

Through a variety of Advisor Think Tanks and case studies, you will demonstrate the customization of a trust and responses to specific questions that clients ask.   

This course provides an extensive knowledge about the use of trust in tax and estate planning and is to be recommended as part of a background for a tax professional. It clearly spelled out the structure, advantages and disadvantages of each type of trust. The study cases give a valuable insight into handling a variety of situations where the establishment of a trust is warranted.

Course Content

• Chapter 1 | Basic Trust Mechanics
• Chapter 2 | Trusts as Mechanisms to Exert Control
• Chapter 3 | Basic Tax Treatment
• Chapter 4 | Testamentary Trusts
• Chapter 5 | Inter Vivos Trusts
• Chapter 6 | Charitable Remainder Trusts
• Chapter 7 | Alter Ego and Joint Partner Trusts
• Chapter 8 | Insurance and RRSP Trusts
• Chapter 9 | Spousal Trusts
• Chapter 10 | Trusts for Disabled Beneficiaries

Enrol online today and save $200 on tuition until March 15.