Trusted Burlington CPAs Providing High Quality Estate Planning and Trusts Solutions
When it comes to protecting wealth, managing tax exposure, and ensuring a smooth transfer of assets to future generations, high-quality estate planning and trust services are crucial tools for navigating this complex scenario. Estate planning involves organizing one’s financial affairs, such as investments, real estate, business interests, and personal property, to achieve specific goals, including inheritance goals, taxation, and legacy preservation. A key component of this process is the use of trusts, which allow assets to be held and managed on behalf of beneficiaries according to predetermined terms. A trust can help minimize estate taxes, provide creditor protection, and maintain control over how and when assets are distributed, making them particularly valuable for estates with complex financial structures or intergenerational wealth.
When properly structured, trusts offer flexibility and long-term stability by separating asset ownership from direct control, which can be beneficial in managing family dynamics and safeguarding wealth. They can also provide tax planning advantages, such as income splitting and capital gains deferral, when implemented in compliance with Canadian tax laws. Moreover, trusts can be designed to support specific objectives, ensuring that the settlor’s intentions are carried out efficiently and with minimal administrative burden.
What is a Trust and How Can it Benefit Your Estate?
A trust is an established relationship in which a person gives money or property to a third party, the trustee, who then manages those funds according to the trust guidelines for the benefit of the trust’s beneficiaries. The trustee owes a legal duty to the beneficiaries of the trust to act in their best interest regarding the property they have been entrusted with.
Most trusts are either Inter Vivos trusts or Testamentary Trusts. The difference between the two lies in when the trust takes effect.
Inter Vivos Trust
Inter vivos trusts are created and put into effect during the creator’s lifetime. Often, these trusts are set up to take advantage of income splitting plans that allow family members to share income, thereby reducing the tax obligations for each individual. Trusts, like individuals, must track and file tax records and generally pay tax at the highest individual rate. For this reason, it is important to allocate trust income to the beneficiaries and ensure it is taxed through the individual.
Testamentary Trust
The terms of a testamentary trust are generally set out in a will and become active upon the testator’s death. Testamentary trusts are commonly set up to allow one person to earn income from the trust during their lifetime while allocating the principal to another individual after the initial beneficiary’s death. Such testamentary trusts are often applied when a person is married and has children from a previous marriage or relationship. A testamentary trust can allow the testator to provide income security for their current spouse after they die, while ensuring the principal amount will eventually pass down to their children after their spouse’s death.
The Trust Services to Meet Your Needs
At Edelkoort Smethurst CPAs LLP, our trusts experts have guided clients to determine the trust that suits their specific scenario. We take the time to get to know you and understand your goals for your wealth and legacy then help you make the decision that is most beneficial to your unique needs. We can provide insight on:
- Family Trusts: A flexible estate and tax planning tool, this trust holds and manages assets for multiple family members. Established by a settlor, who transfers assets to a trustee to manage according to the terms of the trust deed, Family Trusts are beneficial for business owners and high-net-worth individuals who wish to manage succession planning, reduce tax exposure, and ensure the long-term stewardship of family wealth.
- Alter Ego Trust: For individuals 65 years old or older, the settlor must be both the sole beneficiary during their lifetime and retain all rights to the trust’s income and capital. This trust allows assets to be transferred without triggering immediate capital gains tax, as the tax is deferred until the settlor’s death.
- Spousal or Joint Spousal Trusts: Designed to provide financial security for a spouse or common-law partner, these trusts also plan for the eventual transfer of assets to other beneficiaries, including children or grand children. A Spousal Trust typically reserves income and capital for the surviving spouse during their lifetime, with remaining assets distributed to other beneficiaries upon the spouse’s death. A Joint Spousal Trust extends these benefits to couples, taking effect while both spouses are alive and continuing after the first death. Both of these trusts offer tax deferral until the surviving spouse’s passing, helping to avoid probate while ensuring assets are managed and distributed according to the couple’s wishes, making them valuable tools for estate preservation and long-term financial planning.
Innovative Trust Services and Strategies
Edelkoort Smethurst CPAs LLP plays a critical role in the effective creation and administration of family trusts. Our fully licensed Chartered Professional Accountants work collaboratively with legal advisors to structure trusts that align with our clients’ unique financial and estate objectives while complying with all relevant tax regulations. We will assist you in identifying which assets should be transferred into the trust, preparing necessary financial statements, and ensuring that income and capital distributions are accurately tracked and reported. Through detailed tax analysis, our team helps minimize tax exposure and probate fees, allowing more wealth to pass to the next generation.
Beyond the initial setup, we provide ongoing support in the management of your family trusts and estate matters. This includes:
- Annual trust filings
- Preparation of T3 returns
- Valuation of assets
- Strategic updates as tax laws or family circumstances change
With a focus on long-term sustainability, we ensure that both the estate and the trust remain compliant, transparent, and tax-efficient, giving you the peace of mind that comes from knowing your wealth is protected and your financial legacy will continue for generations to come.
Contact Edelkoort Smethurst CPAs LLP in Burlington for Experienced Guidance on Estate Planning and Family Trust Solutions
Handling the finances of an estate is especially complicated, as those who are left to deal with these issues are often suffering a personal loss. At Edelkoort Smethurst CPAs LLP in Burlington, we understand how difficult this time can be and will take on the stress and pressure of managing estate finances and family trusts. In addition, we provide our clients with exceptional estate planning advice so that they can get on with their lives, secure in the knowledge that their families and businesses have been adequately taken care of. To speak with one of our knowledgeable Chartered Professional Accountants, please contact us online or by telephone at 905-517-2297.
