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Is There an Inheritance Tax in British Columbia? No, there is no official inheritance tax in British Columbia or anywhere in Canada. That means if you receive an inheritance, you generally don’t pay tax on what you receive.

Certain assets have built-in tax advantages or direct beneficiary designations, and adding a trust can alter or cancel those benefits. 

For example, registered accounts like RRSPs and TFSAs, life insurance policies with named beneficiaries, vehicles, and pensions are not the ideal fit for a trust. In addition, if you put your home in a trust, it may limit the principal residence exemption if the trust doesn’t meet certain rules.  

To find out more about trusts in Canada, keep reading.

When is the right stage of wealth to put assets in a trust?

Big milestones in life can often act as trigger points for creating a trust.

For example, a business sale, early retirement, receiving an inheritance, or realizing your estate will be far larger than you can ever spend are moments when people begin to think differently.

The focus shifts from accumulation to stewardship.

Ask yourself these questions as you begin the process: 

1 – What do I want my wealth to do? 

2 – Who should it support?  And, under what conditions?

3 – What risks am I trying to reduce?

Keep reading to find out when you should put assets in a trust.

There isn’t one “best” trust in Canada.

The right option depends on your wealth level, what you want to achieve, your family structure, and how exposed you are to taxes.

Different trusts also suit different goals.

For example, some trusts are better for probate avoidance, while others are better for managing powers of attorney or blended families.

To learn more about trusts in Canada, keep reading!

The biggest mistakes parents make when setting up a trust fund are not getting proper advice before setting up the trust and choosing the wrong trustee.

When a trust works well, it works really well.  

It is like a magic key that travels from this lifetime into the future, unlocking the legacy that you wished to leave. It ensures that your vision continues when you’re no longer here.

But for it to work, it has to be set up correctly. To find out more about how to use trusts the right way, read the full article.

Getting your financial affairs in order is critical, no matter your age. 

But estate planning becomes even more important as soon as you have kids.

If you’re in the process of getting your financial affairs in order, you be wondering what estate planning actually is and if you need it. That’s exactly what I’m going to cover in this post.

Keep reading for a story about my mom’s estate planning dilemma and why the emotional side of estate planning matters as much as the tactical side.

Is there a limit to how much money I can put in a trust? In Canada, there is no legal limit on how much money or how many assets you can place into a trust. The amount is not capped, but tax rules apply when assets are transferred into the trust.

In Canada, most personal trusts, such as family trusts, are subject to a 21-year deemed disposition rule under the Income Tax Act. The 21-year rule means that the trust is deemed to have sold its assets after 21 years. This can trigger capital gains tax unless assets are distributed or other planning is done.

I was recently speaking with clients who decided to use a trust as part of their estate plan. I want to share a little bit about why a trust worked for them so you can see if any of their goals and concerns align with yours.  This couple has a high net worth, multiple real estate properties, and investment portfolios. They want to pass their assets to their two daughters and future grandchildren.  Their goal was to transfer some of their wealth while they were alive and have a plan for how the rest of the assets would be distributed after their death. They chose to use a trust to retain control over when and how the assets are distributed…

The main reason to avoid a trust is if your estate is simple. You don’t benefit from the added costs and complexities if your estate is simple. In addition, if you don’t want to lose control of the assets, then a trust may not be a fit for you.