A recent entry in this blog introduced the topic of trusts. A trust can be an extremely useful part of estate planning, whether set up as a testamentary trust, which pays out after the death of the creator, or as a living trust, whereby the asset is passed along immediately. Either way, any Ontario resident, whether he or she is wealthy, or of more modest means, may find value in creating one or more trusts for one of the following reasons.
First off, anyone who has children from a previous marriage may wish to set up a trust. By doing so, it will be possible to guarantee support for the current spouse after passing away, and then allow the remainder of the estate to eventually pass to the children. Thinking of spouses, if financial planning is not his or her strong suit, a trust can be set up to allow a trustee to manage the money on the spouse's behalf.
A third situation where a trust will prove its worth is in the case of a physically or mentally disabled spouse or child. A trust can ensure a steady flow of money is dedicated to the support and care of that person long after the testator has passed. Similarly, a living trust can be enacted to provide a small income to, say, grandchildren, who can be paid in full at a specified date later in life. And finally, if one feels an estate is large enough to provide for the lifetime of his or her beneficiaries, it can be doled out in regular intervals and then the remainder left to a charity after the beneficiaries have passed.
As can be seen from these few examples, a trust is an extremely versatile part of estate planning. A trust can offer security and precision that a will might not be able to guarantee. In order to set one up, it may be a good idea to make arrangements with an Ontario lawyer who is skilled with estate law in this province.
Source: getsmarteraboutmoney.ca, "Using trusts in estate planning", Accessed on Jan. 21, 2017