MortgageBroker mbabc.ca spring 2015 | 37
familytrusts
to avoid probate fees. is is because assets
held in a family trust fall outside of the
deceased benefi ciary's estate and there is no
requirement to probate those assets.
Privacy: A er your death or the death of
a benefi ciary, the deceased's will is likely to
be probated. is means that all relevant
documents, including the will and a list of
estate assets and their value, are fi led with the
courts and become a matter of public record.
A trust agreement, however, is a private
document that does not need to be disclosed
to other parties and the trust assets are not
included in the probate documents.
Succession Preservation: In British
Columbia, your spouse and children have a
right to challenge the distributions in your
will if they feel that they were not adequately
provided for. is exposes your estate to
potential litigation and the variance of your
wishes a er your passing. A properly dra ed
trust agreement may preserve your wishes
since the trust assets do not form part of
your estate.
Safeguarding Disability Benefi ts: If a
benefi ciary is eligible for certain disability
plan payments, it is possible that those
benefi ts may be decreased or diminished
if that benefi ciary acquires other assets
or income over a certain amount. A
discretionary trust may allow a benefi ciary
to receive income from the corporation
indirectly, without aff ecting his or her
rights to disability benefi ts.
With all of the above advantages you are
likely asking: Why doesn't everyone use a family
trust? For a trust to be eff ective it must be
properly established and maintained from both a
legal and accounting perspective. is, of course,
takes time and costs money. Before making
any decisions about whom the shareholders for
your business should be, we highly recommend
you conduct a cost benefi t analysis with your
company's accountant and lawyer.
Magda Grala is a lawyer with Waterstone
Law Group LLP, specializing in corporate
and commercial transactions. e article is
intended for information purposes only and the
information is subject to change.
For a trust to be
eff ective it must be
properly established
and maintained from
both a legal and
accounting perspective.
This takes time and
costs money.
