Kris Rossignoli, Cardinal Point’s Private Tax Manager, was recently featured in an article in the Financial Post about using trusts to protect your wealth.
A few highlights:
- A trust is a valuable financial planning tool that isn’t just for the wealthy.
- A legal arrangement, a trust holds money or assets “in trust” on behalf of someone who cannot manage them alone, like a child or an elderly person who is no longer able to handle his or her own affairs.
- In Canada, there are two broad types of trusts: testamentary and inter vivos.
- A testamentary trust is essentially an outline of how you want your assets divided after you die.
- An inter vivos trust can be in force while you’re still alive, and there are multiple forms.
- Rossignoli notes that many of Cardinal Point’s clients are using trusts to manage the use of vacation properties these days.
- While useful, trusts typically carry hefty fees for establishment and management.
- Income from trusts is also taxed at the highest marginal income rate.