In my many meetings over the years, I often get to answer the questionWhat is a family trust? With rules changes in the mid-2010s, the question became more relevant as a tax planning tool for real estate investors, medical professionals, and business owners. Here is as quick summary to answer this question, and get you started on a conversation that could be key to preserving and growing your wealth.
Video Transcript: What is a family trust?
What’s a family trust?
I’m George Dube, saving the world from tax one bow tie at a time®.
I’m not going to provide what I would call a legal definition for this, but more how I try and explain it in my interpretation to clients.
And so I’ll start with, it’s this form of entity that is holding assets on behalf of beneficiaries of the family trust and the beneficiary, kind of loosely defined as someone who may receive the benefits of the family trust.
So in a stereotypical situation, we might have mom and dad that are through the family trust, controlling the assets, controlling the income on behalf of those beneficiaries. Later on, mom and dad can essentially as trustees, assuming that they are trustees, control and decide how they are going to distribute income, and assets on a go forward basis with that family trust.
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Resources
For additional resources related to this topic:
- Family Trusts: Ultimate FAQ for Real Estate Investors
- Family trusts for medical professionals: Saving taxes
- Paying kids to save taxes: Here’s how in Canada
More questions?
Still have questions? I want to help you Do wonderful things®, so please contact me today.
Remember – circumstances are unique! This information is summary in nature. Seek out advice from your tax advisor about your specific situation.
