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A testamentary trust is, as its name suggests, established by a last will and testament. It is up to you to determine the duration and conditions of your testamentary trust, and to provide specific instructions regarding the administration and distribution of your assets. It allows you to ensure the professional management of your assets and to determine how they will be distributed, provided they have been included in the testament.
Following are a few situations where it may prove to be to your advantage to create a testamentary trust.
 | After your death, you want your assets to be managed in such a way as to produce sufficient income to maintain your spouse’s lifestyle. However, the principal will be preserved in its entirety to be transferred to children upon the death of your spouse.
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| You are bequeathing assets to a person who is a minor or is incapacitated and unable to ensure the management of the assets himself or herself.
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| You want to spread out the distribution of your assets among your children over time (for example, you want a first third of their inheritance to be paid to them when they come of age, a second third when they reach the age of 25, and the last third the age of 35).
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| You want to avoid that one of your heirs rapidly squanders the money you are leaving him. |
Given that a testamentary trust is considered by the authorities as a distinct fiscal entity, as a trustee, it is possible for us to split the income between the trust and the beneficiaries. This process allows the beneficiaries to receive income from the trust without suffering an increase in the tax rate applied to their income.
However, this tax advantage does not in itself justify the creation of a trust. For more details, contact your Desjardins Private Management team.
We are a trust company.
That says it all!
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