Protect generational wealth through tax reduction and estate planning strategies

Although most individuals and families will typically pass on wealth between generations through wills or gifts, in certain circumstances, trusts can be highly beneficial financial tool for tax reduction and estate planning.

Families and family-owned businesses commonly use trusts to:

  • Control and protect financial assets for minor children or special needs dependents
  • Protect wealth for family members who are not seen to be financially knowledgeable
  • Lower the family tax burden through income-splitting
  • Protect assets from claims against family law or marital regime claims
  • Confidentiality
  • Minimize probate taxes
  • Achieve specific retirement and estate planning goals
  • Maximize charitable giving

Your BlueRock financial advisor can work with your tax and legal advisors to determine what trust options are right for your financial, estate and tax planning needs.


How trusts work

A trust is a financial and legal framework used to hold property for the benefit of others (“beneficiaries”). Setting up a trust involves changing the legal ownership from the original owner (“settlor”) to the new legal owner (“trustee”).

Your role as settlor

When you set up a trust, you decide how it will be operated and create a trust document with all of these details. For example, you decide who the trustee(s) will be and how much power the trustee will have, as well as how long the trust will last. Your BlueRock advisor and a legal expert will work with you to draw up the trust document to ensure all aspects of its operation are clear and follow all applicable laws. You may set out the terms in your last will and testament or in a freestanding trust declaration or trust agreement.

The role of trustees

A trustee is obliged to make decisions and administer the trust in the best interests of the beneficiaries. In general, a trustee must:

  • Deal with different beneficiaries or different groups of beneficiaries fairly, without giving preferential treatment to one beneficiary over another.
  • Deal with the assets in the trust in a way that is in the best interests of the beneficiaries, even if the trustee would not normally do the same if the same option was available for his or her own assets.
  • Take full responsibility for the obligations of the trustee role, which means that the trustee cannot allow anyone else to make decisions about the trust, unless the trust document specifically allows this.

Your trustee should be chosen with great care. The success of the trust arrangement will depend on the level of competence of the trustee, and the relationship that the trustee will be able to build and maintain with the beneficiaries. In most instances, the trustee will require the assistance of an investment advisor for asset allocation, as well as legal and/or accounting professionals.

Types of beneficiaries

You as the settlor can identify in the trust document three potential kinds of beneficiaries:

  • Income beneficiary, entitled to the income of the trust in the form of interest, foreign or dividend income but no capital
  • Capital beneficiary, entitled to any proceeds from the sale of trust assets, dividends that are part of a corporate capital distribution or the proceeds of a share redemption, as well as to any of the original trust assets
  • A beneficiary entitled to both income and capital


Get expert help

Trusts come with a wide range of compelling benefits for tax reduction and estate planning, and there are many approaches you can take. However, once a trust is set up, it can be very difficult—and expensive—to make changes. It is vital that at the outset you obtain expert advice on all of the financial, legal and tax issues specific to the types of trusts you’re exploring to ensure your strategy is applicable, and that the trust document is worded correctly.

By working closely with BlueRock, you can have confidence that your team of professional advisors will help you implement a dependable plan that takes full advantage of trusts for your, your family and generations to come.


FAQs About Trusts

Our team at BlueRock Wealth Management understands that the financial industry is often confusing, and we are here to help you navigate it with confidence. One of the many things we can help you do is establish trusts for your loved ones. Below, we have put together the answers to a few of our most frequently asked questions on the subject to help you get a better idea of what trusts are and how they work.

What are trusts?

A trust is essentially a legal construct designed to let you hold property for the benefit of others, such as your children. This property can include things like real estate and financial assets. When you set up a trust, you will transfer ownership from yourself (the “settlor” in legal terms) to the new legal owner (the “trustee”).

Do I need a lawyer to set up a trust?
You should work with both a financial expert (like those on our team) and a lawyer to set up a trust. Our team can refer you to a lawyer, or we can work with the lawyer of your choice if you already have someone in mind. Either way, our team will help you determine exactly what you want the trust to do, how long you want it to last, and how much power you want the trustee to have, and then enshrine those details into the legal documents.
Why should I come to you when I want to create trusts?

Our team takes a holistic approach to financial planning—in other words, we’ll keep your individual goals and aspirations in mind whenever we advise you on your financial plan. We’ll make sure each decision you make, including the decision to establish a trust, furthers your big-picture goals.

At BlueRock Wealth Management, we can assist with trusts in the Southern Georgian Bay Region, including Collingwood, Creemore, Thornbury, and Wasaga Beach. We also serve most of South and Central Ontario, including Toronto, Oakville, Burlington, Kitchener, Waterloo, Guelph, Caledon, Barrie, Orangeville, Newmarket, Saugeen Shores, and Owen Sound.

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