FEATURE
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Supreme Court of Canada decision Valard
Construction Ltd. v. Bird Construction Co.
While the changes might see some indivi-
duals reluctant to disclose this information to
the government, "it does not otherwise alter
who is legally entitled to this information,"
she says.
"Generally, we already encourage full dis-
closure in terms of ensuring that beneficiaries
are aware of their interest in a trust, whether
distributions are ongoing or have yet to take
place and whether that beneficiary's inter-
est is vested or contingent," says Popovic-
Montag. "Trustees may have greater reason to
err on the side of full disclosure as a result of
the new rules."
In terms of estate planning, Popovic-
Montag says, wills remain "the most common
tool used by clients" regardless of the fact that
these documents often become part of the
public record upon the filing of an applica-
tion for a certificate of appointment of estate
trustee with a will.
For these reasons, Popovic-Montag says,
the new reporting obligations for trusts
"may not have a significant impact on how
Canadians use these vehicles to manage and
transfer wealth."
FOCUS ON WILLS, TRUSTS & ESTATES
As the new reporting obligations take
effect, she says, the firm intends to "incorpo-
rate a reminder in our standard reporting let-
ter to clients who are acting in the capacity of
trustee that tax advice needs to be obtained,
regardless of whether trust assets are gener-
ating income."
"It's one more thing that needs to be done
in a compressed time period," O'Sullivan
agrees.
"It'll be quite important for this informa-
tion gathering to happen earlier rather than
later so people are ready when the first tax
returns need to be filed in 2021."
