Chapter 16 Flashcards
This trust provision indicates the trustees are not required to treat the beneficiaries equally
Discretionary trust
A personal trust must file its income tax return within ___ days of December 31.
90 days
amounts that were not paid at the time of death that, had the person not died, would have been included in income when received; they are items that are earned but not received at the date of death.
Rights or things
The terminal tax return for a deceased is due by the usual deadline (April 30) or……, whichever is later. Since Greg died on November 15, his return would be due….
6 months after death,
six months from that date, i.e., May 15.
A type of inter vivos trust under which the settlor cannot cancel the terms of the trust and has no legal right to take back any of the trust’s assets.
irrevocable trust
A rule under which a trust must be taxed every 21 years, as if it had disposed of and re-acquired all capital property at fair market value. The rule is designed to prevent people from tying up assets beyond a certain period.
21-year rule
A trust whose terms are specifically written by the testator or settlor.
express trust
An estate that arises on, and as a consequence of, the death of a person. It remains qualified as such for no more than 36 months after the date of death.
graduated rate estate
Under Quebec’s Civil Code, a trust constituted for cultural, educational, philanthropic, religious, or scientific purposes. It is set up for the general benefit of the community rather than to generate a profit.
social trust
A beneficiary of a trust who qualifies for the disability tax credit or who is mentally or physically infirm. Only certain relationships qualify, such as that of a spouse or child of the settlor or testator.
preferred beneficiary
A trust used to donate funds to a charity under which the settlor can receive all income generated by the trust for their remaining lifetime. When the settlor dies, all remaining capital goes to the charity.
charitable remainder trust
A trust created by the testator’s will that arises at the testator’s death.
testamentary trust
Under Quebec’s Civil Code, a trust created for specific purposes, such as preserving property for a specific use. It can also be a trust constituted by onerous title.
private trust
Under Quebec’s Civil Code, a trust constituted for free to secure a benefit for a particular person (a trust established by a will or a gift). An example is a trust set up for the benefit of a spouse.
Personal trust
A type of inter vivos trust that can be undone by the settlor at any time. Undoing it may bring about negative tax consequences, depending on the nature of the property held in the trust.
Revocable trust
