Family Law Relationships Flashcards
What is joint tenancy?
Two or more individuals hold single title to a property
-rollover to other at death
What is tenancy in common?
- separate title
- passes to estate at death
What property is subject to division?
-assets acquired during the relationship and family assets(owned by spouses)
What is excluded from family property?
- gift or inheritance
- damages for personal injuries
- life insurance proceeds
- property agreed to in domestic contract
Who are the parties to a trust?
- settlor
- trustee
- beneficiary
What is beneficial ownership in a trust?
Person who owns property and transfers to trust.
If ownership changes, there’s a disposition (unless rollover applies)
How is income treated in a trust?
- either allocate it to beneficiaries or trust pays tax
- T3 is issued
How does a rollover apply to a trust?
Same as if there were no trust
- spouse or common law as beneficiary
- if any other beneficiaries are added to the trust then the rollover would no longer apply
At what rate is a trust taxed?
Top marginal rate
What is the GRE?
When taxpayer does, the Estate is considered a trust
- graduated rates like an individual
- 36 month window to use GRE
What is a qualified disability trust?
Testamentary trust that is created for the benefit of a disabled beneficiary
-the upside is that it is taxed at the GRE annually vs top MTRs
What is an alter ego trust?
When settlor and beneficiary are same person
- used to protect assets
- bypasses 21 year rule if settlor is over 65
What is a spousal trust or common law partner trust?
Designed to benefit the spouse
Settlor must be 65 or older
Spouse can be the only beneficiary
What is a joint spousal trust or joint partner trust?
Combines both alter ego and spousal trust
- settlor and spouse are both beneficiaries
They can be the only beneficiaries
Must be 65 and older
What constitutes marital breakdown?
1 year of separation
Adultery
Cruelty
What are the two types of domestic contracts?
Cohab agreement - not married
Marriage contract - married
How do you calculate the substantial presence test?
Current year: all days counter
Last year: 1/3 days are counter
Two years ago: 1/6 are counter
If more than 183, person is deemed US person for tax purposes
What is the closer connection test?
If spent less than 183 days in US in the current year, you demonstrate that you have a closer connection to Canada
How are minor beneficiaries taxed in a trust?
Only taxed in capital gains (interest and dividends are attributed back)
If kids get dividends from CCPC, they are subject to kiddie tax
What CANT be dealt with in a cohab agreement?
Child support/custody
