This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Help Your Kids Use Their Inheritance Wisely And Other Benefits Of A Trust

TORONTO, Sept. 19, 2012 /CNW/ - While a recent CIBC poll found 55 per cent of Canadians have a will in place, few have included trusts as part of their estate plan - vehicles that could potentially save them tens of thousands in taxes and speed up the transfer of assets.

Jamie Golombek, Managing Director, Tax and Estate Planning, CIBC Private Wealth Management notes that a trust is essentially a vehicle that allows a person to give assets to someone else (known as a "beneficiary"), but under certain terms and conditions, such as when funds can be spent and on what. The added benefit of a trust is that, for tax purposes, it is treated as a separate individual which may reduce taxes paid.

"Trusts are a valuable part of an estate plan to direct your money to the person intended, when intended, and for the purpose intended," he says. "For example, you can indicate in the trust document that the money in trust should be used to pay for school tuition and not to buy a sports car."

Two new reports on the benefits of including trusts in estate plans provide a number of reasons why people should consider trusts as part of an overall financial plan. Among those reasons are:
  • Pay less tax - a trust can save an individual up to $18,000 in tax annually compared to the individual personally owning the property held in a trust.
  • Decide how inheritance is spent - a trust can set out that an inheritance is to be spent wisely, such as for university tuition and not on something else.
  • Help loved ones get their money sooner - certain types of trusts can provide for a quicker transfer of assets on death since, unlike wills, trusts are not subject to the public probate process.

"While the rules for trusts can be complex, they can save you thousands of dollars every year while you are alive and ease the tax burden on your estate after your death. The single largest mistake in estate planning is failing to implement plans early enough," says Mr. Golombek. "Even among those who have included trusts in their estate plans, people assume it is most beneficial to transfer assets into a trust upon death. But in fact, it doesn't always make sense to wait until the end of life to transfer all of your assets. It can be a big mistake to overlook the benefits certain trusts can offer when assets are transferred during individual's lifetime."

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.75 -1.10%
FB $117.53 0.69%
GOOG $693.00 0.29%
TSLA $240.76 -2.81%
YHOO $36.61 0.06%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs