Bob GauvreauAsk Bob Gauvreau Questions Based On His Training

Setting Up a Trust #shorts

17 Jul 2023 · 1 min

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Short explainer by Bob Gauvreau about what a trust is: a legal agreement (not a separate legal entity or individual) that files its own tax return (T3). He defines key roles—beneficiaries, trustees, settlor—and highlights that trusts help transition future assets and can minimize tax by splitting income among beneficiaries.

Questions this video answers

No — the speaker describes a trust as an agreement, not a separate legal entity or an individual.

A trust files a T3 (a trust return).

Donate something to the trust (i.e., transfer assets) so the trust comes into existence.

Chapters

What is a trust? Well, it's actually not a separate legal entity. It's not an individual. It's actually just really an agreement. But it does have a separate tax filing called a T3 or a trust return. Who are the beneficiaries? We're not owners, we're not shareholders. It means that someone inside this trust who's a beneficiary is entitled to receive any of the earnings or wealth accumulated through from the ownership of this agreement. Trustees are essentially the people who are in charge of the direction of the trust. A settlor is someone who essentially engages the trust to be active. Typically, they have to donate something to the trust in exchange for the trust to be in existence. Using a trust definitely gives us opportunity for transition of future assets, future net worth, and also the minimization of tax along the journey as we can split it with our multiple beneficiaries.