CRA indicates that the right of the bare owner of property, subject to a usufruct in favour of a surviving spouse, to dispose of his bare ownership does not preclude a spousal trust

The will of the Quebec deceased bequeathed the usufruct of rental property to his spouse and the bare ownership to his adult child, thereby giving rise to a deemed trust under s. 248(3) (the “Trust”), and a mooted spousal trust. CRA stated:

[W]here the will provides that no person other than the deceased's spouse or common-law partner may, before death, receive any part of the income or capital of the Trust or otherwise obtain the use thereof… the fact that the will does not prevent the bare owner from disposing of his or her right should not, in and of itself, cause the condition in subparagraph 70(6)(b)(ii) to not be met.

Neal Armstrong. Summary of 20 April 2017 External T.I. 2016-0672501E5 Tr under s. 70(6)(b)(ii).