CRA indicates that charitable gifts by a spousal trust will disqualify it

S. 70(6)(b)(ii) requires that, in order for there to be a rollover to a spousal testamentary trust under s. 70(6), “no person except the spouse or common-law partner may, before the spouse’s or common-law partner’s death, receive or otherwise obtain the use of any of the income or capital of the trust.” CRA stated:

The mere possibility that a person other than the spouse or common-law partner may, before his or her death, receive or otherwise obtain the use of any of the income or capital of the trust is sufficient to disqualify the trust for purposes of the rollover under subsection 70(6).

Accordingly, the making of charitable donations by such a trust (which essentially were just a continuation of the gifts the surviving spouse had been making before the death of her husband) would disqualify the mooted spousal trust.

Neal Armstrong. Summary of 7 October 2022 APFF Federal Roundtable, Q.6 under s. 70(6)(b)(ii).