Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CCRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.
Principal Issues: When is a trust created under the terms of a will considered to have been created?
Position: Generally, on the death of the person who created the trust.
Reasons: A testamentary trust is defined in 108(1) to be a trust that, among other things, arose on the death of an individual. As a result, the general presumption is that such a trust is created upon the death of that individual.
XXXXXXXXXX 2000-005293
Annemarie Humenuk
November 14, 2001
Dear XXXXXXXXXX:
Re: Testamentary Trusts
This is in reply to your letter of October 13, 2000 concerning the date on which a testamentary trust is created, given the time required to complete the administration of an individual's estate. We apologize for the delay in our response.
Under paragraph 70(5)(a), a deceased taxpayer is deemed to have disposed of all capital property owned by the taxpayer immediately before death, and under paragraph 70(5)(b), any person who acquires such property as a consequence of death is deemed to have acquired those properties at the time of death. The person who acquires all or part of the taxpayer's property may be a testamentary trust. A testamentary trust is defined in subsection 108(1) as a trust or estate that arose on and as a consequence of the death of an individual, subject to certain conditions. Thus, as stated on page 7 of the 2000 T3 Trust Guide, a testamentary trust is generally created on the day that a person dies.
We trust our comments will be of assistance to you.
Yours truly,
T. Murphy
Manager
Trusts Section
International and Trusts Division
Income Tax Rulings Directorate
Policy and Legislation Branch
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