Testamentary trusts will be tainted if they become “beneficially interested” in an inter vivos trust
2 December 2013 - 11:32am
CRA has confirmed its position in 2011-0417391E5 F that any testamentary trust which becomes beneficially interested in a Quebec inter vivos trust (including it would appear by virtue of a mere potential to be named as a beneficiary by the trustees of the inter vivos trust from amongst a larger class of potential beneficiaries) will cease to qualify as a testamentary trust under s. 108(1) because the beneficial interest in the inter vivos trust represents property which has been contributed to it other than by testator as a consequence of the testator's death.
Neal Armstrong. Summary of 11 October 2013 APFF Round Table, Q. 5, 2013-0493671C6 F under s. 108(1) – testamentary trust.