We had a great response to our last article, Planning with Trusts as we Age, which discussed some of the benefits of using trusts beyond the age of 65. We received many great questions as well – the most common of which is when (if at all) is it a good time to set up a trust earlier in life. (more…)
When creating a new discretionary family trust to own shares of a private corporation, the question is always asked:
Who should the income and capital beneficiaries be?
After going through the usual list of parents, children and possible grandchildren, the naming exercise typically grinds to a halt. But what if a corporation (“BenCo”) was added as an income and capital beneficiary? (more…)
In our last post, we discussed the various types of shares and their ownership as part of our series on the mechanics of an Estate Freeze. You got the Opco Preferred shares at a frozen and fixed value of $10M and the Opco Voting shares for control. But, we stopped short on discussing who gets the Opco Equity shares. Remember, the Opco Equity shares are designed to benefit from any increase in Opco’s fair market value over and above the $10M freeze value.
In this third post of our series on estate freezes, we will discuss who should own the Opco Equity shares and how they should be held, directly or one step removed.
Recently, we were working with a group of tax and estate advisors executing an estate freeze of an Opco, together with the creation of a Family Trust (the “Trust”) to hold new Opco shares. When considering the terms of the Shareholders Agreement, the question was raised:
In addition to asking direct Opco shareholders, what if we asked the beneficiaries, trustee and protector of the Trust to sign a prenuptial, marriage or cohabitation agreement?
Imagine the reactions. Read on… (more…)