New Trust Tax Rules May Impact Retirees

[@debbiegodfrey2359]

I called CRA to ask about my situation and was told “ I can’t tell you if you have a bare trust”. Then, every question I asked was answered with a question. I was referred to the trust information document. Clear as mud.

[@WalhoutFinancial]

Ugh, so frustrating. According to a study performed by the Auditor General in 2017, the CRA operators give the wrong or incomplete advice about 30% of the time. Best to speak to a CPA accountant. See here from the Auditor General's report in 2017 - www.cbc.ca/news/politics/cra-call-centre-auditor-general-1.4412061

[@AWARHERO]

The Federal government asking Canadians to be fiscally compliant.... Oh the irony.

[@Nathan-us4qs]

the MOST clear video so far, thanks

[@WalhoutFinancial]

Thanks Nathan!

[@bradzimmer239]

This government really is messed up.

[@stanmatej35]

Mark , good job explaining the new cra trusts reporting...I feel the cra is obliged to send each Canadian the new rules / requirements for Trust reporting ! facts not just hear say ?

[@WalhoutFinancial]

Thanks Stan. I agree, it's a minefield for most Canadians. I hope they either scrap these rules, or at least delay meaningfully with some clearer guidelines soon.

[@canadiangirl810]

I find it crazy that I haven’t heard of these new trust rules stated anywhere in mainstream media or some kind of delivered pamphlet to Canadians.. How does CRA expect people who file their own taxes to be aware of this? Also, if I have to file a T3 to according to these Bare Trust rules, does that actually affect my tax return/payment for last year? Or is it just a matter of CRA wanting to keep tabs on our finances? Thanks

[@WalhoutFinancial]

No, the new filing requirement for bare trusts does not impact your taxes owing in and of itself. If there was a taxable event (ie. if the property in the bare trust was sold and a capital gain was realized), it would need to be reported as such on the tax return of the beneficial owner. But, this is not new - it's always been this way. As you mention, this is primarily to create more visibility for the CRA about who owns what.

[@clower26]

My home is in the name of me and my adult daughter who lives in the same house. She now is on disability but we make decisions jointly for the home.

[@WalhoutFinancial]

This is a tricky one. I would recommend speaking to an accountant and lay out all the facts. If your daughter is co-owner of the house in every sense, meaning she acquired her share of the house or she was gifted her share (and it was documented), there is likely no bare trust filing requirement. If, however, your daughter is on title for convenience purposes only and she was not gifted her share of the property, this may be considered a bare trust situation.

[@user-tm3ok3np7p]

Might as well ask CRA if they could give us an allowance after they tax us into oblivion

[@terencesayers3478]

You mean Universal Basic Income? Unfortunately that might become a reality the way this Lib government is going.

[@jwilliams5256]

Have to report birthday cards soon.

[@WalhoutFinancial]

😄

[@ryanm7171]

I appreciate your detailed and thorough video on this topic. I truly believe it is the best I have seen so far. Fortunately, CRA has axed the requirement for this year, but they may reimpose it next year. I just wanted to get a second opinion. My mother and I are joint on most of our bank accounts and non-registered brokerage accounts, most over 50K. We set them up jointly when we opened them day one, or as soon as possible, not later for convenience or probate reasons. She has no spouse, and I have no other siblings. We are both disabled and have lived together all our lives. Furthermore, we don't require each others permission to access or make decisions regarding those accounts. Obviously, we have already stated in our wills that we are each others sole beneficiaries regarding all our assets, including our other registered assets. Should you require any additional info, please ask. would appreciate your opinion.

[@NetKnowHow1]

No filing for Bare Trust for 2023 year. The requirements were changed a few days ago. It is on the CRA page.

[@WalhoutFinancial]

Thanks, I did an update video on this topic a few weeks ago.

[@themetadaemon]

I can't get any answers from CRA on how to identify, let alone report on these trusts, so I'm just reporting those indicated on any T3 forms I receive. If they don't know what a bare trust is, how can I?

[@WalhoutFinancial]

Sadly, the CRA operators are often under-trained and incorrect in their advice. The CRA has come out in the past couple of weeks indicating they won't be enforcing penalties and fines for failure to complete bare trust filings this spring. I recommend speaking to a CPA and getting help with it. If you want to try it on your own, my friend Aaron Hector completed a full video walking through how to do the T3 filing - kzbin.info/www/bejne/bKW0eWZ3nLWaoqMsi=PMIs-FyDaCjhB8vU

[@russelltrudeau]

Hi Mark. This is very helpful. I am the trustee for my brother’s investment portfolio, established after our dad’s passing. It is a simple In Trust account. I have no control over it, just oversee the investments and make sure taxes are paid on the revenues to him. He has filed taxes every year. How do I file the T3 and not pay taxes myself? Otherwise this will be double taxation? This is stressing me out so much! Thanks

[@WalhoutFinancial]

I recommend seeking the opinion of an accountant on this, Russell. If the in-trust account value was over $50,000 at any point during the year in 2023, and the account contains any non-exempt securities, there is a filing requirement. Here is an article with a link to the exempt securities, about 2/3 of the way through the article. www.bdo.ca/insights/old-trusts-new-trusts-hidden-trusts-what-the-new-trust-reporting-rules-mean-for-you

[@stevewong5699]

CRA had announced on March 28 2024 that 2023 Bare Trust T3 Reporting is not required this year. PLEASE update this session. Next year may be required. Thanks.

[@WalhoutFinancial]

Thanks Steve. I am posting an update video today. It's been a busy week! :)

[@healingsun5654]

Thank you Mark for bringing this to our attention. Things have become so complicated now for just doing our yr end taxes. And the govt sticking their noses further into our business is so depressing.

[@WalhoutFinancial]

Yes, it has definitely created a minefield for Canadians who have pretty simple situations.

[@ES-ge7bb]

When are the courses being offered? They should be paying us to do all this work. We’re working for them!

[@ericfielding668]

Thanks for pointing out the December CRA update re bare trusts having a bit more breathing room this year.

[@WalhoutFinancial]

Yes, I think the CRA knows this rule change is a minefield. I hope and expect that they will release more guidance as the deadline approaches. As I learn more I will share it here.

[@ericfielding668]

All the people I know of in retirement homes have 'cash accounts' to help pay for various activities. Are these comfort accounts bare trusts? The funds are well below $50K per resident, but they are not deposited in any bank account, so it would appear the $50K exemption wouldn't apply. That would ba a lot of T3 returns to file - one for each resident. And for what purpose?

[@WalhoutFinancial]

@@ericfielding668 Hi Eric. A bare trust scenario would only exist if the retirement resident in this case added a third party (not their spouse, but maybe an adult child) to the bank account. Going back to the definition of a bare trust - a bare trust exists where the trustee (ie. the adult child) has legal title, but the beneficial ownership is held by the beneficiary (ie. the retirement resident). Unless all of these retirees have added an adult child or a friend to their accounts as a joint owner, I don't think there will be anything to worry about. Again, I expect more guidance to come out from the CRA as the deadline approaches because this is going to create a lot of work and headaches, and almost certainly churn up a lot of information requests going into the CRA.

[@Cableman-hr2uu]

one thing which is not understandable is from the time 6m27s when a child's name is added to a parent's property, how to define it is a trust or not ? what I understand is when a child's name is added to the property as joint tenancy, the parent already provides the child the power to operate on anything as related to the house and it is not a trust, this part is rather difficult to understand. Hope somebody can explain more detail on this part.

[@WalhoutFinancial]

If a child is added as a joint tenant, that means that there was an actual gift of a portion of the property to the child. The child has been given a portion of the house and that portion is now the child's property. They have legal AND beneficial ownership of the property. This scenario is not a bare trust. In most cases though, adult parents do not mean to "gift" a portion of their house to their adult kids. They are simply adding the kids to try to avoid probate. This scenario is a bare trust because the children have legal ownership of the house as joint owner but they have no beneficial ownership. The house still "belongs" to the parent, and the child has simply been added as a matter of convenience to avoid probate. I hope this helps.

[@carolline3268]

Does the Trustee or Beneficiary or both need to file the T3? or can I as a beneficiary file? As a beneficiary i am worried that the trustee will not file and i will incur penalty.

[@user-es8kf7ni6t]

Lots people havnt heard about this bare trust not fair cra should have sent paperwork out for canadians

[@WalhoutFinancial]

Agreed, it is very frustrating.

[@Mooseracks]

Does joint ownership constitute a bare trust? Why is thw CRA so adamant in knowing private business of families

[@WalhoutFinancial]

not sure.

[@scotcam1940]

I have my son on the Deed of my home and on my Bank account. I am 84 and wonder if these two situations require the T3 Slip. My son is also listed on my Will with his brother as beneficiaries of my entire Estate.

[@WalhoutFinancial]

HI Patricia, almost certainly yes your son has a filing requirement. Certainly for the house, and possibly for the joint bank account.

[@user-yy1om3wm1b]

Thank you for your video. I have full access to my parent's bank account and do not need their cosent to operate the bank account. In this scenario, is it considered a bare trust situation?

[@WalhoutFinancial]

Yes, if you are named as a joint owner. And the value at any point during the year in 2023 was above $50,000 you have a filing requirement.

[@ES-ge7bb]

@@WalhoutFinancialI thought you had to report only if you needed their consent. Confusing

[@WalhoutFinancial]

@@ES-ge7bb It is for sure. The simplest way to think about it is this. If you are named on the account but your parents didn't give it to you as a gift, meaning it is understood that the money is theirs, it is almost certainly a bare trust with a filing requirement. The need for consent doesn't change that.

[@ES-ge7bb]

​@@WalhoutFinancial If they gave it as a gift, then it wouldn't be joint with them. i.e., any joint with parents or kids appears to automatically be considered a bare trust, no?

[@WalhoutFinancial]

​@@ES-ge7bb Almost always, yes. I suppose it's possible it would NOT be considered a bare trust if the parent wrote out a signed and witnessed letter outlining that 50% of the account value was being gifted to the adult child, and then claimed any capital gains that arose from disposing of 50% of the account on the parent's tax return that year. This almost never happens, so bare trust is the most reasonable assumption by default.

[@sandyp8781]

I have the non registered mutual funds with my own name on it. Why I still received the T3 statement of trust income allocation and designations?

[@WalhoutFinancial]

Hi Sandy, this is normal. Mutual funds are trusts, so it is mandatory for the fund to issue T3 slips for income generated by the fund during the year so that you can complete your personal income tax filings.

[@michaelaltman7308]

I haven’t been able so far to get a straight answer on this particular question: are joint bank accounts, GICs etc… between a husband and wife exempt from this requirement? Is a house owned jointly by spouses and lived in as a principle residence, exempt? I think so, but no one has been addressing it explicitly. (Liked your video.)

[@WalhoutFinancial]

Thanks for your question, Michael. The presumption of advancement exists between husband and wife. That means, when one spouse puts property in joint name with another spouse, in the eyes of the law the intention was to share legal AND beneficial ownership. Therefore, no trust exists and in my opinion, no filing requirement exists. Good idea to call your accountant and verify though.

[@dorothydecesare1607]

@@WalhoutFinancial Now what about parents who have their name on an adult child’s chequing account ( throwback to when adult child was a minor ), please consider Both cases of less than $50 K going through the account and more than $ 50 K going through the account at any point in 2023. Thanks in advance. 😊

[@WalhoutFinancial]

@@dorothydecesare1607 hmm that’s an interesting one. I think that the rules would apply the same way in that scenario. If the account held over $50k at any point during the year, I think a trust filing requirement exists here. I recommend speaking to your accountant about your specific situation.

[@leanderrowe2800]

When my daughter was a minor (born 1984), I set up an investment account in trust of her and followed the rules of attributing capital gain/loss to her and all income and dividends to me. When she reached 18, it became a joint account (she and I). Since the assets were in trust for her, she claimed the capital gain (it's actually a net capital loss so far), income and dividends. However I manage the account investment. From your video, I understood it's a bare trust and the trustee needs to file the form. My question is : who is the trustee ? Is it me or my daughter ? Sorry it seems like a stupid question but I am truly confused. Thank you for your video and your reply. 😊

[@WalhoutFinancial]

You are the trustee.

[@leanderrowe2800]

@@WalhoutFinancial Thank you Mark for your reply. 😊

[@rtel123]

At the 11th hour on March 28 the CRA CANCELLED the plan for 2023! Please adjust this video.

[@WalhoutFinancial]

Thanks. Check my latest video 😎

[@susanemmons9934]

My husband and I have a spousal trust and submit T3's annually. The trust 'owns' 99 percent of our spousal home. The remaining 1% is still owned by my husband and me. Does this mean we also have a bare trust?

[@annetteandersen9307]

Are cashable GICS included in this and so my understanding if you have full access to an account with an adult child then it’s not a bare trust. If either they or I can close out an account then to me that isn’t a bare trust- just a joint account per se. Or if you are listed as a POA at a bank account that also isn’t a bare trust

[@WalhoutFinancial]

Hi Annette, the ability to access doesn't change whether a bare trust exists or not. The test is - is there a separation between legal ownership and beneficial ownership. A POA is not a legal owner, they are merely an agent of the legal owner, so no bare trust in that scenario.

[@margaretscott8395]

Who is responsible for the reporting of a Bare Trust if there are two names on a account?

[@WalhoutFinancial]

The trustee is the responsible party. So, in the example where there is an adult child added to an account where the parent contributes all of the money and controls the account, the child is the trustee.

[@margaretscott8395]

@@WalhoutFinancialThen my son would be the trustee but lives full time in Japan as a permanent resident there with his family. Would I then be responsible for reporting?

[@WalhoutFinancial]

@@margaretscott8395 Hi Margaret, I recommend reaching out to an accountant and getting an opinion on the specifics of your unique situation. I can't see why a non-resident would be exempt from the new rules, but I could be wrong.

[@johnm24]

Hey Mark, keep up the great content! Just a little confused, so if I'm on my parents' accounts, I understand that according to the new guidelines, it is a bare trust if the accounts hold over 50k. That being said, if they do, what are the tax implications for myself, if any? Is it just a matter of reporting? Thanks!

[@WalhoutFinancial]

Hi John. At the moment, the only requirement is to report the bare trust on a trust tax return. There is no tax owing for you, the trustee. There may be tax owing for your parents if they earned interest, dividends, or capital gains but that is no different than previous years. Thanks for watching!

[@xxxh8042]

My wife and I opened a joint investment account as co owner which has been over $50,000 for quite a few years. We have retired for 5 years. We split any income/loss (dividend, capital gain/loss, etc) generated when filing tax return. In this case, will both of us still need file a T3 Return ?

[@WalhoutFinancial]

Great question. No return needed. Spouses enjoy something called the "presumption of advancement", meaning that it is presumed that spouses are sharing beneficial ownership of assets that are placed in joint names. No bare trust situation exists here.

[@brianrombough5544]

Hello Mark, Your video is very informative (until this video popped up as a suggested viewing I had never even heard of a "Bare Trust"). My question is regarding the joint ownership of property. As a requirement for my son to qualify for a mortgage in 2016, I was added to the title for a 1% ownership. The original mortgage was for $90,000 and was paid off in January 2024 but I have not been taken off the title as of this writing (the title change will most likely take place over the next few months). Would I likely have to submit a T3 filing for prevoius years would my son also have any forms to submit? If the bank don't issue any T3 slips or information how is the CRA going to know if there is a Bare Trust? Is this reported to CRA by the bank? As I have done my own tax filling for the past 55 years, I do not have an accountent or tax advisor with whom I can get advice or assistance (and since there is no income generated by this Bare Trust any expense for an accountant can't even be written off as an expense).

[@WalhoutFinancial]

Thanks Brian. Yes, I believe you have a filing requirement if you were still listed on the deed - even if the mortgage was paid in full. In terms of reporting, I'm not sure how the CRA is communicating with the land registry offices regarding the ownership of houses, but I think it's possible. Generally speaking, Canada has a self-reporting tax system, so they are relying on the taxpayers to be honest and truthful when filing taxes. Filing an incorrect tax return is against the law. I advise people not to break the law, even if the chance that the CRA could find out about it is remote.

[@brianrombough5544]

Thanks Mark for your reply. After doing some more reasearch on Bare Trusts, I find that in addition to the Property Registry Trust I likely have a Joint Bank account concern. In 2000 when my son was in university my wife opened a joint bank account with my son to facilitate the transfer of funds for his use. Currently her name is still on the account, and even though there have been no transactions by her since 2006 it is still a joint account and as such would likely qualify as a Bare Trust.. I suspect that there are a lot of Canadian taxpayers (mostly seniors) who would be in the same position as myself. Unless the CRA send information to all tax payers regarding the Bare Trust issues most will not even be made aware of the issue. There has been very little mainstream media (radio and television) coverage of this Tax Rule change. The only ones to benefit from this legistration will be the accountants! Once again, Thank You for providing the information Cheers, Brian @@WalhoutFinancial

[@WalhoutFinancial]

@@brianrombough5544 my pleasure. Note that if the joint account held less than $50,000 in cash throughout all parts of the tax year in question, there should be no requirement to file a trust return. Check the facts of your situation with your accountant to be on the safe side.

[@user-xs6ui7im9t]

0:55 Three of us ( My only adult daughter, my wife and me ) opened an joint investment account in Sept2023 with assets over $50,000 as part of estate planning.We are all actively contribute and manage ( buying,selling ETF’s, GIC…) our own portions of assets and responsible for their tax consequences. Is this considered a bare trust relationship and need to file a T3 return and Schedule 15 for this year for each person ? or only one of us ? Your opinion is much appreciated. Thank you Mark.

[@WalhoutFinancial]

Hi Dan, this is a tricky one. I think it becomes a judgement call based on the extent to which your daughter is contributing jointly with you and your spouse. For example, if the account has $50,000 in it and your daughter has contributed only $1,000 - I think the CRA may view that as a sort of window-dressing and therefore may look at the situation as a bare trust. I highly recommend speaking to a CPA accountant to get an opinion.

[@zybala2]

Hi Mark....Many thx for posting this info in a very clear manner. Many years ago ? 5 -7 ....my mom added me as a joint owner on the title of her house. Is a T3 report required? Not sure how this reporting goes.

[@WalhoutFinancial]

Yes. Recommend you speak to your accountant and get the process started.

[@greteh2603]

My sister and I inherited a piece of land from our parents after death. I am retired and was wondering if this falls into any of this regarding if I pass and leave this to my daughter , is this considered anything?

[@WalhoutFinancial]

Thanks for your question. Based on what you've written here and provided that legal title was changed to you and your sister when the estate of your parents was settled, then I think you are fine. The only way it would get you into a bare trust scenario with your daughter is if you added her to title for no consideration simply to ease with the eventual estate process. Of course, always best to run it past your accountant to be sure.

[@cabhawkins]

Fallout of a being a trustee of a Bare trust on a property is that now you have to file a UHT return even if both partys are canadian... i think. P,ease comment.

[@WalhoutFinancial]

I think that the CRA clarified late in 2023 that certain Canadian trusts are excluded. I recommend speaking to your CPA about it. Here is an article that may help - www.investmentexecutive.com/uncategorized/feds-propose-underused-housing-tax-relief/

[@EggSandwich100]

So this is explains why I received a letter. My relative died and left me his estate. I filed returns and paid the taxes to cra up to 2017 and thought the matter is was closed. Then I received a letter this year to file tax returns for the estate 2018 - 2023. There is no income or anything to report as the matter is settled so how do i tell them to close my file?

[@WalhoutFinancial]

hmm, I would recommend calling the CRA. It's possible that the estate never received a clearance certificate and that the CRA believes the estate is still in existence. This situation is unrelated to the new trust reporting rules. www.canada.ca/en/revenue-agency/services/tax/individuals/life-events/doing-taxes-someone-died/clearance-certificate.html

[@IRONBYRON3]

Mark is correct. You will want to submit form TX-19 (Request for a Clearance Certificate). If CRA's Clearance Dept has any outstanding issues or questions, they will send it to you via lettermail.

[@offgridwanabe]

If I hold a no interest no penalty mortgage on my child's home is that considered a Bare trust?

[@WalhoutFinancial]

If you are on legal title, yes. If you aren't on legal title to the property, no.

[@offgridwanabe]

@@WalhoutFinancial all 1st mortgages are on title but they don't own the real estate. So because we are related I am penalized.

[@WalhoutFinancial]

@@offgridwanabe not sure I follow.

[@jessicabriltz2261]

Do the new trust tax rules impact estates? My father passed away in 2022 and we are still settling his estate. Both my brother and I, which are his children, are his beneficaries. Any insight you could provide would be appreciated!

[@WalhoutFinancial]

Hi Jessica, My condolences on the passing of your father. If the estate is considered a "Graduated Rate Estate", then no filing requirement. If it is NOT considered a "Graduated Rate Estate", then there is a filing requirement. Yes, super confusing. I recommend speaking to your accountant to determine which one you have. Here is an article explaining what a Graduated Rate Estate is: financialpost.com/fp-answers/fp-answers-what-is-the-benefit-of-a-graduated-rate-estate-when-doing-estate-planning

[@jessicabriltz2261]

@@WalhoutFinancial Thanks very much!

[@m4rkv]

Thanks for an informative presentation. The bare trust concept still seems very murky to me. How do you think the CRA would view the scenario of a common law spouse being the sole legal owner on title of the residential property?

[@m4rkv]

Also my understanding was that the penalty was 5% per year of the value of the asset, not 5% of the amount owing.

[@WalhoutFinancial]

@@m4rkv Yes, the bare trust rules are very murky :). I would definitely get a CPA or tax lawyer to give you a definitive opinion on this fact pattern. If you look at the definition of a bare trust, it is where the legal owner and the beneficial owner are different. So, if the "non-owning" spouse paid the downpayment or a portion thereof, and the two spouses are carrying on a common-law marriage (meaning, they live together and their lives are fully merged), I think it could be considered that this is a bare trust. The "owning" common-law spouse is holding the "non-owning" common-law spouse's share of the house in trust. Sorry I can't be of more help here. Definitely speak to a CPA or a lawyer to get an opinion. Regarding your second question - the penalty for non-reporting is a) if there is a balance due - 5% of the unpaid tax plus 1% of the unpaid tax for each month up to a maximum of 12 months or b) if there is no balance due - $25/day for each day the return is late from a minimum of $100 to a maximum of $2,500. c) Where the failure to file constitutes gross negligence, making false statements, or a taxpayer knowingly fails to file, the penalty is 5% of the maximum value of the property held in the trust during the tax year.

[@m4rkv]

@@WalhoutFinancial thank you!

[@WalhoutFinancial]

@@Croc970 No. In that circumstance, the house goes through the estate/probate process before it changes ownership into the kids' name. No bare trust in this scenario.

[@Ray-gf9su]

Hi Mark, we jointly own a primary resident (50/50 ownership) with our adult daughter, does this qualify as a trust?

[@WalhoutFinancial]

If she was added onto title for $0 consideration and she was not gifted a portion of the home at the time she was added, yes it is a bare trust situation. Recommend speaking to a CPA for direction.

[@slabsetters]

A previous question asked about power of attorney which you mentioned would not qualify... am i to assume trading authority on a parent child spouse accounts would also not qualify for the same reason?

[@WalhoutFinancial]

Thanks for your question. I think you are correct. Check with your accountant to be safe.

[@luckyme6855]

Hi Mark, My two sibling, I and my mother bought a house in early 2010s and we were joint owners from day one. This is our principal resident. Everyone have obligations to help pay. Would this fall to bare trust and need to file? Thank you for your contents.

[@WalhoutFinancial]

Thanks for your questions. Based on how you've described the relationships and roles I don't think there is a filing requirement here. Still, it's a good idea to speak to your accountant to be sure.

[@debbiegodfrey2359]

Thank you for this. I am in the situation you described re being on the mortgage as 1% owner of my daughter and son in laws home. Would all 3 be trustees? Are they settlors and/ or beneficiaries?

[@WalhoutFinancial]

Hi Debbie, I believe you are the trustee, and you have the obligation to file.

[@user-jn9ii5rs4q]

We have added our son to a Chequing account and a Savings account as Joint with right of survivorship. He has the same right and access as we do with no restrictions. Each of the account has less than 50k. But the combined amount is more than 50k. Is it a bare trust situation and needs to be reported in a T3?

[@WalhoutFinancial]

Oh, THAT is a good question. I think that a trust relationship exists here because, in the absence of any documented proof, you have not gifted the money to your son. So, a trust relationship exists here in my opinion. Whether a combination of accounts breaches the threshold and requires reporting is a tricky one. I recommend calling the CRA help line or a CPA and asking them to confirm for you.

[@oldmeadowvalevillager7961]

You Recommend Informing The Ponzi cra . . ? LMAO . . Seek Yah For Repentance . . 🙏@@WalhoutFinancial

[@kyungshim6483]

Thanks Mark for explaining this new filing requirement so well. Would adding my single adult daughter to the title of my house where she has been residing with me for the past 10 years constitute a bare trust? My daughter wants to continue living in my house after my death; so I want a seamless transfer of the house title to my daughter without going through the probate process. She has never been married and doesn't plan on ever getting married. Thanks in advance.

[@WalhoutFinancial]

Thanks for your question. Yes, that would be a bare trust. If it's your intention to gift the house to your daughter after you pass away, consider simply outlining that in your will and name your daughter as power of attorney so that she can act on your behalf if you become incapacitated. This avoids the legal and tax potholes. Yes, you will need to pay probate, but remember that probate is only a one time fee of 1.5% of the estate value over $50,000 in Ontario. The probate process can take some time but if the will is well-drafted, it should be fairly seamless. So, on a $1M house, that works out to less than $15,000 one-time probate charge. If the house is your principal residence, there will be no tax owing on the disposition to your daughter. If you are really set on avoiding probate, you can also consider moving your house (and other assets) to a trust. For example, if you are over age 65, you can move your assets into an Alter-Ego trust without triggering any tax today. You are entitled to the use of the property while you are alive and you can make your daughter the beneficiary of the trust when you pass away. This avoids the probate process. It also allows you to name your daughter as a trustee to help of you start to lose your capacity or willingness to manage your affairs (incapacity planning). The downsides here are that setting up a trust costs lawyer and accounting fees, plus annual tax filings. The question is - is the additional risk of adding your daughter to the title, taking on that additional risk, and needing to file trust tax returns every year between now and your death worth $15,000 of probate? Or, the cost and effort of setting up the Alter Ego Trust? Every situation is different, but something to consider for sure. **disclaimer, none of this is advice, please speak to an advisor/lawyer/tax professional before making any decisions.

[@user-qz6bs9fr9s]

Thanks for the video. I am still confused as to what CRA deems a trust. My mom has a non registered investment account and added her two adult children as joint (JVROS) to the account. Do you think this falls into the "trust category" I called CRA and they couldn't confirm either way.

[@WalhoutFinancial]

If a) the account was worth over $50,000 at any point during 2023 and b) the funds were not explicitly gifted to the adult children (ie. if the money is mom's and the kids are only on the account for convenience/probate avoidance), then it's a bare trust and a T3 should be filed.

[@user-qz6bs9fr9s]

By explicitly gifted, would a signed document from my mom wishing to gift the funds upon her death be sufficient?@@WalhoutFinancial

[@user-pl8xf4xu2b]

If a trustee who is also the beneficiary, does he has to file a T3 return?

[@WalhoutFinancial]

That's a tough one. I think it's possible, yes. Can you elaborate on the situation you are in?

[@annettemeekhael]

Hello. I have a joint tenant account greater than 50,000 with my senior aunt that I have access to for “duty of care”. Do I need to fill out a T3?

[@WalhoutFinancial]

I believe that would constitute a bare trust and require a filing, yes.

[@LeslieHumen-lu2ix]

If I am named as joint account holder on my mom's chequing account in order to manage her day to day expenses, and the account is less than $50,000, do I need to prepare a trust or am I exempt?

[@WalhoutFinancial]

Hi Leslie, if the account value exceeded $50,000 at any point during the year, yes. If it didn’t, or if the account was set up in October of 2023 or later, no. Thanks for watching.

[@jimbuchanan2026]

All this sounds like a way for the government to keep track of what you do with your property or money. Again big government being in your back pocket.

[@WalhoutFinancial]

Thanks for watching the videos!

[@justbe7791]

Who is responsible for issuing a T3 for a bare trust in the case of an adult child being listed on a senior parent's bank account, the bank where the funds are held? Thank you.

[@WalhoutFinancial]

No T3 slips will be issued by the financial institution. You still need to file anyways. Frustrating, right? :)

[@workingbulldogs]

How do you file without a T3?

[@WalhoutFinancial]

@@workingbulldogs Your accountant will be able to prepare the return for you without a T3 being issued by the financial institution.

[@workingbulldogs]

@@WalhoutFinancial thank you

[@tivertontom]

We (my wife and I) have a rental ppty; we split the income (rental income, on taxes), but ppty (deed) is in her name only ? (we did for liability reasons, in my business) The properties I own from before marriage are in my name only. - similar ... we have joint bank accounts that are sometimes over 50K ... is most of this stuff 'matrimonial' (both of us involved in everything joing) ?? thx

[@WalhoutFinancial]

Thanks for your question. If your wife contributed to the purchase of the rental property (which I assume she did since you are splitting the rental income), I think the rental property will trigger the new trust rules as a bare trust and require a trust filing. The reason being that your wife contributed and has beneficial ownership (meaning she gets income and will eventually share in proceeds from selling the property) but she is not a legal owner. The other items (joint bank accounts, other properties) shouldn’t require a filing. I recommend speaking to your accountant.

[@tivertontom]

This is from the CIBC link ... so I'm guessing: NO!? (we are both equally involved/responsible) "The CRA states that a trustee can reasonably be considered to act as an agent for a beneficiary when the trustee has no significant powers or responsibilities, the trustee can take no action without instructions from that beneficiary and the trustee’s only function is to hold legal title to the property."

[@WalhoutFinancial]

@@tivertontom hmm that’s a good point. This is an interesting one. I would defer to the CPA on this one. Would love to hear what they say if you don’t mind replying in the comments here.

[@shawngagne9513]

Hey Mark, watched your video and had a question.... I'm in a common law relationship (18 yrs) and we have a secured line of credit together on my wife's house (hers before we met) Just wanted if we'd have to file a T3?

[@WalhoutFinancial]

Hi Shawn, I don't think this constitutes a bare trust but best to double check with your CPA.

[@shawngagne9513]

@@WalhoutFinancial Thanks Mark!

[@annahisir4668]

I have, upon my death, my daughter as a beneficiary in mutual funds and GICs which is over $50,000. She is not aware of this. Is this a bare trust and do I need to report this?

[@WalhoutFinancial]

Hi Anna. This does not sound like a bare trust to me. If the money is in RRSP's, TFSA's in your name with your daughter named as beneficiary, that is not a bare trust and no reporting is required. If you have money in a non-registered account that you plan to leave to your daughter in your estate as outlined in your will, again - no bare trust here. In my opionion, the only way there could be a bare trust situation here is if you added your daughter's name to the account as a joint owner on the account. It doesn't sound like you've done that.

[@annahisir4668]

Thank you for explaining this. I would like to keep it as easy as possible and instead I do have a Will and Power Attorney in place. @@WalhoutFinancial

[@user-bi5fc2uf1o]

Does being power of attorney have any impact on bare trust situation when holding joint bank accounts with parent holding more than $50k ?

[@WalhoutFinancial]

Good question. No. Being a Power of Attorney does not transition ownership to the agent (the attorney). Being a joint owner does change legal ownership, creating the potential for a bare trust.

[@sandyp8781]

Do I need to file this T3 at the end of march?

[@WalhoutFinancial]

yes.

[@WalhoutFinancial]

yes. The government has announced that they aren't going to be enforcing late filing penalties for bare trusts this year, so that is a relief. Still good to speak to an accountant and get the filing done if necessary though.

[@karneymac]

I am my father's caretaker for 8 years and we both reside in the same residence/condo. Over a year ago, I became joint tenant as he is in his 90's. Is T3 required and by whom/both? Are you available for consultation, and if so, what is your contact info. Thank you.

[@WalhoutFinancial]

Joint tenant is different than joint owner with rights of survivorship. Did he "gift" you half of the property? Was it clearly documented as a gift, reviewed by a lawyer and discussed with his/your accountant? If you were simply added to title, then it is likely that you are a Joint Owner with rights of survivorship and you (not your dad) has a filing requirement. I am not available for consultation on an ad hoc basis for this specific question. If you're looking for advice on this question only, I recommend speaking to an experienced CPA. If you are looking for an advisor who can help you manage your total financial situation on an ongoing basis (retirement, tax planning, estate planning, and investment management), I am happy to connect. My email is in the description section of the video.

[@davidhughes6048]

What if joint bank accounts (parent/adult child) don’t generate any interest but may contain more than 50k at any given time. Would that need to be reported merely to disclose ownership to CRA? After all, one of the benefits of holding the funds jointly is they will pass outside probate, but the funds could be gifted anyway prior to death tax free, so…?

[@WalhoutFinancial]

I would at very least call the CRA and get an opinion on this. In my opinion it does create a trust relationship and would require disclosure on a T3 for the 2023 tax year. Children and parents should be aware that adding their child to a bank account purely for purposes of avoiding probate is fraught with risks, not to mention the fact that the court may deem that the bank account was not gifted and therefore it should form part of the estate and be subject to probate anyways. See this article for more info: www.mckenzielake.com/insights-articles/the-presumption-of-resulting-trust-in-estate-matters/

[@ldd9672]

Is this a bare trust in ur opinion? Elderly parent adds one of their adult children as joint to their bank account to help with paying bills. Then a few years later poa on same account comes into effect as elderly parent no longer mentally competent. So still a joint account with one adult child and now poa with same adult child and another adult child.

[@WalhoutFinancial]

@@ldd9672 I think it is. If the adult child is named on the account but the money wasn't gifted to them, I believe a bare trust exists. The existence of the POA doesn't negate this.

[@WalhoutFinancial]

@@ldd9672 Yes, I believe a bare trust exists here. The adult child, once they are added to the account, becomes the trustee of a bare trust unless there is clear evidence and documentation that the parents intended to gift the money in the account to the adult child. The POA does not negate this.

[@margaretscott8395]

Would 'a trust holding cash whose value was less than $50,000 THROUGHOUT the year' be exempt if the amount fell below the $50,000 during some of that year? (I have a basic chequing account that has my son's name on it as well as mine. He lives in Japan and I transfer him money from that account by bank transfer periodically throughout each year. )

[@WalhoutFinancial]

Hi Margaret, my understanding is that if the account, at any point during the year, rose above $50,000, that would trigger the reporting requirement. The only way it would be exempt is if you opened the account within the last 3 months of the year (there is an exemption for trusts that existed for less than 3 months at the end of 2023)

[@jeffcrawford2229]

​@@WalhoutFinancial I am afather now in my 90s and my eldest son is my power of attorney and also trustee for my estate when I pass. I have three bank accounts accounts on which he is a joint signing officer to be able to pay my residence or srs retirement home costs (est 100,000 dollars per year)ongoing medical health costs,etcß. I personally declare all income earned on these accounts in my own tax return. Any balance in these account will be reported in my final probate filing. Is thisarrangement deemed to be a trust requiring filing with Canada Revenue? THKS in advance for reply. Jack C.😊

[@WalhoutFinancial]

@@jeffcrawford2229 thanks Jack. I don’t think so. When you say joint signing officer, as long as your son is not legally a joint owner on the accounts and he is merely acting as power of attorney, I don’t think a bare trust exists here. I recommend double checking with the bank/financial institution and speaking to your accountant to be sure.

[@polarnights7005]

Taxation = Theft. To 'whom' does this debt be due?

[@WalhoutFinancial]

Thanks for watching!

[@joanner2644]

How long is a trust good for? Thks,

[@WalhoutFinancial]

It depends. Certain trusts have to wind up after 21 years. Others, such as spousal trusts and alter ego trusts, can extend longer than that. Sometimes the beneficiaries can demand a trust be wound up and have the property be given to them immediately. Very specific to each individual situation.

[@gidmorson668]

Hi Mark, a scenario I am in.. senior parents both beneficial owners of all the following assets and my sister and I are trustees on all these accounts. Primary residence , GIC over $50K, GIC of $15K, Chequing account yearly max $10k, non registered stocks account over 50k. I assume 3 accounts those over 50k need T3 reporting by my parents and the other 2 not reported. Is this correct?

[@WalhoutFinancial]

Hi Gid. I think you have a T3 reporting requirement on the house, the GIC over $50k, and the non-registered account over $50k. Call your accountant as soon as possible and confirm.

[@albertdesiena9021]

hi Did you mean RESP rather then RDSP?

[@WalhoutFinancial]

Neither would be subject to the new rules.

[@TheDpiper]

Are executor fees a bare trust

[@WalhoutFinancial]

Accepting executor fees for executor services rendered does not, on its own, constitute a bare trust. Provided that the estate being administered by the executor is a Graduated Rate Estate, the new trust rules are not triggered. Recommend speaking to your accountant to be certain.

[@Jabo5402]

How is a lira affected?

[@WalhoutFinancial]

The new trust rules have no impact on LIRAs

[@1ajs]

so if my dads on my tittle with me he has to put t3 witch ive never herd of befor. we didnt choose to have his name on it some idiot clerk did it with out telling us. paid 5k ea for 2 houses for tax sale from the local town

[@WalhoutFinancial]

Yes sounds like your dad has a trust filing requirement. Nice deal on the houses though!

[@1ajs]

​@@WalhoutFinancial even if he still works? theres 2 houses we share tittle cause of that cleriks error. ones empty gotta finish gutting it.

[@WalhoutFinancial]

@@1ajs unfortunately I think so. The state of the property and the fact your dad still works don’t change the requirement. I recommend you speak to an accountant to confirm.

[@1ajs]

​@@WalhoutFinancialsee if i can find one nearest accountants i know of are 400kms 1 way drive and told theyre to busy as it is im in a remote part of northern mb

[@p8ntrgodess]

How can CRA make these decisions The accounts have after tax dollars Criminals will not be affected

[@user-es8kf7ni6t]

What about a car worth under 10000 my daughter is on with me an do I need a bare trust for bank account over 50000 just in my name

[@steveolive9991]

Oh, this info is only for Canadians, eh!

[@Mooseracks]

Just pull your $$$ from banks....

[@firstwavepuresoul]

This is Freelands vindictiveness after failing on the freezing bank accounts grab. She's coming for your grandkids trust fund to give UKR and the WEF.

[@WalhoutFinancial]

Thanks for watching!

[@1026cvalle]

Sir, this is a Wendy's.

[@user-es8kf7ni6t]

This is bs