18 - Wednesday, September 30, 1992 - North Shere News

Seek expert advice when setting up trust

Michael

: DOLLARS AND SENSE
-_ THINK - OF your accoun-

. tant) and . your. lawyer when,

“'s ong, tax manager of
KPMG eat Marwick - Thorne,

matter. You | always # need
advice to decide. if '

Store” *s oiniee, 536, w.
‘Van. Info: 874-3666.

ticularly common when one or
both parents die, leaving money
or other assets to minor children
for whom a trust must be set up
through a will. The trust can con-

tinue even after, the children reach ©

the age of majority. . .
_ Our annual series of tax-plann-
ing columns continues with some

‘tips about trusts, but as Luongo

lifestyle: adjustments, : health, miscar--.

somebody with substantial

stressed, getting expert advice is
important.

-His comments here refer to Ca-
nadian residents and income tax.

“A small business owner - or
in-
vestments who is a parent often
wants to share future growth with

_ the children — and limit bis (or

her) tax liability at the same

 time,’’- Luongo said.

“An estate freeze is the most
popular way to accomplish this. It
involves. the issuing of different

“classes of shares so the ‘parents

freeze the value of. the company

. into: preference shares while the
id - ‘children’ acquire. common shares
“opportunities, :

with a nominal value which will

“reflect the future growth of the

company’s worth. .

“An estate freeze can also .

multiply the benefit of the capital

: gains exemption, provide future
income-splitting opportunities and .

reduce tax at death.

“But if the children are minors,
you ‘may -need..to.set up an inter
vivos trust so the parents can still

‘exercise some control. This is also

important.. should there be a

; breakdown in. an adult child’s

Oct 1=-Workshop for’ women who 2 ‘are
thinking about getting pregnant or are
6-19 weeks pregnant; includes info_on

relaxation: .& . breathing tech-
instructor is registered nurse,

mid &. childbirth educator Vera

Berard. W.V. Recreation Centre. 6-9
1 926-3266.

1-Introduction to - Meditation;

3. , 7:30-9:30 p.m.; $5; W.V. Recreation

¢” Mothers’: Weekly. Sup-
roup' Meeting. Sponsored by
fomen’s Centre & & YWCA. Free

Recreation Centre, |
926-3

Get: ‘1-Pre-register today: Seniors, 55
“cyts.' & older. invited to.a_ free talk on
" medications, Mon.. Oct. 5, 8:30-9
> am.,. following: ‘the Pump Primer
: Cardiée class. Info: YMCA, 926-5541.

780-22nd St. a

"tournament;

* Centre. Info: 926-3266. -
. '@e00@

1-Theatre' Sports; . racquetball
sequence dance club;
sexual assault, awareness self-defence
class for women. Info: recCentre
Delbrook, 987-Play.

Oct. 1-Seyrsour Heigtes: ‘Good As

Oct.

New Sale takes place Oct. 24. Prepare

now by gathering your goods, which
will be-sold- on consignment for you.

-< nfo: 929-4223 or 929-2116.

‘ Oct.
_ each

eee . .
1--Ongoing, meets’ ‘Ast. Thurs.
month. La Leche League

* Meeting; support, info & networking

. for. women who = are. interested in

“ breastfeeding; N.S. Unitarian Church,

370, mathers Ave., W.V.; 3 10 a. m. In-
fo: 985-3751.

Oct.
pleasure skating;.”
recCentre’ Magnussen;

eee
3--Ongoing to April. Adult
8:30-10:15  p.m.;
live organ

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‘dends. and pays -them

marriage.”’
Luongo stressed the importance
of structuring such a trust careful-

ly.

“Otherwise, the income and
capital gains earned by the trust
could be attributed back to the
parents,”’ he said.

A trust is usually treated as a
separate taxpayer, paying tax after
claiming deductible expenses from
its income. An inter vivos trust
pays tax at the top personal rate
on any income rect distributed.

“*By filing a preferred

- beneficiary election, it is possible

to have the trust’s income taxed in
the hands of the beneficiaries —
even though the money is- not.
distributed to them,’’ said
Luongo.

On the other hand, a testamen-

tary trust pays tax as an individual.

does, with the same graduated

_Fates of tax.

. “If a spousal trust is properly
structured, for example, income
can be split between the surviving
spouse and the trust so that both
may use the lower tax brackets,”’
Luongo said.

If a trust earns Canadian divi-

beneficiary,- then the - beneficiary
may claim the dividend tax credit.
"A, testamentary trust is often set

up ‘through a will for childzen,:.

providing regular income plus

perhaps percentages of the capital:
at different ages — 19, 25 and 35, 7

for example.:

“Spouse trusts are useful for.

“Oct.
Caregiver Support. Group Meeting.
8-103 W. 3rd St., N.V.-1:15-3:15 p.m.
Weekly educational sessions for family

caregivers caring for sick or elderly

telatives. Free & confidential. Info: .

983-2141.
eee

Oct. 1-Ongoing. N.S. Amateur Radio
Club. Meeting firs: & third Thuzs. of
each month. 7:30 p.m., Pacific Marine
Training Institute, 265 W. Esplanade,
Rm. 103. Non-hams welcome. Info:
lan Simpson, . 929-5030 or Blair

’ Thompson, 985-2570.

ees
Oct. 1-Ongoing. Bingo, 7 p.m. Eagles
Hall, 170 W. 3rd St., N.V.

eee
Get. 1-Ongoing. W.V. Aduit Com-
munity Pops Band welcomes new

‘members. Senior band, 8 p.m., inter-

mediate band 7:30 p. Iswin Park
Schocl. Info: John “Bergeron, 984-
0352. -

eee

Oct. 1-Ongoing cach Thurs, Thrift
Shop open. 2-8 p.m. Mount Seyinour
Unived “Ch Church, 1200 Parkgate - Ave.,

Oct.

‘1-Ongoing: TOPS (Take Off

’ Pounds Sensibly).. Meet at 7 p.m. at

the Alano Club, 176 E. 2nd St., N.Y.

Infos: 985-6538.

FREE BOOKLET
Onc often hears Canadians com-
plaining about the high amount of
tax they pay. ‘What many individuals
do not realize is that simply by
structuring their investments
carefully, they can pay far less
tax. This guide will provide you
with ideas for saving tax through
your investment program.

Call today to receive your com-
plimentary booklet.

Mark Osachoff
661-7433

| ScotiacLeod -

Trusied smasonent acuice unce 1821

to ‘a.

1--Ongoing.- N.V. Faimily:

both general and tax planning,”
Luongo said. “The terms of the
trust must specify that only the
spouse may receive income or cap-
ital from the trust until the
spouse’s death.”’

“If you leave your assets direct-
ly to your spouse instead of a
spouse trust, your spouse can then
determine what happens to these
assets following his or her death.
With the spouse trust, you decide
what happens.”’

If you remarry, you can use a
spouse trust on. your death to
make sure your children or other
relatives receive some or all of
your assets. following your
spouse’s death. Otherwise, your
spcuse could leave those assets to
his or her beneficiaries.

“Special rules allow a tax-

deferred rollover of. property — -
typically stocks and. revenue prop- .
erty — to a spouse trust," said |
Luongo. ma

“When property Passes _ to - a:
spouse or spouse trust, it may.be.
transferred, at its tax cost rather -
than fair market ‘value. . This

avoids a deemed disposition and. -

the resulting immediate tax. The
tax may then. be deferred until the
surviving, spouse dies.””. -
. ~ Copyright 1992,
” Mike Grenby is a. Nort.
Shore-based columnist. and. -:i
dependent financial adviser -who
works with - individuals:” he wilt
answer your questions:
allows — write to him c/o: The
North Shore News, 1139 Lonsdale
Ave., North: Vancouver.
2HA4, ,

ARDAGH HUNTER TURNE

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