Living Trust Form (Canada)
INTER VIVOS (LIVING) TRUST AGREEMENT
This Inter Vivos (Living) Trust Agreement (the "Agreement") is made as of [Document Date] (the "Effective Date") in the Province of [Province], Canada.
BETWEEN:
[Settlor Name], of [Settlor Address], [Settlor City], [Settlor Province] [Settlor Postal Code] (the "Settlor")
- and -
[Trustee Name], of [Trustee Address] (the "Trustee")
RECITALS
A. The Settlor, whose marital status is [Settlor Marital Status] (spouse/partner: [Spouse Name]), wishes to create an inter vivos (living) trust for the benefit of the beneficiaries named herein and to transfer certain property to the Trustee to be held, managed, and distributed in accordance with the terms of this Agreement.
B. This trust is a [Trust Type] inter vivos trust. The Settlor has the legal capacity and authority to create this trust and to transfer property into it.
C. The Trustee (type: [Trustee Type]; relationship to Settlor: [Trustee Relationship]) has agreed to act as trustee of this trust and to hold, manage, and distribute the trust property in accordance with the terms of this Agreement and the fiduciary duties imposed by the common law and the applicable provincial Trustee Act (or, in Quebec, the Civil Code of Québec, arts. 1260–1370).
D. The three certainties required for the creation of a valid trust under Canadian common law are present: certainty of intention (the Settlor intends to create a trust), certainty of subject matter (the trust property is identified), and certainty of objects (the beneficiaries are identifiable).
NOW THEREFORE, in consideration of the mutual covenants and agreements herein, and for other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties agree as follows:
1. ESTABLISHMENT OF TRUST
1.1 Creation. The Settlor hereby establishes an inter vivos (living) trust (the "Trust") and transfers to the Trustee the property described in Schedule A attached hereto, together with an initial cash contribution of CAD $[Initial Contribution], to be held, managed, invested, and distributed by the Trustee in accordance with the terms and conditions of this Agreement.
1.2 Acceptance. The Trustee acknowledges receipt of the trust property described in Schedule A and the initial contribution and agrees to hold such property in trust upon the terms and conditions set forth in this Agreement.
1.3 Trust Type. This Trust is a [Trust Type] inter vivos trust created during the lifetime of the Settlor. This Trust is not a testamentary trust and is not governed by the rules applicable to testamentary trusts under the Income Tax Act (Canada).
1.4 Additional Property. The Settlor or any other person may, from time to time, transfer additional property to the Trustee to be held as part of the Trust. The Trustee is not obligated to accept any additional property. Any property accepted by the Trustee shall be subject to the terms of this Agreement.
2. TRUST PROPERTY
2.1 Schedule A. The initial trust property consists of the following assets transferred by the Settlor to the Trustee: [Trust Property]
2.2 Transfer of Title. The Settlor shall execute all documents and take all actions necessary to transfer legal title to the trust property to the Trustee, including but not limited to executing deeds for real property, completing account transfer forms for registered accounts (RRSPs, TFSAs, and other registered plans), and endorsing certificates or instruments of title.
3. BENEFICIARIES AND DISTRIBUTION
3.1 Primary Beneficiaries. The primary beneficiaries of this Trust are: [Primary Beneficiaries]
3.2 Contingent Beneficiaries. In the event that any primary beneficiary predeceases the Settlor or is otherwise unable to receive their share: [Contingent Beneficiaries]
3.3 Survivorship Requirement. No beneficiary shall be entitled to any distribution from the Trust unless such beneficiary survives the Settlor by at least [Survivorship Days] days. If a beneficiary does not survive the Settlor by the required survivorship period, that beneficiary shall be deemed to have predeceased the Settlor for all purposes of this Agreement.
3.4 Distribution Timing. The trust property shall be distributed to the beneficiaries as follows: [Distribution Timing].
3.5 Distribution Schedule. The specific distribution terms are: [Distribution Details]
3.6 Income Distribution. During the continuance of the Trust, the Trustee may, in the Trustee’s absolute discretion, pay or apply all or any part of the net income of the Trust to or for the benefit of any one or more of the beneficiaries in such amounts and proportions as the Trustee determines. Any income not distributed in a taxation year shall be accumulated and added to the capital of the Trust, and taxed at the top marginal rate applicable to inter vivos trusts under ITA s.122(1).
4. TRUSTEE POWERS AND DUTIES
4.1 Fiduciary Duties. The Trustee shall act in good faith and in the best interests of the beneficiaries. The Trustee owes the beneficiaries the fiduciary duties recognized at common law and under the applicable provincial Trustee Act (or the Civil Code of Québec in Quebec), including the duty of loyalty, the duty to act impartially among beneficiaries, the duty to invest prudently, and the duty to render accounts.
4.2 Powers. Without limiting the powers conferred by the applicable provincial Trustee Act and the common law, the Trustee shall have the following powers: [Trustee Powers]
4.3 Prudent Investment. The Trustee shall exercise the care, skill, diligence, and judgment that a prudent investor would exercise in making investments in light of the purposes, terms, distribution requirements, and other circumstances of the Trust, as required by the applicable provincial Trustee Act and the common law Prudent Investor Rule.
4.4 Accounting. The Trustee shall maintain accurate records of all trust transactions and shall provide an annual accounting to all adult beneficiaries and to the guardians of any minor beneficiaries. The accounting shall include a statement of all income received, all capital gains and losses, all expenses paid, all distributions made, and a current inventory of trust assets with estimated market values in Canadian dollars.
5. TRUSTEE COMPENSATION AND EXPENSES
5.1 Expenses. The Trustee shall be entitled to reimbursement from the trust property for all reasonable and necessary expenses incurred in the administration of the Trust, including but not limited to legal fees, accounting fees, investment advisory fees, property management costs, and tax preparation fees.
6. SUCCESSOR TRUSTEE
6.2 Resignation. The Trustee may resign by providing thirty (30) days’ written notice to the Settlor (if living and competent) and to all adult beneficiaries. The resignation shall not take effect until a successor trustee has been appointed and has accepted the trusteeship.
6.3 Removal. The Settlor, while living and competent, may remove the Trustee at any time by written notice. After the Settlor’s death or incapacity, the Trustee may be removed by the unanimous written consent of all adult beneficiaries or by order of a court of competent jurisdiction.
7. INCAPACITY OF THE SETTLOR
7.1 Determination of Incapacity. The Settlor shall be deemed to be incapacitated for the purposes of this Agreement when such incapacity is established by written declaration of two (2) licensed physicians.
7.2 Management During Incapacity. During any period of the Settlor’s incapacity, the Trustee shall manage the trust property for the Settlor’s benefit and may use the income and capital of the Trust to provide for the Settlor’s health, maintenance, support, and comfort in a manner consistent with the Settlor’s accustomed standard of living. The Trustee may also provide for the support of any person whom the Settlor was legally or morally obligated to support immediately before the incapacity.
8. REVOCATION AND AMENDMENT
9. TAX PROVISIONS
9.1 T3 Filing. The Trustee shall file a T3 Trust Income Tax and Information Return with the Canada Revenue Agency for each taxation year of the Trust, as required by the Income Tax Act (Canada). The taxation year of this Trust shall end on December 31 (ITA s.249(1)(b)). Income retained in the Trust is taxed at the top marginal rate under ITA s.122(1).
9.2 21-Year Deemed Disposition. The Trustee and the beneficiaries acknowledge that under the Income Tax Act s.104(4), the trust property is deemed to be disposed of at fair market value every 21 years from the date the trust was created, which may trigger a capital gains tax liability. The Trustee shall plan for this deemed disposition and may distribute trust property to beneficiaries before the 21-year anniversary to avoid or minimize the tax consequences.
9.3 Tax Elections. The Trustee is authorized to make any tax elections available under the Income Tax Act or any applicable provincial tax legislation, including the preferred beneficiary election under ITA s.104(14) and the designation of taxable capital gains under ITA s.104(21), in order to minimize the overall tax burden on the Trust and its beneficiaries.
10. TERMINATION
10.1 Termination. This Trust shall terminate upon the earliest of: (a) the distribution of all trust property to the beneficiaries in accordance with this Agreement; (b) the revocation of the Trust by the Settlor (if revocable); (c) the date that is twenty-one (21) years after the death of the last surviving beneficiary who was alive at the date of this Agreement (the perpetuity period at common law); or (d) as otherwise ordered by a court of competent jurisdiction.
10.2 Final Distribution. Upon termination of the Trust, the Trustee shall distribute all remaining trust property to the beneficiaries entitled thereto under the terms of this Agreement, after paying or providing for all outstanding debts, taxes, and expenses of the Trust.
11. GENERAL PROVISIONS
11.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Province of [Province] and the applicable federal laws of Canada, including the Income Tax Act (Canada). In Quebec, this Agreement shall be interpreted in accordance with the Civil Code of Québec, particularly the provisions on trusts (arts. 1260–1370).
11.2 Severability. If any provision of this Agreement is held to be invalid, illegal, or unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect.
11.3 Entire Agreement. This Agreement, including Schedule A attached hereto, constitutes the entire agreement between the Settlor and the Trustee with respect to the trust created herein and supersedes all prior agreements, understandings, negotiations, and discussions, whether oral or written.
11.4 Notices. Any notice required or permitted under this Agreement shall be in writing and shall be deemed given when delivered personally, sent by registered mail, or sent by email with confirmed receipt to the addresses set forth above or to such other address as a party may designate by written notice.
11.5 Binding Effect. This Agreement shall be binding upon and enure to the benefit of the parties and their respective heirs, executors, administrators, successors, and assigns.
IN WITNESS WHEREOF, the Settlor and the Trustee have executed this Inter Vivos (Living) Trust Agreement as of the Effective Date.
SCHEDULE A — TRUST PROPERTY
The following property is transferred by the Settlor to the Trustee to be held in trust in accordance with the terms of this Inter Vivos (Living) Trust Agreement:
[Trust Property]
Initial Cash Contribution: CAD $[Initial Contribution]
Settlor
________________
Signature
Trustee
________________
Signature
What Is a Living Trust Form (Canada)?
A Living Trust Form in Canada transfers assets to a trustee to hold and manage for named beneficiaries during the settlor’s lifetime and after death, governed primarily by provincial Trustee Acts and the common law of trusts.
Canadian trust law is rooted in English common law principles and requires the three certainties for a valid trust to exist: certainty of intention (the settlor clearly intends to create a trust relationship), certainty of subject matter (the trust property is identifiable and ascertainable), and certainty of objects (the beneficiaries can be identified). These requirements have been consistently upheld by Canadian courts and form the foundation of trust validity in all common law provinces.
Provincial Trustee Acts govern the administration of trusts across Canada, with each province having its own legislation. The Ontario Trustee Act (R.S.O. 1990, c. T.23), the British Columbia Trustee Act (R.S.B.C. 1996, c. 464), and the Alberta Trustee Act (R.S.A. 2000, c. T-8) establish the framework for trustee duties, investment powers, and administrative requirements. In Quebec, trusts are governed by the Civil Code of Quebec, arts. 1260-1370, which establishes a unique civil law framework where a trust is treated as a patrimony by appropriation rather than a common law trust relationship.
From a tax perspective, inter vivos trusts in Canada are subject to the Income Tax Act (ITA). Retained income is taxed at the top marginal rate under ITA s.122(1), and the trust must file a T3 Trust Income Tax and Information Return annually with the Canada Revenue Agency. The critical 21-year deemed disposition rule under ITA s.104(4) requires trust property to be deemed disposed of at fair market value every 21 years, a provision that distinguishes Canadian trust taxation from many other jurisdictions and requires careful long-term tax planning.
The legal framework governing the Living Trust Form (Canada) in Canada draws on several key statutes and regulatory bodies. Under Canadian law, PIPEDA and provincial privacy legislation govern personal data processed under this agreement. The Competition Act (R.S.C. 1985, c. C-34), enforced by the Competition Bureau, protects consumer rights. Section 15 of the Canada Business Corporations Act governs corporate obligations. Provincial superior courts and the Federal Court of Canada have jurisdiction for civil matters. The Canada Revenue Agency (CRA) administers tax compliance obligations. Parties executing a Living Trust Form (Canada) in Canada should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Provincial Succession Law Reform Acts sets the foundational requirements.
When Do You Need a Living Trust Form (Canada)?
A Canadian living trust form is needed in numerous estate planning and asset management scenarios. The most common reason Canadians establish living trusts is probate avoidance. When a person dies, assets held in their personal name must pass through the provincial probate process, which involves court supervision, public disclosure of the estate's value, and payment of probate fees. In Ontario, the Estate Administration Tax under the Estate Administration Tax Act, 1998 can be substantial for larger estates, charging $15 per $1,000 on estate value exceeding $50,000. A properly funded living trust removes assets from the probate estate entirely.
Living trusts are essential for incapacity planning. If the settlor becomes mentally incapacitated, the trustee (or successor trustee) can seamlessly continue managing trust assets without the need for a court-appointed guardian of property. This provides uninterrupted financial management and avoids the costs and delays of guardianship proceedings under provincial legislation such as Ontario's Substitute Decisions Act, 1992.
Parents and grandparents frequently use living trusts to establish structured distributions for children or grandchildren, confirming that assets are managed responsibly until the beneficiaries reach a specified age or milestone. This is particularly valuable for families with minor children, as it provides a thorough management framework that goes beyond what a simple will can offer.
Business owners and professionals use living trusts for succession planning, placing business interests in trust to confirm continuity of operations and support orderly transfer to the next generation. Family trusts can also be used for income splitting strategies, although the tax on split income (TOSI) rules under ITA s.120.4 have significantly limited the tax benefits of income splitting through trusts since their expansion in 2018.
Individuals concerned about protecting assets from potential creditors, family law claims, or a beneficiary's poor financial judgment include spendthrift provisions in the trust to prevent beneficiaries from assigning or encumbering their interest. This protection can be particularly important for beneficiaries in high-risk professions, unstable relationships, or those with addiction or financial management issues.
Under Canadian law, PIPEDA and provincial privacy legislation govern personal data processed under this agreement. The Competition Act (R.S.C. 1985, c. C-34), enforced by the Competition Bureau, protects consumer rights. Section 15 of the Canada Business Corporations Act governs corporate obligations. Provincial superior courts and the Federal Court of Canada have jurisdiction for civil matters. The Canada Revenue Agency (CRA) administers tax compliance obligations.
What to Include in Your Living Trust Form (Canada)
A thorough Canadian living trust form must contain several essential components to be legally valid and practically effective. The document must clearly identify the settlor (the person creating the trust), the trustee (the person or corporation managing the trust property), and all beneficiaries (the persons who will benefit from the trust). The governing province must be specified, as trust administration is governed by the applicable provincial Trustee Act or, in Quebec, the Civil Code.
The trust type must be designated as either revocable (the settlor retains the power to amend or terminate the trust) or irrevocable (the settlor permanently relinquishes control). This distinction has critical tax and legal consequences. The trust property (often listed in a Schedule A) must be described with sufficient certainty, and the settlor must actually transfer legal title to the trustee. Real property requires properly executed and registered transfer documents, and financial accounts must be retitled in the name of the trust.
Beneficiary designations must identify primary and contingent beneficiaries and specify the distribution schedule, including timing, conditions, and the manner of distribution. A survivorship clause requiring beneficiaries to survive the settlor by a specified number of days prevents assets from passing through two estates in quick succession. Provisions for contingent beneficiaries address what happens if a primary beneficiary predeceases the settlor.
Trustee powers must be explicitly stated, including investment authority (subject to the Prudent Investor Rule codified in provincial Trustee Acts), the power to sell and acquire property, borrowing authority, the power to employ professional advisors, and the authority to make tax elections. The trust must address trustee compensation, succession of trusteeship, and the mechanism for trustee resignation and removal.
Tax provisions are critical and must address the annual T3 filing requirement, the 21-year deemed disposition rule under ITA s.104(4), and the trust's mandatory December 31 taxation year-end for inter vivos trusts under ITA s.249(1)(b). Spendthrift provisions, incapacity management clauses, pet care provisions, and notarial acknowledgment blocks (particularly important in Quebec) round out a thorough living trust document.
Additional compliance elements for a Living Trust Form (Canada) used in Canada include: Under Canadian law, PIPEDA and provincial privacy legislation govern personal data processed under this agreement. The Competition Act (R.S.C. 1985, c. C-34), enforced by the Competition Bureau, protects consumer rights. Section 15 of the Canada Business Corporations Act governs corporate obligations. Provincial superior courts and the Federal Court of Canada have jurisdiction for civil matters. The Canada Revenue Agency (CRA) administers tax compliance obligations. Forms-legal.com provides this template as a starting point for Canada-compliant documentation.
Sources & Citations
Statutory citations link to official government sources.
- R.S.C. 1985, c. C-34CA official
Cite this page
Reference this free template in an article, syllabus, or research note:
Forms Legal. (2026). Living Trust Form (Canada) (Canada) [Legal document template]. Forms Legal. https://forms-legal.com/canada/estate-planning/wills/living-trust-form-canada
"Living Trust Form (Canada) (Canada)." Forms Legal, 2026, https://forms-legal.com/canada/estate-planning/wills/living-trust-form-canada.
@misc{formslegal-living-trust-form-canada,
author = {{Forms Legal}},
title = {Living Trust Form (Canada) (Canada)},
year = {2026},
howpublished = {\url{https://forms-legal.com/canada/estate-planning/wills/living-trust-form-canada}},
note = {Free legal document template. Based on Provincial Succession Law Reform Acts}
}Also available for these jurisdictions:
Frequently Asked Questions
An inter vivos trust, commonly called a living trust, is a trust created during the settlor's lifetime rather than through a will (which would create a testamentary trust). Under the Income Tax Act (Canada) s. 104(1), a trust is defined as an arrangement where a trustee holds property for the benefit of one or more beneficiaries. In common law provinces, the trust must satisfy the three certainties established by Canadian case law: certainty of intention (the settlor clearly intends to create a trust), certainty of subject matter (the trust property is identifiable), and certainty of objects (the beneficiaries are ascertainable). In Quebec, trusts are governed by the Civil Code of Quebec, arts. 1260-1370, which defines a trust as a patrimony by appropriation constituted by the transfer of property from the settlor's patrimony to the trust patrimony. Inter vivos trusts are taxed at the top marginal rate on retained income under ITA s.122(1), unlike graduated rate estates which benefit from graduated tax rates.
A revocable living trust allows the settlor to amend, modify, or terminate the trust at any time during their lifetime. The settlor retains control over the trust property and can reclaim assets. An irrevocable trust, once executed, generally cannot be altered or revoked by the settlor except by court order or, in Quebec, under Civil Code art. 1294 (variation of trusts). The tax treatment differs significantly: for a revocable trust, the CRA may treat the trust income as the settlor's income under the attribution rules (ITA ss. 74.1-74.5). For irrevocable trusts where the settlor has divested all beneficial interest, income may be taxed in the trust or in the beneficiaries' hands upon distribution. Both types are subject to the 21-year deemed disposition rule under ITA s.104(4). Provincial Variation of Trusts Acts (e.g., Ontario Variation of Trusts Act, R.S.O. 1990, c. V.1) may allow courts to vary the terms of irrevocable trusts in certain circumstances.
Canadian inter vivos trusts face several tax obligations under the Income Tax Act. The trust must file a T3 Trust Income Tax and Information Return annually with the CRA, with a mandatory taxation year-end of December 31 (ITA s.249(1)(b)). Income retained in the trust is taxed at the top marginal rate (ITA s.122(1)), currently 33% federally plus applicable provincial tax. However, income distributed to beneficiaries is taxed in the beneficiaries' hands at their individual marginal rates, making income distribution a key tax planning strategy. The critical 21-year deemed disposition rule (ITA s.104(4)) deems all trust property to be disposed of at fair market value every 21 years, potentially triggering significant capital gains tax. Special rules apply to alter ego trusts and joint partner trusts (available to settlors age 65+), where the deemed disposition is deferred until the settlor's death under ITA s.104(4)(a). Trustees should plan distributions before the 21-year anniversary to minimize tax consequences.
In common law provinces (Ontario, BC, Alberta, etc.), a living trust does not legally require a lawyer or notary for its creation. However, given the complexity of trust law and the significant tax implications under the Income Tax Act, professional legal advice is strongly recommended. A lawyer can ensure the trust satisfies the three certainties, properly addresses the 21-year deemed disposition rule, and complies with the applicable provincial Trustee Act (e.g., Ontario Trustee Act R.S.O. 1990, c. T.23; BC Trustee Act R.S.B.C. 1996, c. 464; Alberta Trustee Act R.S.A. 2000, c. T-8). In Quebec, while a trust can be created by private writing, a notarial act (acte notarie) under the Civil Code of Quebec provides enhanced evidentiary weight and is recommended for significant trust estates. Real property transfers into the trust require proper registration with the provincial land registry office.
Yes. One of the primary advantages of a living trust in Canada is probate avoidance. Assets held in a properly funded inter vivos trust pass directly to beneficiaries without going through the provincial probate process, avoiding probate fees (Estate Administration Tax in Ontario, probate fees in other provinces), delays, and public disclosure. In Ontario, the Estate Administration Tax Act, 1998 imposes a tax of $5 per $1,000 on the first $50,000 and $15 per $1,000 on amounts exceeding $50,000 of estate value. In British Columbia, probate fees can reach $14 per $1,000 for estates over $50,000. However, the trust must be properly funded during the settlor's lifetime — simply creating the trust document without transferring assets into it provides no probate benefit. Note that trust property is not subject to the Succession Law Reform Act (Ontario) or similar provincial estate legislation, but it may still be subject to family law claims in some provinces.
A trustee in Canada owes fiduciary duties established by common law and codified in provincial Trustee Acts. The core duties include: the duty of loyalty (acting in the best interests of beneficiaries, not the trustee's own interests); the duty of prudent investment (investing trust assets with the care, skill, and diligence of a prudent investor, as required by the Prudent Investor Rule in Ontario Trustee Act Part III); the duty of impartiality (treating all beneficiaries fairly, balancing the interests of income beneficiaries against capital beneficiaries); the duty to account (maintaining accurate records and providing annual accountings to beneficiaries); the duty not to delegate (except for investment decisions under the Trustee Act, and professional services); and the duty to avoid conflicts of interest. In Quebec, the Civil Code arts. 1299-1370 impose similar obligations. The trustee may be personally liable for losses caused by breach of these duties, including liability under the Income Tax Act s.159 if taxes remain unpaid at the time of distribution.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
Found an error? Let us knowRelated Documents
You may also find these documents useful:
Last Will and Testament (Canada)
Create a legally valid Canadian Last Will and Testament. Appoint an estate trustee (executor), name guardians for minor children, make specific bequests, distribute your residuary estate, and include a revocation clause — all compliant with provincial Wills Acts including Ontario’s SLRA, BC’s WESA, and Alberta’s WSA.
Trust Agreement (Canada)
Create a Canadian Inter Vivos (Living) Trust Agreement to transfer and manage assets for beneficiaries. Covers revocable and irrevocable trusts, trustee powers, 21-year deemed disposition, T3 filing requirements, and provincial Trustee Act compliance.
Power of Attorney (Canada)
Create a simple Canadian Power of Attorney to appoint an agent to act on your behalf in financial and legal matters. This standard (non-continuing) template is automatically revoked if the principal becomes mentally incapable. References provincial power of attorney legislation including Ontario's Substitute Decisions Act, BC's Power of Attorney Act, and Alberta's Powers of Attorney Act. Covers general or specific powers, effective period, restrictions, compensation, liability limitation, and witness provisions. Select your governing province and download as PDF or Word — free.
Executor Appointment and Acceptance (Canada)
Formally appoint and accept the role of Executor (Estate Trustee) for a Canadian estate. Covers executor powers, fiduciary duties, co-executor provisions, probate obligations, CRA tax filing requirements (terminal T1, T3, clearance certificate), compensation, and estate summary — compliant with provincial Trustee Acts and Estates Administration Acts.
Separation Agreement — Divorce (Canada)
Resolve property division, spousal support, child arrangements, and debt allocation with a Canadian Separation Agreement. Covers equalization of net family property (Ontario), family property division (BC), Miglin enforceability standards, and SSAG spousal support formulas.