^Blog Twisted Trusts

Challenge 

Mom & Dad own several businesses; their adult children are involved with some, but not all.

The Family Trust has ownership interest in some of these businesses, but only Dad and the Eldest Child were trust beneficiaries. A mash up of quick fixes in their corporate structure led to several oversights in long term planning. 

A miscommunication between the lawyer and the clients led the clients to believe all the children were beneficiaries of the trust.

As such, dividends were paid out to Youngest Child via the Family Trust, who was not a beneficiary and not employed in the related business.

Solution 

A Corporate Restructure was designed to bring all businesses under one New Family Trust with all family members as beneficiaries to align with their long-term goals. 

• Created retirement income stream for Mom & Dad.
• Developed plan to transition all the businesses to the children.
• Dividends from a profitable business in which the Youngest Child was employed, now allows for dividend income.
• Discussion with accountant to address past dividends.

Outcome 

A streamlined corporate structure allows the family to capture all their goals, in a tax efficient manner. Strong communication between advisors – planner, accountant & lawyer – allowed for a detailed analysis and strong resulting plan to match the clients’ needs. 

We tell our clients:

If you’re not planning, you’re just mitigating damage. 

Reach out to us if you have a client situation you’d like to discuss.