Written by Ron Cooke, President & Founder of Strategic Wealth Protection Partners in Ontario
What are the main disadvantages of a living trust in Ontario?
1. Complex Setup and Maintenance
Creating a living trust in Ontario requires thorough legal and financial planning to ensure compliance with provincial regulations. This often involves hiring professionals, which can add complexity to the process.
2. Initial Legal Costs
The cost of drafting and establishing a living trust in Ontario is higher than creating a standard will, often ranging between $2,500 and $5,000 or more, depending on complexity.
3. Ongoing Trustee Administration Required
Managing a living trust involves administrative tasks, such as record-keeping and filing tax returns, which can require ongoing professional assistance, especially if a corporate trustee is involved.
4. Limited Creditor Protection Offered
In Ontario, assets in a living trust generally remain accessible to creditors during the grantor’s lifetime, offering limited protection.
5. Not Effective For All Assets
Certain assets, such as jointly held property or those with designated beneficiaries (e.g., RRSPs or TFSAs), may not benefit from being placed in a living trust in Ontario.
6. Trustee Changes May Be Costly
Replacing a trustee or amending the trust can involve additional legal fees and administrative work under Ontario law.
7. Does Not Protect From Creditors or Lawsuits
Assets held in a living trust in Ontario do not shield the grantor from creditors or legal claims during their lifetime.
What are the benefits of a Living Trust in Ontario?
- Helps to avoid probate for assets.
- Facilitates multi-jurisdictional planning.
- Provides control over asset distribution.
- Ensures continuity if you are incapacitated.
- Simplifies the estate administration process.
- Creates privacy as it does not become public.
- Allows for specific beneficiary terms.
- Useful for blended family planning.
- Provides flexibility in trust asset management.
- Reduces family disputes over estate.
- Supports special needs dependents.
- Can help to manage assets across borders.
At what net worth does a trust make sense in Ontario?
A living trust in Ontario is generally beneficial for individuals with a net worth of $500,000 or more.
This is especially true if your estate includes real estate, investments, or assets in multiple jurisdictions. It’s also a practical choice for families with minor children, blended family dynamics, or specific asset distribution goals.
Beyond financial thresholds, the decision should consider the complexity of your estate and the need for control over distribution.
Who should consider a living trust in Ontario?
A living trust is ideal for Ontario residents who wish to avoid probate, maintain privacy, and ensure smooth estate management.
It’s particularly advantageous for anyone with significant assets, complex family situations, or beneficiaries requiring financial oversight. Individuals with cross-border holdings or who want to ensure continuity during incapacitation should also consider a living trust.
How can you figure out if a living trust is right for your family in Ontario?
To determine if a living trust suits your family, consult an Ontario-based estate planning professional.
They will evaluate your financial circumstances, estate goals, and family dynamics, offering tailored recommendations. Key factors include your desire to avoid probate, manage multi-jurisdictional assets, and provide for vulnerable beneficiaries.
Personalized advice ensures your plan complies with Ontario laws and meets your long-term objectives.
Discover the Benefits of a Living Trust in Ontario
Are you an Ontario resident considering a living trust as part of your estate planning?
At Strategic Wealth Protection Partners, we’re here to guide you through every step of the process with expert advice and personalized support. Begin your estate planning journey today with a Living Estate Plan Consultation from our experienced team.
Our mission at SWPP is to help you create an estate plan that secures your legacy, shields your assets from unnecessary taxation, and ensures your loved ones are cared for. By designing a living trust tailored to your goals, our experts will help you build a plan that truly reflects your values and priorities.
Take control of your future—start planning today!
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Planning your legacy is about more than numbers—it’s about ensuring your family remembers you and your values are honoured for many years to come.
Estate planning and trusts can feel overwhelming, especially if it’s your first time. That’s why we’re here.
With our simple, 5-Step Living Estate Plan, we make the process easy, helping you create a comprehensive estate plan or trust that protects your assets from taxes and probate fees while preserving your legacy. Tools like The Final Word Journal capture your story, wishes, and essential details like accounts and end-of-life plans, ensuring your family has clarity and comfort.
Take the first step today—schedule a consultation call and give your family the ultimate gift: peace of mind and the assurance they were always your priority.
Read More
If you’re starting your estate planning process, you may find these articles helpful:
- What Is the Downside of an Irrevocable Trust in Canada?
- Is a Living Trust Better than a Will in Canada?
- Do Trusts Pay Taxes in Canada?
- How to Create a Living Trust in Canada
About the Author
RON COOKE, PRESIDENT & FOUNDER OF STRATEGIC WEALTH PROTECTION PARTNERS
With over 30 years in financial services, I’ve seen the challenges families face when a loved one passes—lost assets, unnecessary taxes, and emotional stress. That’s why I created the Living Estate Plan, a comprehensive process to protect assets, eliminate estate and probate fees, and create legacies that are remembered for many years to come.
This plan ensures your family receives not just your wealth, but a meaningful reminder of your care and love. Tools like The Final Word Journal capture your story, wishes, and essential details, offering clarity and comfort during difficult times.
Your final gift should be more than money—it should be peace of mind, cherished memories, and an organized estate.
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