Keeping it in the family (trust)


As cottage season winds down and folks head out to close up for the season, many of our clients revisit their plan to transition vacation properties to the next generation.  We thought we would highlight a few situations where holding your cottage in a family trust may make sense.


Would you like to crystalize capital gains and pass on the future increase in value to future generations?  A family trust would allow you to lock in the present value of the property, passing the future tax liability onto the property’s successor(s), while still allowing you to maintain control over it.  Helpful tip – a Trust agreement should stipulate who will be responsible for the ongoing management responsibilities and costs.


Concerned about your children’s ability to handle the financial responsibilities of cottage ownership?  By including a sum of money in the Trust for cottage costs, such as maintenance and bills, you can ensure your children will be able to afford the upkeep.


Wondering what would happen if your child was to get divorced?  A properly structured Trust may protect the property from being included as a marital asset.  When a Trust is considered discretionary, no single beneficiary will own the cottage.  This prevents a beneficiary from selling it without the group’s consent.


One last thing to keep in mind - a trust is treated as having disposed of its capital property at fair market value every twenty-one years.  As always, we recommend you or your investment advisor consult with your legal and tax advisors.  The cost of good advice now is cheaper than potential headaches down the road.  


Jeremy Ruban and Trevor Stark, in partnership with the Bradet-Simpson Investment Group at Richardson GMP, work hard to develop focused strategies to meet the unique needs of today’s investor.  Richardson GMP is Canada’s leading independent wealth management firm, supported by expert tax and estate planning professionals.


If you have questions, feedback or topics you would like us to write about, please contact us at (204) 953-7850 or email  You can also visit us online at




The comments contained herein are general in nature and are not intended to be, nor should be construed to be, legal or tax advice to any particular individual. Accordingly, individuals should consult their own legal or tax advisors for advice with respect to the tax consequences to them, having regard to their own particular circumstances. Before acting on any of the above, please seek individual financial advice based on your personal circumstances.  Richardson GMP Limited is a member of Canadian Investor Protection Fund. Richardson is a trade-mark of James Richardson & Sons, Limited. GMP is a registered trade-mark of GMP Securities L.P. Both used under license by Richardson GMP Limited.