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Clauses for a qualified disability trust?

by Tracy McLean | Mar 02, 2017
Over the past few weeks, we've been asked for clauses for a new type of testamentary trust for individuals with disabilities.   We discovered that it is actually called a qualified disability trust (QDT).  

According to the CRA, a qualified disability trust for a taxation year is a testamentary trust that arose on the death of a particular individual, that jointly elects, with one or more beneficiaries under the trust, in its T3 return of income for the year to be a qualified disability trust for the year.

Basically, this allows certain trusts that are created for the benefit of a person with a disability to have access to graduated rates of taxation.

The change to section 122 of the Income Tax Act, RSC 1985, c. 1, 5th Supp., was brought in by Part I of the Economic Action Plan 2014 Act, No. 2, SC 2014, c. 39, s. 38(2), which came into force upon Royal Assent - December 16, 2014. 

Despite the amendments coming into force in 2014, the QDTs first apply in the 2016 taxation year. 
 
We found commentary on the topic in CLE Online, Quicklaw and WestlawNext, but no sample clauses.  Since the QDT's haven't yet been applied, clauses have not been written or published.

The CLE Practice Manual, Wills and Personal Planning Precedents—An Annotated Guide (available via CLE Online in all Courthouse Libraries), chapter 16.1  states "unfortunately, we feel we do not yet have enough information to understand how the Canada Revenue Agency will view the transition from estate to trust and have not yet developed a precedent to permit the executor to hold an estate for up to 36 months before holding as a trustee. "
 

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