Estate & Trusts Tax

Course number: LAW 3520

A study of taxation principles as they relate to estates, trusts and estate planning.

Extended Course Description

PREREQUISITE: There are no prerequisites for this course. However to obtain the full benefit from the course a knowledge of trust law and corporate taxation will be useful.

COURSE CONTENT: This course deals with the following topics:

  1. tax ramifications arising on the death of a taxpayer
  2. taxation of estates
  3. taxation of personal trusts
  4. principles of inter vivos and testamentary estate planning
  5. various anti-tax avoidance rules affecting estate planning
  6. the reorganization of private corporations as part of inter vivos and testamentary estate planning
  7. the ethical issues that can arise in estate planning

Special emphasis will be placed on the taxation of trusts and their use in tax planning by individuals and First Nations. The tax traps to be avoided when creating inter vivos or testamentary trusts will also be canvassed. The intention is to provide as much practical knowledge as possible and to prepare students for practice.

TEACHING METHOD: Both lecture and problem solving. Problems will be given out on a regular basis to allow students to asses their understanding of the course contents and to provide experience with issue identification and problem solving. Doing the problems will be on a voluntary basis, but sample answers will be provided.

DEGREE OF DIFFICULTY: The subject matter is conceptually difficult. There is a significant amount of reading required. The workload increases toward the end of term, at which time at least an hour of work may be required outside of class, for each hour of class. The course concepts are cumulative, in that an understanding of concepts taken later in the course requires an understanding of concepts taken earlier.

BOOKS: The Income Tax Act of recent vintage and tentatively PRACTITIONER’S GUIDE TO THE TAXATION OF TRUST AND ESTATES by Chow and Pryor, 2018 edition.   There will also be handouts prepared by the instructor.

PRACTICAL IMPORTANCE: Every practitioner who will be preparing will , trust and working with private corporations should have some knowledge of the topics covered in this course. Although the Course’s basic emphasis is on certain areas of income tax law, the course will substantially supplement a student’s understanding and knowledge of trust law, the law applying to the taxation of shareholders of private corporations, the preparation of wills and to estate planning. Recent amendments to the Income Tax Act introduced in 2014 and recently proposed changes to take effect in 2018 drastically changed estate planning for shareholders of private corporation  and the use of inter vivos and testamentary trust tools. Much of what has been done in the past in the way of estate planning can no longer be done without advesrse tax consequences. This new planning regime has made many wills, estate freeze and trusts precedents dangerously obsolete. Students who take this course will have a head start to knowing what to avoid when receiving and documenting their clients’ estate planning instructions.

ASSESSMENT: 100% written exam at conclusion of course. Open book.

INSTRUCTOR: Sergio Pustogorodsky


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