Halifax-based partner Richard Niedermayer, TEP, was quoted in an article published on October 20 in Law Times, entitled "Lawyers gear up for tax changes to testamentary trusts" by Judy Van Rhijn.
The federal government is changing the taxation of testamentary trusts. Beginning in 2016, such trusts will no longer have the benefit of graduated tax rates, but will instead be taxed at the highest personal rates. This is expected to reduce the use of such trusts significantly.
Richard is noted saying that the government is using a large weapon to solve a small problem. If lobbying by the Canadian Bar Association to change the proposal is unsuccessful, Richard believes there will still be a place for testamentary trusts. "There are estate planning reasons, independent of tax planning reasons, for disabled, spendthrift or vulnerable beneficiaries," and for other situations.