Holding Property In Trust For A Company (Or Anyone Else)
Bare trust documents set up trusts that allow one party (a person or company) to own something in the name of another party. Often bare trust documents are used with respect to land. They can be used for any property. Typically they are used for tax purposes. If you have any questions after reading the following or would like to set up bare trust documents we are here to help. The bare trust lawyers at Kahane Law Office in Calgary, Alberta can set up your bare trust documents for you. Call today 403-225-8810.
When Are Bare Trusts Usually Needed?
There are a couple of situations where are trusts are used. Their use has mixed success with respect to how they are treated by the CRA so it is very important to talk to a lawyer and / or an accountant. The most usual situations include:
Real Estate Revenue Property Bare Trusts
A bare trust is usually needed in real estate situations. A person who invests in real estate will often hold their investments in a holding company. They do this to take advantage of the benefits of incorporating. The corporate lawyers at Kahane Law are happy to set up your corporation for low flat rates and usually within a business day or two if needed quickly). Typically a mortgage lender will require legal ownership of real estate to be held in a person’s individual name. The ownership is then in them as a person and not their company or corporation. If revenue property is held personally, the person would lose the advantages of incorporation. Bare trusts create a legal trust where the property held as a person are being held in trust for the corporation.
Property Held By Joint Ventures
Joint Ventures are specific projects taken on by multiple parties. They are created by contract but do not exist as a legal entity. Because they are not recognized as a legal entity (only people and corporations are), they are not able to own real estate. Land titles will not register a joint venture as the owner of land. This means that one party may be required to hold the land in the name of the joint venture. Bare trust documents create a legal trust where the land is held in trust for the multiple parties.
What Are Bare Trust Documents?
Bare trust documents are documents in the form of a letter, agreement or trust that sets out who the beneficial owner is, who the legal owner is and the terms of the legal owner holding the property in the name of the beneficial owner. For example, the land may be held in a person’s personal name. A bare trust sets up a situation where that property is being held by the person, in the name of a corporation (a holding company). The intent is to pass on all the legal decision making, obligations, benefits, taxes, etc to the company for whom the bare trust documents create the trust for.
A Word Of Warning About The CRA And Bare Trusts
There are many valid reasons to use bare trust documents. There are also many effective uses for them. There are some significant restrictions with respect to how the Canada Revenue Agency treats bare trusts and bare trust documents. It is extremely important to get both legal and tax advice from your lawyer and accountant with respect to setting up a bare trust. The implications of failing to do so,or using an “online” document, can be in the hundreds of thousands of dollars.
Lawyer For Preparing Bare Trust Documents in Alberta
If you need a bare trust set up, do it right. The Calgary, Alberta Lawyers at Kahane Law Office are happy to explain and set up bare trust documents for you. We will work with your accountant to make sure that your tax planning advice is followed. For an appointment, call today. 403-225-8810 , or email us directly here.