Building Wealth for the Next Generation: A Guide to Bare Trusts and Informal "In-Trust For" Accounts in Canada

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Want to start building wealth for your children or grandchildren — without creating an overly complicated estate structure? Two options families may come across are bare trusts and informal "In-Trust For" (ITF) accounts. They are effective ways to invest for your kids or other family members often with little or no tax. They can be relatively simple, but there are a few important things to understand first: Who actually owns the money or asset? Who pays the tax on the investment income? When does the child gain control of the account? What happens if the trustee dies or becomes incapable? Could trust reporting requirements apply? When does a more formal trust make sense? The goal isn't to…