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Planning with Discretionary Trusts for the Matrimonial Home

A common consideration when completing or updating your estate planning is often how best to protect assets in the event of marital breakdown--whether your own marriage, including a second marriage, or an intended beneficiary's (e.g., a child or grandchild). The need to protect certain assets may be even more pressing when the property is a home or cottage that has been in a family for generations, carrying strong emotional ties and significant memories. Protecting this property can be complicated, however, if it qualifies as a matrimonial home under Ontario's Family Law Act.

Great family cottage memories? Keep them that way.

If you own a family cottage or other vacation property, it may not be just a financial asset but an emotional investment for you as well, and therefore proper planning for this special asset is especially important in order to meet all your future goals for it. The financial aspects of estate or succession planning for your vacation property should, of course, be addressed; for example, it is important to ensure there are sufficient cash or other liquid assets in your estate to pay the potentially significant tax liability on your death if there is a long-term increase in the value of the property. However, keeping your family vacation property from becoming subject to claims on marriage breakdown, including a child's, or other beneficiary's, can, in some cases, prove even more important.

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