Although in general a lawyer is not obliged to inquire as to specific terms of a trust in a conveyance of an interest in a parcel,
- when the lawyer is acting for the buyer from a trustee, the lawyer must be satisfied that the terms of the trust, on the face of the record or known to the lawyer, are met;
- when the lawyer is acting for the seller and circumstances warrant, the lawyer should make further inquiries to ensure that the client as trustee is fully informed of the requirements for an effective conveyance; and
- a lawyer who is acting for trustees on either the migration or the purchase of land held or to be held as part of the assets of the trust must be aware that the trust itself (e.g. ABC Family Trust or The CDE Personal Trust, to name common examples) must not be named as the Registered Owner of the parcel(s). The Registered Owner(s) must be the trustee(s) of the trust.1
- a lawyer who is acting on the sale of trust lands must consider who has management and control of the trust. If the sole decision maker or the majority of the decision makers, whether Trustees or beneficiaries, are non-residents of Canada, the lawyer should obtain a clearance certificate from Canada Revenue Agency pursuant to S. 116 of the Income Tax Act (Canada).2,3
- a lawyer acting on the sale or transfer of trust lands must determine who, if anyone, might have a matrimonial interest in the lands4 and draft the appropriate Affidavit of Status accordingly.
1 Land Registration Act, S.N.S.2001, c.6, s.28. Note however that the individual Trustees do not always have to be named. For example, a statute creating a particular Church or organization may indicate that the Church/organization lands are to be held by its Trustees. It is acceptable to describe the Registered Owners in the Company/Entity field as “Trustees of [name of the Church or other organization]” as indicated by the constating documents.
2 Garron Family Trust v. Her Majesty the Queen [2010 2CTC 2346 (TCC), aff’d 2010 FCA 309; aff’d 2012 SCC14]; Canada Revenue Agency Technical Interpretation 2012 – 0448681e5.
3 Income Tax Act, R.S.C., 1985, c.1 (5th Supp.), s.116.
4 Matrimonial Property Act, R.S.N.S., 1989, c. 275, as amended
- Trustee Act, R.S.N.S. 1989, c. 479
- Public Trustee Act, R.S.N.S. 1989, c. 379
- Deeming provisions: Land Registration Act, S.N.S. 2001, c. 6, s. 28
- See also Real Estate Standard 3.10: Estates
With respect to Affidavits of Status in Deeds transferring residences which are held in trust, it is important to remember that if the Trustee is a pure Trustee, i.e. not also a beneficiary, and not married to a beneficiary of the Trust, the marital status of the Trustee is irrelevant and including in the Deed an Affidavit which states that the Trustee has not occupied the property as a matrimonial home is not helpful.
The terms of the trust should indicate whether any beneficiary of the trust has the right to occupy the residence. If a beneficiary does have the right to occupy the residence then it may be appropriate for the beneficiary and the spouse of the beneficiary to consent to the Deed and for the Affidavit of Status to reflect their interest in the property. If no beneficiary has a matrimonial interest under the terms of the trust the Trustee can swear that no beneficiary or other person can claim through the trust an interest in the property under the Matrimonial Property Act or the Vital Statistics Act.
Revised by Council on September 25, 2020