If you want to help your parents out by setting up a trust, here is some advice from the experts:
• Talk to your parents
Explain how a trust can help both the giver and the recipient. Get them comfortable talking about money and being willing to reveal the necessary financial information.
• Talk to your partners
If you're not in business alone, reassure your stakeholders the trust will not negatively affect the business..
• Work out the numbers
Make sure that the tax savings outweigh the costs. Also consider whether a trust is worth it, depending on whether you want to hand over money regularly or irregularly.
• Think long term
Consider unborn babies, parents' deaths, business problems and other scenarios when setting up the terms of a trust.
• Review annually
Every year, usually when you do your taxes, reassess how much money you're moving through the trust and ensure it's beneficial for the business, you and your parents.
Special to The Globe and Mail
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