Application under the Variation of Trusts Act seeking court approval of a variation to a family trust established in 1992.
The proposed variation would permit reorganization and distribution of trust assets to defer a significant capital gains tax liability arising from the Income Tax Act 21‑year deemed disposition rule.
All adult beneficiaries and trustees consented, and the Children’s Lawyer did not oppose the variation subject to a payment protecting contingent interests of minor and unborn beneficiaries.
The court applied the test from Finnell v. Schumacher Estate and related authorities, assessing whether the variation preserved the settlor’s intention and conferred a benefit on minor, unborn, unascertained, and incapable beneficiaries.
The court concluded that the variation preserved trust capital, benefited protected beneficiaries, and would be accepted by a prudent adult acting in self‑interest.
