Revocable Trust Services
Structuring a revocable trust where the settlor retains the power to modify, control or dissolve the arrangement, commonly used for flexible estate planning during the settlor's lifetime.
A revocable trust is one where the settlor reserves the right to revoke or alter the trust and reclaim the trust property, in contrast to an irrevocable trust where the transfer is final. Under the Income Tax Act, income arising from assets transferred to a revocable trust is generally clubbed with and taxed in the hands of the settlor, since the transfer is not treated as complete for tax purposes.
What our revocable trust service covers
Structuring for flexibility while being upfront about the tax trade-off.
- Advising on whether a revocable or irrevocable structure fits the settlor's control and tax objectives
- Drafting the trust deed with clearly defined revocation rights and the mechanism for exercising them
- Structuring trustee powers to operate the trust day-to-day while the settlor retains ultimate control
- Advising on the clubbing provisions under the Income Tax Act and their effect on the settlor's overall tax liability
- Planning the dissolution process and asset return mechanism if the trust is eventually revoked
- Coordinating registration of the deed where the trust holds immovable property
What defines a revocable trust structure
The features that separate it from an irrevocable trust.
Revocation Rights
The settlor explicitly retains the power to revoke the trust in whole or in part and reclaim the trust property, as defined in the deed.
Clubbing of Income
Because the transfer is not treated as final, income from the trust's assets is generally taxed in the settlor's hands under the clubbing provisions of the Income Tax Act.
Retained Control
Revocable trusts are often used where the settlor wants professional or trustee management of assets while retaining the ability to change course later.
Dissolution Mechanism
A clear process for winding up the trust and returning assets to the settlor if the revocation right is exercised.
Our process
From initial consultation to completion.
Objective Assessment
Understanding whether the settlor's priority is control and flexibility or a completed, tax-efficient transfer.
Deed Drafting
Drafting revocation clauses, trustee powers, and the process for exercising revocation.
Tax Treatment Review
Confirming the income clubbing impact and how it affects the settlor's overall tax position.
Registration & Asset Transfer
Registering the deed where needed and transferring the intended assets into the trust corpus.
Why the revocable-versus-irrevocable choice needs advice, not a template
What sets our approach apart.
The tax outcome is the opposite of what many people expect
A revocable trust does not achieve the same tax-separation benefit as an irrevocable one, since income continues to be taxed in the settlor's hands under clubbing provisions.
Vague revocation clauses cause disputes with trustees
If the deed doesn't clearly specify how and when revocation can be exercised, disagreements arise between the settlor and trustees over control of the assets.
A trust drafted for the wrong purpose gets challenged later
Where a revocable trust is used with the expectation of achieving a completed gift or estate exclusion, it can be successfully challenged, since revocability keeps the assets effectively within the settlor's estate.
Revocable Trust Services questions answered
What people ask before engaging us.
Considering a revocable trust for estate planning?
We will walk through the control and tax trade-offs before the deed is drafted.
