2. Sources of Law
a. Trust creation and administration
Trust creation and administration are governed by trust
principles derived from England and provincial statute law. Some
provinces have adopted sections from the Trustee Act 1925
consolidation in England. Variations between provinces reflect both
time of adoption of English law and differences between provincial
statutes. Current law reform tends to look to American uniform
acts, the American Uniform Trust Code of 2000, and the
Restatement of Trusts, 3d. The investment sections of most
Canadian jurisdictions are now based on the US-developed modern
portfolio theory; the remainder follow the earlier US prudent
person rule.
Quebec’s law in relation to fiducie creation, and the
administration of the property of others, is found in the Code, as
amended.
b. Property, estate and probate
Under the Canadian constitution, the law concerning property,
and therefore estate and probate matters, lies within provincial
jurisdiction. All common law jurisdictions in Canada have enacted
legislation in relation to property, probate of wills, and
administration of deceaseds’ estates. As to land law, most
provinces have moved to some form of land title registration.
Personal property security legislation is found among all the
central and western provinces. All common law provinces and
territories have retained the doctrine of estates received from
England, but the significance of that doctrine, except in estate
planning for successive interests, has been eroded by land title
registration and diversification of the forms of contemporary
wealth. Probate practice predominantly depends upon court rules of
practice in the superior court system of the particular province or
territory.
Quebec as a civil law jurisdiction has no doctrine of estates,
and no common law probate system, but a will in a form other than
notarial must be proved in court or before a notary.
c. Taxation
Taxation is imposed by statute. The federal authority has the
constitutional power to impose taxation in all forms within any
part of Canada, while each province is limited to direct taxation
of persons or property within the province. Municipal governing
authorities derive their taxation powers from provincial
legislation.
Individuals who are members of First Nations (known as ‘Indians’
in federal legislation) are exempt from federal and provincial
taxation on income earned on reserves, including income from
property owned by them that is located on the reserves. For
purposes of both federal and provincial taxation, this exemption
includes deceaseds’ estates, and trusts created on a reserve, with
respect to assets within a reserve. Some First Nation treaties
contain elements of self-government that supersede federal and
provincial legislation and allow the imposition of taxation.