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.