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People Required For Your Trust

To create and maintain a family trust in Canada, you'll need people to fill three main roles—settlor, trustee, and beneficiary—and in some trusts, a fourth role—protector—is added.

  • Settlor: is the person who contributes (or "settles") the initial property required validly to create a trust under Canadian law. In most cases, this will be a close friend of the family or a relative outside the immediate family for whom the trust is being created (an in-law, for example). The choice of settlor is often driven by certain rules under the Income Tax Act (Canada). Because of those rules, it is important that the chosen settlor be the only person, ever, who contributes property to the trust.
  • Trustee: is the person or persons who take legal title to the trust property and who are solely responsible for managing the trust property according to the requirements of the trust deed and the general law of trusts. Being a trustee carries significant responsibility to the beneficiaries and is not a task to be undertaken lightly. The law holds trustees to a high standard of conduct.
  • Beneficiary: is the people who are meant to "benefit" from the trust property. In a sense, the beneficaries are the "true" owners of the trust property, even though legal title to the trust property is held by the trustees. A trust may have only one beneficiary. But where creditor protection is a major concern, it is more common to have more than one beneficiary.
  • Protector: is the person whom the settlor appoints to safeguard the management of the trust. Protectors monitor the trustees, to be sure they comply with the wishes of the settlor. Under traditional trust law in Canada, protectors were not used or recognized, so the role of a protector in a family trust must be set out in the trust deed. In most cases, with Canadian trusts, their role is commonly restricted to appointing or removing the trustees.

It is possible for the same person to act as settlor, trustee and even beneficiary. But because of those certain tax rules mentioned earlier, this is not usually a wise structure (except in the specific case of the alter ego trust).


Always remember that your corporation is a separate legal entity from anyone else - even yourself.