Document background
The Grantor Trust Letter is a specialized document used in Canadian trust arrangements when a grantor needs to establish or confirm specific trust characteristics for tax and administrative purposes. This document becomes necessary when creating a trust where the grantor retains certain powers or interests that affect the trust's tax treatment under Canadian law. The letter typically follows the establishment of a trust and provides detailed documentation of the powers reserved to the grantor, ensuring compliance with Canadian federal tax legislation and provincial trust laws. A Grantor Trust Letter is particularly important for tax planning, wealth management, and estate planning purposes, as it clearly documents the intended trust structure and its tax implications. It serves as a crucial reference point for trustees, tax authorities, and other stakeholders involved in trust administration.
