Tax-Savvy Tips for Setting Up an In-Trust Account for Your Children

In-Trust accounts are a great way to save money for children, but it’s important to understand the tax implications of doing so. An in-trust account is a type of investment account that allows you to put money aside for a child without making them the owner until they reach the age of majority. This means that when they turn 18 or 21 (depending on your country’s legal definition of adulthood), they will own whatever has been deposited into the account and can access it at their discretion.


It’s important to note that any profits generated from an in-trust account will be taxable to your child when they become eligible to draw or withdraw the funds. Therefore, if you are generating more than $15,000 per year in profits from this account (such as capital gains, dividends and interest) then it is better off using an ITF and attributing these profits to your child at a 0% tax rate than spending any money on whole or universal life insurance policies.

When considering setting up an in-trust account for your children, it is essential that you do your research first and understand all of the possible tax implications associated with such an investment. There may also be other alternatives available such as keeping funds in separate accounts within a Tax Free Savings Account (TFSA) which could potentially allow you to “bequeath/gift” those funds upon maturity without having them taxed at all. Ultimately, no matter what option you choose, make sure that you understand how taxes might apply before proceeding with any financial decisions involving minors!

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