Trust accounts

Read about how to open a trust account and their benefits.

A trust is a legal agreement where assets are entrusted to another person or party to hold (or use) for another person or organization. Typically, a “trustee” designates a “beneficiary”, and the trustee will oversee the beneficiary’s assets with certain responsibilities. The beneficiary will obtain control of their assets after an agreed upon time (typically age of majority). But before then, the trustees can manage the assets held in trust for the beneficiary(ies). There are three trust accounts you can open with Questrade. Let's take a closer look below.

Informal Trust

An informal trust is typically opened by an adult for the benefit of another person, usually a minor. Compared to a formal trust, there is less legal documentation required (a trust agreement is not required). In Questrade, the account holder (or the parent) will act as the informal trustee and he/she can open an account for each of their children (beneficiary).

Joint Informal Trust

A joint informal trusts are joint margin accounts opened on behalf of a minor. They don’t require trust agreements and can have the benefits of having more than one trader for more investing opportunities. Joint informal trustees (both parents) can also open multiple accounts for more than one child.

Typically, tax slips will be under the trustees name instead of the beneficiary for informal and joint informal trust.

Formal Trust

Similar to informal trust, a formal trust is typically opened by a trustee on behalf of a beneficiary. In addition, a trust agreement is required that contains assets administered for the benefit of another person or persons.  A formal trust must have a trustee and at least one beneficiary. There are additional formal (legal) documents required when opening the account. These extra documents ensure that any specific account instructions are legally binding.

Any further deposits to the account will be trust assets held beneficially for the beneficiary. The whole idea of a trust account is that the money belongs to someone who has rights to the money but is not given the authority to manage it.

Estate Account

An estate account is a type of formal trust established by an estate trustee or administrator to invest estate assets during the administration of an estate. Unlike a formal trust, there is no settlor of an estate account as the account is established pursuant to a will, or alternatively, pursuant to a grant of probate (in the case of an intestacy). 

Questrade estate accounts offer estate trustees and administrators the ability to invest assets online rather than having to attend a physical branch to manage investments.

Getting Started With A Trust Account

To get started with a trust account, you will need to submit your application online:

• Log in (opens in a new tab) to your Questrade account.

• In your Summary page, click + New account in the accounts selection.

• Under What type of account do you want to open? Select Estate

• Fill out the required account opening information online.

• Download generated account documents. These may documents include:

• Formal trust Trading Authorization Form

• List of Trustees and Beneficiaries

• Limitation of Benefits Clause

• Certificate of Formal Trust

• Fill out the application where necessary and sign.

• Upload or mail your documents in. You can upload your documents by heading over to the Upload documents page under the Account Management tab. Please ensure the documents are clear, easy to read and free of shadows and reflections.

Accepted Documents

• Photo ID - Drivers license or a passport (with signature page signed). If you are a non-resident of Canada, please provide an agent attested valid ID. For more information about the acceptable photo ID for your application, please check our article here.

• Address Document - Utility bills statement (phone, internet, or hydro) within the last 6 months.

• Financial document - Bank account statement (not including investment accounts). Void cheques and direct deposit are not acceptable as financial documents.

Important things to know (Informal Trust documents):

• Please provide an address and financial document from the trustee(s) on the account.

• We require a photo ID from the trustee(s) and the beneficiary on the account. Please note that an acceptable form of identification for minor beneficiaries includes citizenship cards, birth certificates and passports (please ensure the bearer’s signature page, when applicable, is visible in the photo).

• The child of the account holder must be under the age of majority of the province where this child currently resides. We also require a government issued ID to confirm the name and age of the beneficiary (usually birth certificate or passport).

Important things to know (Formal Trust documents):

• When submitting the copy of your trust agreement, which can include a copy of a will or an appointment contained in a court order, please ensure the “roles” on the online application matches the trust agreement. 

• The Limitation of Benefits Clause asks for a Business Number (BN) and this refers to your Trust/Tax account number formatted as T########. Please ensure you have your tax number ready when you fill up your documents.

• Ensure to submit the address and financial documents from the trustee and beneficiaries on the account

• We require a photo ID from the trustee(s), beneficiary, and settlor (where available) on the account. A settlor is anyone who creates and transfers the trust to the trustees. Their name and address should be included when you submit your documents.

• Sometimes, you may be asked to submit your photo ID + address and financial documents from either the trustee and beneficiaries, and settlor on the account (if available).

• Formal trust beneficiaries must be Canadian residents which includes Canadian citizens and permanent residents. If the beneficiary is from outside of Canada then we cannot proceed even if the formal trust is established in Canada.

Rollovers from Formal & Informal Trust

Once the beneficiary reaches 18 (or age of majority in their province), trustees can decide when to move the funds and assets to the beneficiary. The beneficiary can open any account type, in their own name, and complete the account opening requirements. 

• For Informal Trust rollovers: the Informal Trust Form (opens in a new tab) will need to be completed and submitted.

• Please note that deposits into registered accounts are contributions for tax-purposes.

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