BoK Statement

Define a testamentary trust.¹
Identify methods in which the terms of a testamentary trust may be established, such as:
- In the will of a deceased testator
- By court order when an individual dies intestate
- Through a stand-alone life insurance trust
Explain the purpose of types of testamentary trusts.
- Spousal or common-law partner
- Non-spousal or common-law partner
- Life insurance
Identify the Canada Revenue Agency’s requirements for a testamentary trust to qualify as a spousal or common-law partner trust.²
Identify for whom a testamentary trust may be suitable.
Identify circumstances that may lead to a change in status of a testamentary trust.
- To become an inter vivos trust
- To become a non-spousal trust
Explain how each of the factors may impact the suitability of establishing or maintaining a testamentary trust, such as:
- Tax impact
- Bypassing of probate
- Privacy
- Protection from creditors
- Needs of beneficiaries and/or dependents
- Control of assets
- Time horizon
- Costs
- Administration
Evaluate the factors to that may impact the suitability of establishing or maintaining a testamentary trust.

Glossary of Verbs (mouse over to see definition)

Define

To state exactly the meaning of

Identify

To be aware of / to recognize and correctly name / to locate an appropriate resource

Explain

To make clear the meaning of / to describe something in more detail or reveal relevant facts or ideas related to it

Compare

To note the similarities and differences between two or more things

Estimate

To determine an approximate value for

Calculate

To find the value using mathematics

Convert

To change from one form or purpose to another

Evaluate

To reach a conclusion or make a judgement through careful study

Interpret

To give the meaning of / to construe or understand / to translate orally

Read more about the Taxonomy used in the FP-BoK

Financial Planning Body of Knowledge