In January 2016, the taxation of testamentary trusts (trusts created through a will) will change as they have been taxed at the same graduated tax rates as an individual. After January 1, 2016, all income in a testamentary trust will be taxed at the highest tax rate applicable in each province.

Even without the advantageous tax treatment, a testamentary trust can fulfill an important role in your estate plan. Trusts enable you to maintain some control over where and to whom your money will go. They help make sure that assets are managed wisely, and they can avoid costly and time consuming probate. In some situations, they can also be used to split income among estate beneficiaries. These benefits won’t change in January.

These changes do have implications, though, which it’s important to understand so you can make fully informed decisions. If you currently act as a trustee or are named as executor for a will that contains a trust, you may want to speak with a tax advisor about how the changes might affect the beneficiaries of the trust. Similarly, if you have set up or are thinking about setting up a trust in your will, it’s probably a good time for a professional review of your entire estate plan.