Regarding the consequences of the renunciation by the beneficiary of a testamentary spousal trust of all entitlements under the trust (other than income that has accrued to date) without consideration, CRA stated:
[The] definition of disposition is not exhaustive. Consequently, transactions other than those specifically mentioned in the definition can be considered as dispositions. We are of the view that a renunciation made pursuant to article 1285 C.C.Q. constitutes an extinguishment of rights and, as such, constitutes a disposition.
The residual beneficiaries of the trust, who are prohibited by the trust terms from receiving any distributions during the spouse’ lifetime, then obtain a court order to permit distributions to them prior to the spouse’s death. CRA stated:
The amendment to the trust indenture that would be granted to allow for the distribution of the property would not, in and of itself, result in a disposition of the trust property or by those beneficiaries.