The will of Mr. A provides for transfers to three testamentary trusts(C-1, D-1 and E-1) for each of his three children and their children, and also for a contribution to a spousal trust, whose terms provide that upon the death of the spouse (Ms. B), the residue of the spousal trust will be divided among three testamentary trust s (C-2, D-2 and E-2) with the same respective beneficiaries as the first three trusts (C-1, D-1 and E-1). Regarding whether s. 104(2) could be applied to consolidate the six testamentary trusts into three, should it be considered that the assets come from two different people, Mr. A and the spousal trust? CRA responded:
We are of the view that a trust referred to in subsection 248(9.1) would be considered to be a trust that arose on and as a consequence of the death of the individual even though that trust (for example, any of the C-2, D-2 and E-2 testamentary family trusts) does not receive the property until a specific future date such as, for example, the death of the surviving spouse, or even though it is not legally created at the date of the individual's death. …
[A]ssuming that all the property transmitted to the various trusts comes from the testator, Mr. A, we are of the view that the property that the spousal trust would transfer to the testamentary family trusts C-2, D-2 and E-2 upon Ms. B's death would originate from Mr. A. Consequently, the condition set out in paragraph 104(2)(a) would be satisfied.