Under a mooted spouse trust, the spouse has the exclusive and unconditional right to all annual income but it remains in the spouse's discretion to not require the annual payment of all income, and any portion of the income not so distributed to be added to the trust capital distributed to the spouse, at the spouse's discretion, in the same manner as the capital, the spouse being the sole capital beneficiary during the spouse’s lifetime, so that the trustees must distribute all or part of the capital to the spouse at the spouse’s sole request. CRA stated:
To the extent that the spouse is entitled to all of the income of the trust under the trust document but indicates in writing a desire not to receive all or part of that income, the fact that the portion of the trust income renounced by the spouse is retained by the trust and added to its capital will not in and of itself disqualify the trust as a spouse trust within the meaning of subsection 70(6).