Under the terms of the trust indenture for a family trust, the settlor is one of two original trustees, all decisions must be made unanimously, the power to remove or replace (or appoint additional) trustees rests solely with the settlor while alive, as does the power to amend the terms of the trust indenture. Does s. 75(2) apply? CRA after noting its position in 2008-0292061E5 that s. 75(2) could apply “where the terms and conditions of a trust expressly require the contributor’s consent to any decision made by the trustees as a whole,” but this situation is not considered to apply “where the terms of the trust require the decisions of the trustees to be unanimous,” CRA stated:
[W]here the terms of a trust indenture require unanimous trustee decision making and are otherwise silent regarding the decision making power of the settlor/trustee, this fact alone does not lead to a presumption that subsection 75(2) will not apply. …
Before finding that each of ss. 75(2)(a)(i) and (ii) and (b) applied, CRA stated:
Given the settlor’s power to amend the trust and to remove any trustee, in our opinion the settlor is empowered in this case to unilaterally amend any provision of the trust indenture at their sole discretion. Such powers, in conjunction with the unanimous decision making requirement under the trust, support the view that the settlor/trustee effectively controls the trust.