The will of Mr. X, a resident of Quebec, left all of his property in equal shares to his two children, aged 10 and 15. His will included an extended administration clause that resulted in an extension of the executor’s duties and authority beyond the normal end of the administration of the estate, until all the legacies were delivered in accordance with the terms of the will (which was directed to occur on the children attaining 25). The will provided that, in the meantime, all income generated on each child’s share was to be used in the executor’s discretion for the support or maintenance of that child, with discretion to encroach on capital in the child’s favour. CRA indicated that if the effect of the clause was to extend the administration of the estate, then it extended the estate qua trust. Regarding the potential application of s. 104(18), it stated:
[I]t appears that the executor would have discretion as to the timing of the payment of income or capital to a beneficiary under the age of 21, or to a third party for the benefit of such a beneficiary, but would have no discretion as to the determination of the amount of income to which such beneficiary is entitled.
Consequently … it is possible that the conditions of subsection 104(18) could be satisfied in respect of the child or children of the deceased who are beneficiaries of the estate and who have not attained 21 years of age at the end of a particular taxation year. The application of subsection 104(18) would, for any taxation year to which that subsection applies, cause the portion of the amount that would, but for subsections 104(6) and 104(12), be income of the estate for the year to be deemed for the purposes of subsections 104(6) and 104(13) to have become payable in the year to the relevant beneficiary or beneficiaries to whom the entitlement to that portion would have accrued.