In the case of a spousal or common-law partner trust (a “spousal trust”), would a contribution to that trust, made after the death of the spouse beneficiary, by a person other than the individual who had settled the trust, cause it to cease to be a spousal trust? Also, when would the deemed dispositions under s. 104(4) occur regarding the contributed property?
CRA indicated that the trust would continue to be a spousal trust following such contribution, and the contribution would not have any effect on the timing of the deemed disposition of all the capital property of the trust: on the death of the spouse beneficiary (which had already occurred); and every 21 years thereafter pursuant to ss. 104(4)(b)(iii) and (c).
The indefeasible vesting exception to such deemed dispositions in s. 108 – trust – (g) did not apply because of the exclusion for spousal trusts in (g)(i) thereof.