Family trusts in Quebec in 2026: are they still relevant?

But in 2026, creating a trust simply because it might be "tax-efficient" is certainly not enough. Reporting requirements have tightened in recent years, and a trust must serve a genuine purpose.

What is the purpose of a family trust?

In a business context, a trust can notably hold shares of a company and be used in certain structures aimed at succession, the transfer of a business or longer-term planning.

However, its relevance depends on several factors: the structure of the company, the people involved, the assets held, the objectives of the shareholders and the planned evolution of the company.

In other words, a trust is a planning tool, not an end in itself.

The 21-year rule: a deadline to be anticipated

One of the important things to know is the deemed disposition rule applicable to multiple trusts.

Generally, for trusts subject to this rule, a deemed disposition of property occurs 21 years after the trust is established, and then every 21 years thereafter. The property is then generally deemed to have been disposed of at its fair market value and reacquired at that same value. This can result in the tax realization of accrued gains even if the property has not actually been sold.

For a trust approaching its 21st anniversary, it is therefore best to review the situation early enough. Waiting until the last few months can limit planning opportunities.

Why 2026 is a year to watch

Federal rules regarding the reporting of trusts have changed significantly.

On March 26, 2026, Bill C-15 received Royal Assent and notably amended certain rules relating to the declaration of trusts.

For many trusts, the obligations may include filing a T3 return and Schedule 15, which is used to provide the Canada Revenue Agency with certain information about the individuals and entities related to the trust. Exceptions exist, and each situation must be reviewed individually.

The situation of simple trusts, or bare trusts, is particularly relevant today.

They are not subject to the new general reporting rules for tax years ending after December 31, 2024 and before December 31, 2026. However, certain simple trusts will have to file a return for tax years ending on or after December 31, 2026.

For trusts required to file a T3 return, the deadline is generally 90 days after the end of the trust's tax year.

And in Quebec?

Provincial obligations must also be taken into account.

Revenu Québec specifies that, as a general rule, a trust subject to Québec income tax must file a Trust Income Tax Return (TP-646). When income or a capital gain is allocated to a beneficiary, a RL-16 slip may also need to be filed.

Setting up a trust therefore entails not only tax considerations at the outset, but also administrative and tax obligations that must be followed over the years.

Is a family trust still relevant in 2026?

Yes, it can be.

But the answer depends entirely on the situation.

For some entrepreneurs, a trust can be a relevant component of a corporate reorganization, succession, or estate planning strategy. For others, the costs, administrative burdens, and added complexity may make another structure preferable.

Before setting up a trust, it is necessary to consider the current structure of the company, the objectives of the shareholders, the planned succession, the assets involved, the administration costs and the planning horizon.

The question to ask is therefore not simply:

"Should I have a family trust?"

But rather:

"Does a trust truly meet the objectives I wish to achieve with my business and assets?"

Partenariat Fiscal assists entrepreneurs and executives throughout Quebec in setting up trusts, corporate reorganizations, business transfers, and estate and post-mortem planning.

This article provides general information and does not constitute tax, legal, or accounting advice. Each situation must be analyzed based on its specific facts.

Sources

• Canada Revenue Agency, T3 Trust Guide: rules concerning, among other things, the deemed disposition at 21 years and filing deadlines.
• Canada Revenue Agency, New rules for reporting trusts and simple trusts: updated in 2026 following Royal Assent of Bill C-15.
• Revenu Québec, Trusts and TP-646 declaration: Quebec tax obligations of trusts.
• Revenu Québec, Guide to the income tax return for trusts TP-646.G: including the rules relating to deemed disposition.