What are the legal requirements to create a revocable living trust in Alberta?

1. What legally establishes the trust: the trust deed and who must be named

A revocable living trust in Alberta is created by a trust deed or trust agreement that sets out the settlor (the person creating the trust), the trustee who will hold legal title, the beneficiaries who hold beneficial interests, and the powers and duties of the trustee—those core elements are repeatedly identified as the foundational legal requirements in Alberta practice guides and law firm explainers ^{[1] [2]}. The deed must clearly specify distribution rules and the trustee’s powers and responsibilities to ensure the trust operates according to the settlor’s intentions ^[1].

2. Transfer of assets and “funding” the trust

A living trust becomes effective in practice only when assets are transferred into it; the trustee must hold legal title to assets for the trust to avoid probate of those assets at death, which is one of the practical reasons Canadians consider living trusts ^{[6] [7]}. Sources note that transferring property can involve administrative steps, costs and tax consequences, and that some assets (like registered accounts or certain real estate) may have particular transfer formalities or tax implications when moved into a trust ^{[8] [6]}.

3. Revocability, capacity and how terms can change

By definition, a revocable living trust allows the settlor to amend or revoke the trust during their lifetime while they have mental capacity, and typically the settlor can act as trustee until death—after which the trust usually becomes irrevocable and is administered under its terms ^{[2] [6]}. Sources emphasize that revocability depends on the trust’s terms and the settlor’s legal capacity at the time of amendment or revocation ^[2].

4. Statutory framework and trustee obligations in Alberta

Alberta’s Trustee Act and Estate Administration Act provide the statutory backdrop that shapes trustee powers, duties and record‑keeping; guidance for trustees in Alberta stresses the need for compliant administration and clear accounting to beneficiaries ^{[4] [1]}. Reports also flag that Alberta has specific requirements for trust record‑keeping and beneficiary reporting—details that practitioners say should be addressed when drafting and administering the trust ^[4].

5. Tax reporting, timing limits and ongoing compliance

Under federal tax rules, trusts must file returns and report income; revocable inter‑vivos trusts generally have income attributed to the settlor while they control the trust, and trusts face particular tax rules (including a long‑standing rule that trusts are subject to deemed disposition timing limits) that make tax planning an important part of setting up a living trust ^{[3] [6] [9]}. Sources warn that taxes, reporting obligations and the potential 21‑year deemed disposition rule make professional tax advice a practical necessity ^{[3] [9]}.

6. Areas of legal uncertainty and practical recommendations

Alberta courts have not fully settled issues such as the enforceability of pour‑over clauses into revocable trusts, and decisions elsewhere in Canada are likely to influence Alberta’s approach—this creates legal uncertainty if a will attempts to pour assets into a revocable, amendable trust without formalities ^[5]. Given unsettled case law, statutory traps, and tax consequences documented by legal advisers and firms, every source converges on the practical recommendation to involve an experienced Alberta estate lawyer and tax advisor when drafting, funding and administering a revocable living trust ^{[1] [8] [6]}.