Canada’s Indigenous peoples – First Nations, Métis and Inuit – face a myriad of complex legal issues related to the protection and defence of their inherited rights, lands and resources.
As communities receive payments from land claims, land entitlements, impact and benefit agreements, joint ventures and limited partnerships, the leveraging of Indigenous rights, or as existing assets are sold, questions arise as to the appropriate trust structure through which to grow, protect, and administer the resultant funds. Where trust agreements are already in place, challenges present themselves, sometimes requiring amendments to a trust to meet unforeseen circumstances.
BLG’s Private Client Group and Indigenous Law Group – lawyers with specialized legal expertise in designing, defending, administering, and amending trusts – provide innovative, pragmatic services to effectively protect legacies and settlement funds and meet community needs. Our services ensure that the right trust structures are chosen: innovative, flexible, and defensible; trusts that will endure the test of time.
A collaborative, thoughtful approach
Given our level of involvement with Canada’s Indigenous peoples across diverse areas of the law, we are intimately familiar with the challenges related to identifying and meeting the needs of diverse communities, particularly as they relate to the establishment of trusts. This includes proactive consideration of the duty to consult, economic development, administration, financing, and governance issues, as well as ensuring community inclusiveness and implementing a process for proper community consultation. We respect and acknowledge the value of traditional knowledge and work collaboratively with clients to ensure that community, cultural, and traditional priorities are understood and seamlessly incorporated into our approach, the trust structures and any amendments put forth.
Deep expertise, valuable insights
To be effective, trust structures should be flexible and innovative, and ensure desired outcomes of various stakeholders without undue administrative burden. Clients rely on us to advise them on the benefits and challenges of different types of trusts and to relay insights and lessons learned through the hundreds of trusts we have established.
BLG acts directly on behalf of Indigenous communities as well as through trust companies, banks, and credit unions, to:
- Design tax-efficient business structures
- Design and negotiate the appropriate trust agreements (including trusts which appoint administrative and/or community trustees and outline the related duties and responsibilities, particularly in respect of the lending and investing of funds)
- Evaluate economic and legal implications of the trustee or successor trustee roles
- Manage the trust settlement process, including community information sessions
- Assess conflicts such as when a party has multiple roles (e.g., is both a trustee and service provider)
- Amend existing trust agreements
- Implement terms and resolve disputes through mediation, arbitration and, as necessary, at all levels of court, including the Supreme Court of Canada
- Determine the right compliance as it pertains to governance matters, including interaction with the community, its Chief and Council
Establishing the right trust structure
A variety of different trust structures exist. These include traditional structures, which impose a high level of risk and responsibilities upon trustees, and alternative structures, which consider the nature of the funds to be settled on trust and the impact it will have with regard to compliance with local laws and consideration of community economic development.
The decision to choose one trust structure over another is arrived at through an examination of the objectives for the trust and its functional/operational aspects. Objectives need to be clearly articulated, and even quantified. Functional/operational considerations include where to invest and why, how to allocate the funds, to whom and how to structure and calculate payments, including per capita distributions, business economic development, adjustments for increases in value over time, provisions to provide for minors, deceased and incapable members, and location ticket holders, who will make the payments (the Nation or the trustees) and how responsibilities are divided. Additional considerations also arise, such as income tax efficiency and anti-money laundering. Clients rely on us to guide them through this and to ask the necessary questions to ensure the final trust agreement meets objectives.
A specific benefit of working with BLG is that we provide legal and tax advice – our Private Client Group is integrated with our tax group, providing clients with this added advantage as well as client/attorney privilege.
