CANADA Law and Practice Contributed by: Ian Hull, Suzana Popovic-Montag and Nick Esterbauer, Hull & Hull LLP
invest and administer trust assets in the best interests of the beneficiaries. Standards are imposed by regulatory bodies and pro - vincial legislation, rather than federal law. In Ontario, for example, a trustee is subject to the Trustee Act and the common law. Financial advisers in Canada may or may not be held to a fiduciary standard; different standards of care apply depending on the type of assistance provided to clients. 6.4 Fiduciary Investment Trustees have an obligation to act reasonably and pru - dently when investing trust property, and may be held liable for failing to invest trust property prudently, or for failing to maximise the value of trust assets. Legislation enables parties with a financial interest in trust property to compel fiduciaries to apply for a passing of accounts (essentially a court audit of their administration of the trust). On a passing of accounts, a beneficiary may challenge the administration and seek damages. As trustees in Canada are guided by the “prudent investor” rule, trust property should not be exposed to unnecessary risk. Investments should involve low risk with steady returns and allow the trust to be admin- istered in accordance with the trust document – for example, they should not restrict the trust’s liquidity when distributions ought to be made. Trust investment should be diversified, taking into account the require - ments imposed by the trust document, the nature of the trust property, and current market conditions. The risk of an investment portfolio is considered in its entirety, rather than by individual investments. Diverse portfolios are typically associated with lower risk. Other Applicable Investment Standards Modern portfolio theory is a standard of risk-averse investment and uses balanced portfolios to optimise expected returns for a given level of market risk, emphasising that risk is an inherent component of a higher rate of return.
The fiduciary standard may attach to any investment professional required to act in their client’s best inter - ests, such as brokers and insurance agents. However, a suitability standard applies when financial profes - sionals act in a sales capacity, and requires them to act consistently with a client’s stated needs and objectives. 7. Citizenship and Residency 7.1 Requirements for Domicile, Residency and Citizenship Domicile in Canada For an individual to be domiciled in Canada, the com - mon law requires that they either: • were born to parents domiciled in Canada (in which case their domicile of origin will be Canada) and failed to acquire a domicile of choice not subse - quently abandoned; or • acquired a provincial domicile of choice by une - quivocally intending to reside there permanently, without a specific and/or temporary reason for doing so. Factors that the courts may consider when deter - mining domicile include where family members are located and where real property is owned or rented. If an individual is domiciled in Canada at the time of death, their estate will be administered in accordance with the law of the province where they were domi - ciled. Probate of the estate should also be sought in that province, unless the deceased held real property Permanent residency is granted on the basis of a points system, using the education, age, language skills and work experience of the applicant. Different programmes may be available to different categories of applicants seeking permanent resident status. Canadian Citizenship Canadian citizenship is required in order to obtain high-level security clearance jobs or to vote or run for in another jurisdiction. Residency in Canada
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