Funds Held In Trust

2010-02-23

Hello, Section 67(1)(a) of the Bankruptcy & Insolvency Act states that property of a bankrupt divisble among his/her creditors shall not comprise property held by the bankrupt for any other person. In summary, property held in trust for another person does not constitute an asset(s) of the bankruptcy estate. That being said, in order for property to be held in trust it must meet certain criteria - i.e. certainty of intent, certainty of object and certainty of subject matter. For example, if there is money held in trust for your children, it should be deposited in an account that is clearly marked as being held in trust (e.g. Mother Smith in trust for Daughter Smith). If the funds are co-mingled, they are not being held in trust. For example, a joint bank account in the name of Mother Smith and Daughter Smith. Funds held in trust should be clearly identified as such. RESPs are not considered funds held in trust and can be liquidated in bankruptcy. It should also be noted that S. 23(1) of the Manitoba Executions Act sets out an exemption for cash on hand - "the food and fuel necessary for the judgment debtor and the members of his family for a period of six months, or the cash equivalent thereof..." This legislation is not referring to fuel for your vehicle but rather heating fuel for the home. Nevertheless, you may also be entitled to a small exemption for cash on hand. Brad Milne, CIRP Trustee in Bankruptcy Brandon, Manitoba

Latest Blog Posts

2025-08-14

How to budget for summer vacation

Marianne Steele-MacSween

Vacation costs can add up quickly without proper planning. This guide can help you budget so that you can make the most of your trip without overspending.

Read More

2025-08-05

How to budget when you’re unemployed

Lindsay Burchill

Bankruptcy Consumer Proposal

Losing your job can be frustrating and, even more so, managing your financial wellbeing while you’re unemployed. However, you can successfully navigate the situation with the right budgeting tips.

  • First steps to take when you become unemployed
  • Managing your expenses
  • Seeking professional help

Read More

2025-08-04

How to Deal with Unexpected Medical Expenses

Nicole Polak

Since it’s impossible to predict or prevent most medical conditions or emergencies, the best way to handle them is by planning and preparing for them.

Read More

Consultation icon