Factual Background
Before 2002, Mr. Thompson and his wife, Mrs. Thompson had been operating restaurant franchises in Ontario and Quebec. They have established four companies for the purpose of operating the restaurants (“Companies”). In 2002, they sold all of their restaurant franchises but one. With that one exception, the Companies remained owners of the real estate only.
In 2003, Mr. Thompson passed away. Mr. Thompson left two wills, in which he created three trusts for his grandchildren and one trust (“Trust”) for most of his assets, including his shares in the Companies. The wills named Mrs. Thompson as the income beneficiary of the Trust until her death. The wills also named Mrs. Thompson, Mr. Gemmill (Mr. Thompson’s lawyer in Ontario) and Mr. Miller (brother-in-law of Mr. Thompson) as the trustees and executors under the wills. The capital of the Trust was to be distributed to the children of the couple after Mrs. Thompson’s death. The purpose of this arrangement was to provide Mrs. Thompson with financial security while preserving the capital for the children.
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