March 29, 2024
BANGOR DAILY NEWS (BANGOR, MAINE

Late billionaire shields trust from native province

Despite his often-professed love for his native province, the late New Brunswick billionaire K.C. Irving put most of his business empire in a foreign trust to shield it from Canadian taxes.

“This was my first home,” Irving told a gathering in Buctouche, New Brunswick, in 1988. “It was my home all through my growing up years. I now live in Bermuda, but my heart is still here, here in New Brunswick, here in Buctouche.”

Irving’s heart might have been in New Brunswick, but his three sons will have to live somewhere else if they want to control the trust. His will, which was probated this month in Bermuda, bars the sons from becoming trustees unless they move outside of Canada.

There are no inheritance taxes in Canada, but residents and businesses pay hefty provincial and federal income taxes. Irving’s will is designed to safeguard the earnings of the trust.

“If the trust had even one Canadian trustee, it could be subject to certain tax laws,” said Bill Fitzpatrick, tax partner in the St. John, New Brunswick, office of Peat Marwick, an international accounting firm.

Taxes drove Irving from New Brunswick in 1972, when he established legal residency in Bermuda. In his later years, Irving lived most of each year with his second wife, Winnifred, in a Bermuda mansion called Skyline. He died Dec. 13 at age 93.

Estimates of Irving’s net worth range from $7 billion to $16 billion. The actual amount was not revealed when the will was probated, according to Paul Eagan, a reporter for the Royal Gazette in Bermuda.

The business empire includes holdings in agriculture, petroleum, forest products and transportation. It dominates the economy of New Brunswick and is a significant force in other parts of Atlantic Canada and New England.

Altogether, the family is said to own 300 companies employing thousands of people — reportedly the largest private conglomerate in North America.

K.C. Irving’s will names three people to administer the trust — Winnifred Irving and lawyer John Anthony Ellison of Bermuda, and lawyer John J. Hogan Jr. of New York. The document was signed June 5, 1978, and revised on June 10, 1982.

The will says Irving’s sons — James K., Arthur L. and John (Jack) E. — may become trustees provided they “shall have become a non-resident of Canada, and provided, further, that any such appointment of a son shall terminate immediately upon such son resuming Canadian residence.”

The document allows trustees to pay out some or all of the net income or principal at their discretion “even if all of the income and principal of the trust shall be distributed to one person.”

Irving ensured that family members will continue to control his empire by stating that a trustee who is already “a partner, officer, director (or) employee” of any of his holdings is “free to deal with any such corporation or enterprise as if no such relationship existed.”

In addition to the trust, Irving left a personal estate of $899,156. From this personal estate, he bequeathed $500,000 to his widow, who has already received “other provisions I have made for her during my lifetime, considered by both my wife and myself to have provided adequately for her.”


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