Syndic de Budker[1], highlights the obstacles creditors may face when seeking to strike down a Family Trust on the belief it is being used as a fraudulent façade, and it underscores the limitations placed on a beneficiary’s management of their own trust.

The main issue before the court involved whether the Budker Family Trust ought to be declared unenforceable pursuant to articles 1631 of the Civil Code of Quebec and section 95 of the Bankruptcy and Insolvency Act.

1. Factual Overview:

Vladimir Budker, a trustee and beneficiary of the Budker Family trust, became bankrupt in 2022 due to a judgement rendered against him. The judgement originated from a claim brought by Mr. Budker’s primary creditor, Mr. Thomas Marmaros.

In the context of the bankruptcy proceedings, it is argued by the Applicant that Mr. Budker used the Family Trust to safeguard his assets, accruing all benefits for himself personally, while co-mingling his own property with that of the trust.[2] As such, it is contended that the Family Trust is more accurately, a sham used to conceal the ownership of various assets to the prejudice of Mr. Marmaros.

The essential elements of the impugned trust are as follows:

Settlor – the trust was settled by a Mr. Menard in 2009.[3]

Trustees – the trust deed provides for three trustees with a requirement that one of them can neither be the settlor nor beneficiary.[4] From its inception, the three trustees were Budker, his wife, and his friend Dmitry Vasserman.

Beneficiaries – the beneficiaries of the trust are Budker, his wife, and their three children.

Property – the trust property consists of the initial property settled by Mr. Menard, but a full accounting was unavailable to the court.[5] Mr. Budker also transferred his principal residence to the trust in 2015 for fair market value.[6]

Vesting – the vesting date is wholly determined by the Trustees, in their absolute discretion, or will occur upon the death of the last surviving between Mr. Budker and his wife.

2. Legal Analysis:

2.1 Rendering Trusts Unenforceable in Debtor-Creditor Contexts

In terms of rendering trusts unenforceable in the context of a debtor-creditor relationship, the Honourable Justice Immer cites from Levasseur v. 9095-9206 Québec inc.[7] This appellate level decision highlights the relevant threshold and indicia the Applicant must demonstrate to render the Budker Family trust unenforceable:

1. The plaintiff must hold, against the debtor who disposes of property, a valid claim that predates the act of alienation;
2. The deed of alienation must cause prejudice to the plaintiff creditor;
3. The debtor must have acted with the intent to defraud; and
4. The person who contracted with the debtor was not acting in good faith.[8]

Following this re-statement of law, Justice Immer goes on to emphasize the high threshold by quoting from Levasseur once again, “it is not easy to meet these requirements in the absence of present evidence of insolvency or imminent at the time of the contested act.”^[9]

2.2 Codified Presumptions of Fraud

With the relevant legal standard established, Justice Immer then considers the impact of any codified legal presumptions regarding fraud. The court turns to Articles 1632 and 1633 C.C.Q. and holds that both the contract presumption and presumptions pertaining to gratuitous transfers apply to trust contexts as well.[10]

2.3 Trust Arrangements and the Separation of Patrimony

With the relevant indicia and codified presumptions squarely established, Justice Immer then contemplates the fundamental characteristics necessary for a valid trust relationship. Citing the Quebec Civil code section 1260, Justice Immer makes it clear that there must be a separation between the subject matter of a trust and the property of a beneficiary/ trustee:

“A trust is the result of a deed by which a person, the settlor, transfers his or her patrimony to another assets, the assets that they use for a particular purpose, and that a trustee undertakes, by the fact of his acceptance, to hold and administer”[11]

Justice Immer then goes on to detail the precise nature of permissible property management relationships between the settlor, trustee, and beneficiary. Pursuant to Article 1275 C.C.Q., it is not forbidden for a beneficiary to be a fiduciary, but the trustee must act jointly with a trustee who is neither a settlor nor a beneficiary. This is echoed in the common law authority of Levasseur and Maple Syrup Producers of Quebec.[12] In both cases the Court grappled with the permissible level of involvement/ management from a beneficiary. Notably, in Levasseur the court found where a person combined the roles of settlor, sole beneficiary, and was also one of the two trustees; the trustee must then act jointly with a trustee which is neither a constituent nor a beneficiary.[13] In Maple Syrup Producers of Quebec, the court goes on to recognize, that, “in law as well as in fact”, the beneficiary cannot control the trust.[14] Quebec Maple goes on to hold, “When, ultimately, the beneficiaries control the trust, there is no longer any separation of assets; in short, there is no longer any need for an appropriation asset. In this case, the confusion of roles (trustee/beneficiary) makes the monitoring of the trustees’ actions illusory.”[15]

Additionally, Justice Immer, in outlining the essential features for valid trust creation cites the Supreme Court Decision of Bank of Nova Scotia.[16] Justice Immer cites this case as the authority for the requirement that three certainties be present at the inception of the trust,

[the] “three conditions are (…) necessary for Creation of a trust: the transfer of property from the estate of a to an appropriation patrimony, the allocation of the property for a and acceptance by a trustee”[17]

3. Application to Mr. Budker and the Budker Family Trust

In the context of the matter at bar, the court first considers Mr. Budker’s involvement in managing the property. Mr. Budker’s co-trustees testified that their roles were rather limited. Mr. Budker’s wife explained that she signs all documents and trusts her husband “with closed eyes”.[18] Mr. Vasserman, co-trustee and friend of the couple, explained that his role was limited to ensuring that Mr. Budker and his wife agreed.[19]

Despite these unfavourable testimonies, the court ultimately held that the trustee was unable to discharge the burden as set forth in Levasseur, and as such the trust stands. The determinative factors the court focused on were as follows:

• The trust was established in 2009, by an arms length settlor and well before any evidence of Mr. Budker’s insolvency;
• Even if Mr. Budker had been the settlor, that did not preclude him from being a trustee or beneficiary, as long as he acts with co-trustees as is the case, given the presence of Vasserman;
• Except for the House, which was transferred in 2015 for a fair market value, Mr. Budker has not donated or sold any property to the trust since its incorporation;
• At the time of the 2015 House transfer, there was no evidence of insolvency or imminent claims; and
• Budker occupies the role of beneficiary along side his wife, his children, and his grandchildren. The fact that Mr. Budker is a trustee and beneficiary does not put a doubt in the validity of the Trust, given the presence of the co-trustee Vasserman.

Final Thoughts

Syndic de Budker, re-iterates the high threshold an Applicant needs to surpass when attempting to render a Family Trust unenforceable in the context of a debtor-creditor claim. Further, the decision undertakes the herculean task of the court in untangling the acceptable level of interfere a beneficiary may exude in their capacity as a trustee.

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[1] Syndic de Budker, 2025 QCCS 229 (CanLII). (“Budker”)

[2] Ibid, at para 8.

[3] Ibid, at para 58.

[4] Ibid.

[5] Ibid, at para 64.

[6] Ibid, at para 124.

[7] Levasseur v. 9095-9206 Québec inc., 2012 QCCA 45, by. Art. 48. (“Levasseur”)

[8] First stated in Duchesne v. Labbé, [1973] C.A. 1002, reprinted in Stone (Syndic de), 2007 QCCA 534, at para. 158 and then in Levasseur v. 9095-9206 Québec inc. 2012 QCCA 45.

[9] Levasseur, at para. Article 50.

[10] Budker, at para 29

[11] Budker, para 33

[12] Quebec Maple Syrup Producers v. Gaudreau, 2020 QCCS 325. Motion to dismiss appeal granted: Gaudreau v. Producers and Quebec Maple Syrup Producers, 2020 QCCA 808. (“Quebec Maple”)

[13] Levasseur, at para. 72 and 75; also see Civil Code Article 1275.

[14] Quebec Maple, at paras. 65, 255 to 282.

[15] Ibid. at paras. 271.

[16] Bank of Nova Scotia v. Thibault, 2004 SCC 29 (CanLII), [2004] 1 SCR 758. (“Bank of Nova Scotia”)

[17] Ibid. at para 9.

[18] Budker, at para 60.

[19] Ibid, at para 61.

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SEE US AT THE STEP CAYMAN CONFERENCE, January 22-23, 2026, where Kimberly Whaley joins: Andrew Miller TEP, Bedell Cristin (moderator), Cayman Islands; Shân Warnock-Smith KC TEP, ICT Chambers, Cayman Islands; Toby Graham TEP, Farrer & Co, U.K. on a panel discussing “THE SHAM SHOWDOWN: IS DISHONESTY THE WRONG TEST?”

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