Does a qualified disability trust have to re-elect that status every year?

Yes. Qualified disability trust status isn't a one-time designation that automatically continues once granted — it's a joint election the trust and the eligible beneficiary have to file for each specific tax year they want it to apply, and it has to be filed by the trust's filing deadline for that year. A trust can qualify one year and not the next if the election isn't refiled, or if the beneficiary no longer meets the eligibility requirements at that point.

Because eligibility depends on the beneficiary continuing to qualify for the disability tax credit, a trust can lose qualified disability trust status if the beneficiary's Disability Tax Credit Certificate lapses, isn't renewed, or is reassessed by the CRA, even if nothing about the trust itself changed. There are also limits on how many trusts can jointly elect using the same beneficiary in a given year, so families with more than one trust involving the same disabled individual need to coordinate which trust, if any, makes the election for that year.

Because missing the annual election, or losing it due to a lapsed DTC certificate, means falling back to the top marginal trust rate with no personal exemption, trustees should confirm eligibility and file the election every year rather than assuming a prior approval carries forward.