let's take care of the trust payments to your children.
The U.S. Canadian Tax treaty provides for that the trust income is taxable only in Canada. So as long as they are resident in Canada, they do not have to report the trust income.
But if they are resident in the U.S. and receiving Trust payments, they have to report any trust income to the U.S.
Any U.S. beneficiary of a foreign trust must file a form 3520 with his or her tax return in any year in which the beneficiary receives a distribution of any kind.
See this link for additional information. http://www.irs.gov/businesses/international/article/0,,id=185295,00.html
The tax treaty language is:
1. For the purposes of this Convention, the term "resident of a Contracting State" means any person who, under the laws of that State, is liable to tax therein by reason of his domicile, residence, place of management, place of incorporation or any other criterion of a similar nature, but in the case of an estate or trust, only to the extent that income derived by such estate or trust is liable to tax in that State, either in its hands or in the hands of its beneficiaries.
AND if There is an issue where double taxation occurs then the following procedure is used to resolve the conflict.
4. Where by reason of the provisions of paragraph 1 an estate, trust or other person (other than an individual or a company) is a resident of both Contracting States, the competent authorities of the States shall by mutual agreement endeavor to settle the question and to determine the mode of application of the Convention to such person.
But the intention is that a trust it self attracts no tax when it is used to provide a benefit to someone else, except in teh state in which it was created, in this case Canada.
To the extent that income distributed by an estate or trust is subject to the provisions of
paragraph 1, then, notwithstanding such provisions, income distributed by an estate or trust which is a resident of a Contracting State to a resident of the other Contracting State who is a beneficiary of the estate or trust may be taxed in the first-mentioned State and according to the laws of that State, but the tax so charged shall not exceed 15 per cent of the gross amount of the income; provided, however, that such income shall be exempt from tax in the first-mentioned State to the extent of any amount distributed
out of income arising outside that State.
This means the U.S. can tax it at 15% if they are resident in the U.S. at the time of the distributions.
Unless your corporation has a Nexus in the U.S. it is not libel to tax.
However, i need to know how you get paid by the corporation?