Estate Planning 2019-03-16T22:16:21+00:00

Estate (Death Tax) Planning

In our Practice, I typically get two questions from clients. One is, “When I retire, will I have enough?”  The second question is, “What happens to our family’s wealth upon my death?”

Interestingly, many Canadians accept the government rhetoric that we do not have an inheritance tax which, by legal terms, is correct.  However, in Canada we have something much more punitive:  Death Taxes.  The government calls them a “deemed disposition tax” – the capital gains that are triggered by the sale of any assets or investments that are held at the time of an individual’s passing and deemed to have been sold because of death.  The capital gains triggered by their sale is included on the ‘terminal’ or final tax return.

In addition to these types of taxes, any investments inside a registered account (RRSP/RRIF) are deemed to once again be disposed of upon the death of the last spouse, and all that money is declared as income for the final year of life.   In other words, it is looked upon as 100% income paid to the annuitant, (surviving spouse) in the year of death, not dissimilar to receiving that amount of income from an employer.

The outcome of combined federal and provincial tax rates means that an estate could pay more than 50-70% in total taxes, grossly undermining the value of the estate and preventing the fulfilment of the wishes of the testator to the beneficiaries.  In other words, the erosion of one’s lifetime of wealth accumulation is attacked by government taxation and stripped from your family’s wealth.

To avoid this terminal tax burden, we provide clients with proactive advice and strategies to protect their family’s wealth to include trusts, immediate funding arrangements, life insurance contracts (both personally and corporately), charitable foundations, and any other philanthropic endeavors.  We also review our clients’ estate plans, including wills, trusts and POAs.

This preservation of family wealth includes ensuring proper beneficiaries are appointed for all qualified accounts, that all life insurance policies are properly assigned, and that annuity contracts have allocated beneficiaries.  It is staggering how many times we learn of a wealthy client who has many professional advisors but does not have a proactive, estate plan in place to preserve their family’s wealth.  Our team of estate planners, tax lawyers, estate planning legal team, and professional accountants works to ensure we leave no rock unturned.