Estate Planning

Estate Planning is never something that individuals or couples enjoy discussing, or dealing with. Often this gets pushed to the bottom of the pile of things to do. Left unattended, your wishes may not be obtainable. While Canada does not have a so called estate tax, on death we have taxes based on the premise of “deemed dispositions”.

Taxation Of Your Estate

When you or your spouse die the taxes that would normally be payable from the “deemed disposition” rules are deferred, with the surviving spouse taking on the investments and other assets at the cost paid by the deceased. Only if the surviving spouse chooses to sell some assets will there then be taxes on those assets sold.

Unfortunately this deferral does not last forever. When the surviving spouse passes the entire estate becomes subject to the deemed disposition rules. This can lead to significant taxes owed by the estate. The good news is, if you have the means many wealthy households can insure this tax liability for pennies on the dollar with some early planning and proper life insurance.

We can assist with tax planning strategies, however you should always seek the advice of your accounting professional for specific tax advice.

The Will

Your “Will” is a document that outlines your wishes upon death. This is very important to be drafted well with considerable thought. It is best to utilize the services of someone who actively practices in this area of law, as many legal battles can occur if this document is not worded in such a way that your wishes are not clearly understood.

Enduring Power of Attorney

An enduring power of attorney is a legal document that gives a person that you trust the ability to manage your financial affairs on your behalf if you become incapable of dealing with these matters yourself. This includes paying bills, filing tax returns, overseeing investment decisions, banking, and any other financial matters important to the individual.

Personal Directive

A personal directive is a legal document placing someone you trust in a position to make legally binding decision related to your health. If you become incapacitated and you are unable to make decisions on your healthcare it is always best to have your loved ones empowered to carry out your wishes as you intended.

Utilizing Trusts In Estate Planning

You have saved all your life and now the next generation inherits your wealth. Would you want to give $5 million to an 18 year old with no strings attached? We doubt you would. We work with a number of estate lawyers who specialize in drafting trust conditions to manage wealth on behalf of beneficiaries usually for a specified period of time, maybe age 25? We can help you communicate your wishes to the legal profession and incorporate planning strategies to maximize the value of your estate rollover tailored to your situation.