Estate Planning Tips
 Estate planning is a process involving the counsel of professional advisors who are familiar with your goals and concerns, your assets and how they are owned, and your family structure.
 A properly structured estate plan has objectives that span both lifetime and death. A person’s estate plan may effect relations with family members and other individuals with ties to the person and to organizations, such as an individual’s closely held business. The final plan should result from consideration of family dynamics, such as estranged children, troubled marriages, children or parents with special needs, and children who are not interested in the family business.
The best advice that we can give you is to have a will; hold assets in non-testamentary form (i.e. joint tenants, etc);and do annual reviews with a qualified financial planner to ensure that your will is current with legislative changes.
Here are three additional tips:
1. Setting up your bank accounts, personal residence, vehicles, etc., in joint names allows assets to bypass the will and not be included in the cost of finalizing the estate. Therefore, the lawyer, executors and probate fees can be dramatically reduced. Remember that Revenue Canada does not care whose name a taxable asset is in, they tax according to who paid for the asset. Inheriting your parent’s personal residence is tax free.
2. Have a named beneficiary on all your RRSPs. Remember, naming your spouse or common law spouse will allow this money to transfer tax free and to defer taxes until the death of the last spouse. If there is no spouse, naming a dependent minor child/grandchild or an adult child who is financially dependent due to a physical or mental handicap can allow for transfer of money without attracting tax in your estate.
3. RRSPs are 100% taxable in the final return on death if there is no spouse or dependent. Depending on your income in the year of death, your RRSP portfolio could be taxed at the highest rate, that would mean almost half is paid to Revenue Canada. Many of our clients (or their children) are purchasing life insurance to pay the sizable tax bill due on death, if their major asset is their RRSP or RRIF. Some are purchasing a life annuity with their RRSP proceeds and buying life insurance to replace the RRSP if there is an untimely death. The life insurance is received tax free by the children and the tax department gets nothing.
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