Tax and estate planning

Planning how what you own passes on when you die, and the tax owed along the way. Your lawyer prepares your will and any trusts, and your accountant confirms the tax. We handle the insurance side: coverage to pay the tax at death, named beneficiaries that keep assets out of probate where it fits, and a fair share for each child.

Generally, no: Canada has no inheritance tax. Instead, the person who died is taxed on their final return as if they had sold their capital property, such as investments, a cottage or business shares, at fair market value. Their RRSPs and RRIFs are generally taxable too, unless they pass to a spouse or partner. The estate pays that tax before anything is distributed, so beneficiaries usually receive their inheritance tax-free. Life insurance can pay the tax, so nothing has to be sold.

Probate is the court process that confirms a will and the executor’s authority to settle the estate. Assets that pass through the will can take months to settle, may attract probate fees in some provinces, and become a public record. Life insurance and segregated funds with a named beneficiary pay out directly, outside the will and probate. Probate rules and fees vary by province.

Regularly, and whenever something changes: a marriage or separation, a new child or grandchild, buying or selling a property or business, a move to another province, or a change in your wishes. Check your beneficiary designations at the same time.

It works out what your estate will owe at death, and how that tax will be paid. Some can be deferred, for example by leaving assets to a spouse or partner, and some reduced, for example by giving to charity. Life insurance can pay what’s left, so your family doesn’t have to sell a cottage or a business to cover it. Your accountant estimates the tax, and we handle the insurance side.