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Posts Tagged ‘Estate Planning’

Same-Sex Couples and Tax/Estate Law

Tuesday, October 27th, 2009

Under the Income Tax Act Canada, all common-law relationships, either opposite- or same-sex, are treated equally.


Common-law partners

Same-sex common-law partners are treated the same as opposite-sex common-law partners. Same-sex common-law partners are eligible for the same tax benefits, and are subject to the same obligations as married couples and opposite-sex common-law couples. (more…)

Tags: Estate Planning, Investments, Tax Planning
Posted in Estate Planning, Tax Planning | 2 Comments »

Death and Taxes: Estate Planning Mistake #4

Friday, October 9th, 2009

Estate Planning Mistake #4:  Not leaving the will where it can be easily accessed

This is probably the most frustrating mistake for the executor to have to deal with.  You’ve gone through the time, trouble and expense of drafting a bulletproof will.  And then it’s left in a household safe to which no one knows the combination or in a safety deposit box to which your executor isn’t granted access.  I’ve been told about cases where wills were left in a secret cubby in the closet, behind a wall and under floorboards.  Please do not put your executor through this.  They will be under enough stress as it is just managing the estate.  No one wants to go rifling through someone else’s bookshelves and sock drawers looking for the proper documents, much less obtaining court injunctions for access to bank deposit boxes or cutting through a locked safe.

Give your executor:

  1. A copy of the will for safe keeping, or
  2. Signed access to the bank deposit box where the will is kept, or
  3. Knowledge of where you keep the will in the home - and easy access to it.

Keeping a copy of the will at your lawyer’s office is reasonable.  However, if you have the unfortunate luck to pass away while your lawyer is on vacation and the office is closed for the holiday, an unnecessary holdup will happen.

What did we learn?

It only makes sense to have a properly reviewed will, which is drafted with your unique situation in mind.  Always sit down with an advisor or estate planner and work out the details before drafting the will.  Better yet, if you already have a will, make an appointment to review your current one.  Make sure that it makes sense and that your estate will be distributed fairly (note:  not necessarily equally, but fairly).  And, as I said before, make an appointment to sit down with a competent and qualified estate lawyer.  Your children will love you for it.

Tags: Estate, Estate Planning, executor, will
Posted in Estate Planning | No Comments »

Death and Taxes: Estate Planning Mistake #3

Thursday, October 8th, 2009

Estate Planning Mistake #3:  Not Doing the Math

There’s a lot of misinformation floating around about how certain assets are taxed when the owner dies.  I’ve heard tell that RRSPs are not taxed if beneficiaries are named on the RRSP application.  This is only partially true and if you think you’ll be able to leave RRSPs to your adult child with no tax consequences, they are in for an unpleasant surprise.  (more…)

Tags: Estate, Estate Planning, joint tenant, Mutual Funds, principal residence, principal residence exemption, probate, RRSP, Tax Planning, will
Posted in Estate Planning, Investments, Tax Planning | 4 Comments »

Death and Taxes: Estate Planning Mistake #2

Wednesday, October 7th, 2009

Estate Planning Mistake #2: Not Drafting a Will Properly

Occasionally, I’ll have someone admit grudgingly that it makes sense to draft a will, but then they perform a near 180 by saying “I’ll just buy a will kit from Grand & Toy.”  Or worse, “I’ll just write one up myself and leave it in the jewelry box.”

Look, if you’re going to do this, do it properly.  Drawing up a will by your own hand, a holographic will, can cost you even more than if you had done nothing at all.  Not only are you leaving open the possibility that your instructions won’t be interpreted correctly (e.g., defining exactly what your assets are, how they will be valued, how they will be divided, etc.), but you’re also running the risk that your will won’t comply with the province’s statutory requirements.

Now you’ve complicated matters and your family is spending more money for lawyers to properly analyze and come to an agreement as to how the estate should be managed.  Worse, the will might be thrown out altogether, causing wasted time and putting the whole process back at square zero (i.e.,  not having a will at all).  If you’re reading this as you get ready to open up the will kit you bought at an office supply store, take the following steps:

  1. Put the box back in the plastic bag along with your receipt.
  2. Go back to the store and return it.
  3. Use the refunded money toward paying someone to do the job properly.

Also, don’t assume that the will you made out before you were married or re-married will automatically include your current spouse.  The first priority (well, perhaps second priority) after the ceremony is over should be getting an up-to-date will.

Tags: Estate, Estate Planning, will, Will kit
Posted in Estate Planning | No Comments »

Death and Taxes: Spousal Rollover

Monday, October 5th, 2009

The inevitability of death and taxes is a time-worn adage that we all know.  But the fact that we hear it so often doesn’t mean we should stand by and watch it happen.  If you keep up with your income sources and tax brackets as you move from work to retirement, your tax bill can be delayed, reduced, or both.  And if you plan your estate ahead of time, your surviving relatives can be spared a hefty tax bill.

(more…)

Tags: Estate Planning, Investments, Mutual Funds, RRSP, Taxes
Posted in Estate Planning | No Comments »