BMO Nesbitt Burns
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Estate planning is an essential component of a successful wealth management program. A good estate plan will provide you with the peace of mind that comes from knowing your family will be taken care of, and your financial affairs will be in order and administered according to your wishes. An important key element of any estate plan is a Will.
On April 19, Finance Minister Chrystia Freeland presented her first Federal Budget from the minority Liberal government in the House of Commons. Since the government did not introduce a budget in 2020 because of the uncertainty of the COVID-19 pandemic, this was the first Federal Budget in more than two years.
A “Blended Charitable Gifts Strategy” refers to the practice of gifting something now, something later (a gift in a will) and something in between. This strategy gives donors the greatest opportunity to maximize their charitable giving, while taking into consideration their long-term financial needs. There are also significant tax advantages to giving during one’s lifetime, and additional tax advantages when a gift is made from an estate.
The benefits of making a charitable donation are countless – from helping those in need to the personal satisfaction of giving back to the causes that are important to us. Charitable giving also makes good sense from a tax perspective. With proper planning, you can reduce your total income tax liability and maximize the value of your donation.
Trusts are often used in tax and estate planning because of the flexibility they offer over the control, management and distribution of appreciating assets. In an estate planning context, trusts can be used to provide control and protection of assets, reduce probate fees at death or serve as a Will substitute, and as a vehicle to transfer wealth to future generations.
As noted in our 2017 Federal Budget summary, the federal government indicated that it would review the use of certain tax planning strategies involving private corporations that it perceives unfairly reduce personal taxes of high-income earners through a variety of tax reduction strategies unavailable to other Canadians.
Wealth transfer is the most mature stage of wealth management and involves sharing or transferring your wealth to your chosen beneficiaries. Wealth transfer considerations can be as simple as making cash gifts to your grandchildren or as complex as setting up sophisticated trusts as part of your estate plan.
A Will is a written document that directs how your assets are to be distributed at the time of your death. It should appoint an executor (“liquidator” in Quebec), and provide instructions for all your assets, including your business holdings and your personal effects.
The key to any estate plan is a Will – a written document that directs how your assets are to be distributed upon your death. It should appoint an executor and provide instructions for all your assets, including your business holdings (if applicable), real estate, cash, personal effects, as well as the timeline and manner of their distribution.
If you own a vacation property, this provides information on the tax consequences of selling a second home and highlights important estate planning considerations, if your plan is to keep your vacation property in the family for the next generation.
Many Canadians enjoy spending time in the U.S. and at some point may consider the purchase of a U.S. vacation property. As a result, it is important for Canadians who are considering the purchase of a U.S. residential property to fully understand the U.S. reporting and tax issues related to their ownership of U.S. real property, in addition to any Canadian tax implications.