For high net worth clients, Estate and Trust Tax planning are essential services that usually can save tens or even hundreds of thousands of dollars over time.

Estate planning is critical if you wish to avoid passing the lion’s share of your wealth to Canada Revenue Agency (CRA) upon your untimely death.

Trusts are highly efficient tax tools that are often confused by many as a complex tax mitigation vehicle. We take the mystery out of these issues and explain the benefits of what’s involved, in easy-to-understand terms.

We don’t try to impress you with our technical jargon. We explain your options in a language you’ll understand and help you establish a structure for your trust that will deliver the desired results.

Estate Planning

The art of estate planning is more than just knowing the tools. Our team will approach the planning of your estate with your unique goals in mind. Our technical expertise has put us at the top of the game and our intimate knowledge of each client’s goals has kept us growing. We’ll structure your plan according to your situation and your philosophy.

What Does Estate Planning Mean?

Planning your estate means managing what you own during your lifetime and beyond, not leaving things to chance or even to just a will. It means taking stock and organizing your business and personal affairs so they continue as you want them to. It means minimizing the costs and taxes associated with the distribution of an estate.

And That Means Planning, Now.

Planning your estate means arranging for the transfer of your assets to the individuals you wish them to be transferred to, both during your lifetime and beyond. It means planning for the years ahead and achieving your goals and your family’s goals by:

• Having a valid, updated will
• Minimizing taxes
• Funding your final wishes
• Planning for the transfer or sale of your business

You might also benefit from the use of a trust, shareholders’ agreement, or a valuation of your business.

Who Needs an Estate Plan?

You do, if you want the protection and continuation of all you work hard for.

You do, if you own any of the following:

• A business
• Real estate
• Investments and savings
• RRIFs or RRSPS
• Life insurance
• You do, if you want to control how those assets are managed beyond your lifetime, and if you want to pass those assets on with the least possible alteration to them. Estate planning protects:
• Your spouse
• Your child(ren)
• Any other relative(s) or friend(s)
• Your preferred charity or other organization
• You do, if you don’t want the government to be your primary beneficiary.

Without a comprehensive estate plan, CRA could take a significant portion of what you’ve worked so hard to build and your assets might not be left as you intended.

Managing what you own beyond your lifetime means not merely having a will, but having a plan. It takes a lifetime to build your estate – spend a few hours now, planning for it.

Trusts

Trusts can be extremely flexible tools used in professional estate planning. A trust is created by the transfer of an asset to a trustee who will look after it for the benefit of another person or persons. A trust can help you with both family-related and tax-related planning issues.

The utilization of a trust in tax planning has many advantages, not limited to the following:

• Freezing the value of one’s estate
• Business succession planning
• Income splitting for adults
• Multiple use of the $800,000 capital gains deduction
• Residence planning, including your principal residence, cottage, and US owned property
• Deferring capital gains
• Inter provincial tax planning (utilizing lower personal tax rates in other provinces)
• Confidentiality, including avoiding unnecessary publicity of your wishes
• Control
• Preserving assets
• Family law protection and protecting family assets
• Providing for special needs (disability)
• Reducing probate fees
• US estate tax planning
• International estates

The type of trust chosen is very important in providing for your wishes. There are a surprising number of different types of trusts commonly recognized for income tax purposes, including trusts created during your lifetime and testamentary trusts which are set up in your will. They form an important part of the toolkit available in planning your estate and achieving your wishes.

Some of the types of trusts that we use to accomplish the needs and wishes of our clients include:

• alter ego trust
• bare trust
• blind trust
• charitable purpose trust
• commercial trust
• discretionary trust
• health and welfare trust
• immigration trust
• inter vivos trust
• joint spousal trust
• personal trust
• non-discretionary trust
• non-resident trust
• henson trust
• mutual fund trust

If you would like to enquire about how trusts can assist you with your wishes and in minimizing your personal income taxes, just call us.

Wills

A legally valid will is central to ensuring that your wishes are followed in a timely, cost-effective and tax-efficient manner. It’s important to review your will every few years because changes in the law or in your life can impact your will.

A will ensures your property will be transferred according to your plan. In the absence of a will, your assets will be distributed by the Province according to its own formula. That formula likely will not reflect your intentions, and it could involve lengthy delays and significant additional costs. As part of our estate planning services, we can help you:

• Take stock of what you own
• Design the allocation of your assets
• Make sure your will is consistent with your comprehensive estate plan
• Evaluate whether your spouse and children will receive sufficient income
• Ensure that your will includes tax-saving strategies which your executor can implement
• Reduce probate costs
• Value your assets
• Have your final tax return(s) filed

Tax Planning

Taxes are a fact of life, and a fact of death. But with effective planning, you can minimize the tax that would otherwise be paid at death. You can also make sure that the plan you intended will not be altered because of consequences of which you were not aware.

Many of the assets you’ve accumulated will be taxed in the year of your death – as much as half your total assets could be lost to tax. That’s not what you’ve worked for, and it’s not the legacy you want to leave behind. There are a number of obstacles you’ll want to avoid:

• A lack of liquidity that could result in your business stopping at the first generation
• A forced sale of assets
• A loss of family control of assets
• Limited choices
• An alteration of your planned transfer of assets, resulting in an inequitable allocation
• A disruption in the smooth execution of your plan

There are many steps you can take now to reduce or defer taxes at that future time. The steps themselves and the combination of them will be as individual as your life and your estate.

A list of your assets and their current value is a place to start. Trust, estate freezes, business ownership structures, and insurance are some of the tools we can use to help you achieve your goals.

For further information regarding our services we recommend you review our Additional Services, the Tax Planning Brochure, or browse through the many articles that Joe has written in the Resource Library.