Most people are unaware that planning an estate is not only about deciding who gets what. It is also about saving your family from additional expenses and potential problems. Canada does not have an estate tax per se, but your estate may be taxed. These taxes can actually cut down the amount of inheritance you leave behind.
However, there is a way to avoid these taxes and make sure that your family gets to hold on to more of your wealth. In this blog, we will discuss the most critical measures that can help you minimize estate taxes in Canada and protect your family from financial problems.
Understand Taxes On Your Estate
Before learning about the strategies, it’s really important to understand the types of taxes your estate might face in Canada:
- Probate Fees – A few provinces even charge fees for the recognition of your will and the appointment of an executor. These fees are charged according to the value of the estate in question.
- RRSP/RRIF Taxes – RRSPs or RRIFs are taxed as income when not transferred to a spouse or dependent child.
Gifting Assets During Your Lifetime
Did you know that you can give away assets while you’re still alive? Well, this will certainly help you to reduce your taxes. This strategy has several benefits. Do you want to know the benefits? Then, read below.
- Reduce the Value of Your Estate
- Enjoy the Giving
- Avoid Future Capital Gains
Take Advantage Of Tax-Free Transfers
Canadian tax laws offer specific provisions that allow you to transfer certain assets without triggering taxes:
- Spousal Rollovers – RRSPs, RRIFs, and real estate can be transferred to your spouse without tax consequences, and taxes are only paid when the spouse dies.
- Principal Residence Exemption – Your family home is usually not subject to capital gains tax as long as it is your principal residence.
With these provisions, you can easily minimize the taxes that are charged on the estate.
Minimize Estate Taxes With KMR Financial
Do you want to minimize your estate taxes? KMR Financial is the one you should go to. We know that estate taxes in Canada can certainly reduce the amount you have inherited. But don’t worry!
We can help. With years of experience in this industry, we can certainly minimize taxes and ensure your family receives the maximum benefit from your estate. So, what are you waiting for? Contact us right away at 226.973.8423 for more information.
