Estate Planning and Tax Services
Estate planning is about protecting the interest of your family and loved ones, while minimizing or eliminating estate taxes, inheritance taxes and probate fees. Our team of professional accountants is trained to give you and your family the most flexible options with respect to tax and estate planning.
A trust is a legal entity that can be set up to help in achieving your estate planning goals. There are several different types depending on the purpose and timing of when they are set up. We work with your layer to establish the ideal trust for your situation. Often we can reduce the estate taxes, or inheritance taxes using a structure involving one or more trusts.
- Family Trusts – These can be used to distribute income from a private corporation among family members. These structures have worked well in the past but new proposed legislation is challenging them. See our recent news article.
- Testamentary Trust – This type of trust is automatically created upon the death of an individual in Canada. There may or may not be a necessity to file returns for a testamentary trust. It is best to contact us so we can discuss your particular situation
- Alter Ego Trust – can be used to segregate certain assets to be left to specific beneficiaries of the trust. This can be a very powerful tool as any assets held by an alter ego trust are outside of the will and the estate.
- Other Trusts – There are a multitude of trusts that can be set up depending on your personal situation. Let’s have a discussion if you are thinking a certain structure is right for you and your family
New Legal and Tax Framework for Estates in BC and Canada
In the past 2 years we have seen many changes with respect to estate laws and taxes. It is difficult to keep up with the new rules so it is important to have a professional team involved in your tax planning process.
- Wills, Estates and Succession Act (WESA) – This was enacted in 2009 and introduced a multitude of changes in BC. We work with your lawyer to ensure that all angles are considered when working through your estate plan
- Graduated Rate Estate – CRA introduced new legislation in 2015 impacting the taxation of testamentary trusts. These trusts were able to use the same graduated tax rates as an individual in the past. There is now a 3 year limit to these lower rates and it is subject to certain criteria. Please contact one of our professionals to discuss the particulars.
We excel in assisting clients with estate planning. It is advisable to have a plan set up early in order to avoid potential issues. It is also important to update your plans and your will if your circumstances change. For example, did you start a business, get marries or separated, did you have kids, are your retired or planning to retire soon? These are all events that should prompt you to review your tax and estate plan.
- First off, ensure that you have a will. We can assist with finding a lawyer who is a good fit for you and your family. Your will may need to be updated based on any planning decisions made throughout the process. We will work with your lawyer to ensure that your will includes the items that are necessary to ensure a smooth transition of assets to the next generation. We also work to minimize any inheritance taxes and death taxes. We also consider what not to include in the will in order to reduce probate fees to the government. This is where a trust may be necessary
- Assessment of your goals – we will examine your personal estate goals and determine the optimal structure based on your personal circumstances
When Someone Dies
We can assist you and your family with the tax filings required when someone passes away. This is a fairly complex area of taxation, and there are many different types of returns that may need to be filed. Here is a short list of what may be required:
- Date of death or Final tax return – This return must be filed by anyone who is deceased in the year. Similar to the regular T1 personal income tax return that is required to be filed annually by all individuals in Canada. The difference with the final tax return is that all assets of the deceased are considered to be sold at fair market value at the time of death. There are several tax deferral and reductions strategies that can be implemented if proper planning is conducted ahead of time. We can assist with simple, to very complex final tax returns.
- Rights and Things return – this is a special return that may need to be filed in addition to the final tax return
- Estate Trust Return – If income producing assets are held by the estate for a period after death, an estate return is typically required. Again there are many planning opportunities here so please discuss with one of our team members.
Small Business Owners
There are some special estate planning points relating to small businesses that need to be considered.
Double Taxation - In some cases double taxation can occur if proper planning is not conducted ahead of time.
Undesired division of assets – do you want to leave the business to one heir and other assets to another? There are important estate structuring considerations to think about.
Get In Touch
Contact us today for a no obligations consultation!
Janice Tai CPA, CA
Janice was born and raised on the North Shore and couldn't think of a better place to be! Janice graduated from Queen's University with a Bachelor of Commerce degree in 2004 and joined one of the "big-four" accounting and tax firms in Toronto where she qualified as a Chartered Accountant in 2007. Janice has been working in Vancouver since 2012, and partnered with Cahill CPA in 2013. She brings over 10 years of experience and especially enjoys helping clients with a variety of tax planning. She specializes in estate & trusts, as well as succession & estate planning. Janice likes to play tennis and travel- her favourite destinations include Turkey and Kenya. She and her husband welcomed a new baby daughter in 2016.