Income Splitting Post-Morneau’s Tax Proposals (Part I)

A prescribed rate loan strategy allows high-income earners to income split with their family members (spouses, children, grandchildren, etc.) who earn income taxed at a lower marginal tax rate or earn no income at all.   The strategy requires the high-income individual to make a loan directly (or indirectly through a trust) to one or more family members.  Commonly, a family …

What is Probate and How Can the Fees be Reduced?

Applying for Probate   Applying for probate is the process of registering the deceased’s Will with the Ontario Superior Court of Justice and applying for a “Certificate of Appointment of the Estate Trustee” (the executor).  Probate also requires the payment of the estate administration tax.   A Will must be probated in order to formally pass assets from the deceased …

10 Consequences to Dying Without a Will

Regardless of age or personal wealth, there are many Canadians who do not have a Will.  Although the thought of preparing a Will may seem to be premature or too burdensome for some, the consequences of dying without a Will can be severe.   If you die without a Will (this is referred to as dying “intestate”), the following complications/challenges …

Update on the July 18th Tax Proposals

On July 18, 2017, Finance Minister Morneau announced changes to the Canadian tax system.  The announced changes were marketed at being aimed at improving fairness in the tax system.  The announcement targeted the following:   Income (dividend) sprinkling and multiplying the lifetime capital gains exemption (LCGE); Converting dividend income into capital gains (known as “surplus stripping); and Passive investment income …

Valuing an Interest in a Discretionary Trust

  A trust is not a legal entity or person.  A trust does not hold title to property and cannot hold title to property.  The trustee(s) hold legal title for the benefit of the trust’s beneficiaries.[1]  Traditional trust law principles hold that a beneficiary of a discretionary trust does not have a property interest in the trust.  Such a beneficiary …