Pre-Budget Tax Planning

The Federal budget for 2020-2021 was initially scheduled to be presented in the House of Commons on March 30, 2020.  This was of course delayed as a result of Covid-19.  Fast forward to January 2021, and a lot has changed with Canada’s economic situation.  Are tax increases coming?  Most likely.  The Federal government has been very open that the typical “1%”, …

5 Strategies Where COVID-19 Can Reduce Taxes

There are are at least 5 strategies that can be executed under existing tax legislation to use COVID-19 to generate tax relief.  These strategies were originally posted by us 7 weeks ago on March 19th.  In particular, strategy No. 5 discussed below anticipated a reduction in the prescribed interest rate to 1% from the current rate of 2%, which will now be …

Changes to the Estate Administration Tax Effective January 1, 2020

The Estate Administration Tax   The Estate Administration Tax (“EAT”) (formerly known as “probate fees”) is a tax charged on the total value of the deceased’s estate.   The current EAT rates are: $5.00 for each $1,000 (there is no EAT payable if the value of the estate is $1,000 or less) of the first $50,000 of the value of …

Choosing the Will or Family Law – A Surviving Spouse Has the Choice

On the death of a spouse, the surviving spouse has the right to choose between accepting his / her entitlement under their partner’s will (where there is a will) or claim an equalization of net family property (an “equalization payment”) under section 6 of the Family Law Act.[1]   Where there is no will, the surviving spouse has the right …

Henson Trusts – What Are They and Why Are They Used?

One of the ways an individual may qualify for income support under The Ontario Disability Support Program Act[1] is to qualify under the definition of a “person with a disability.”  Generally, to qualify as a person with a disability, the individual must have a substantial physical or mental impairment that is expected to last at least 12 months and substantially …

Powers of Attorney – What Are They and How Do They Work?

A Power of Attorney is a document in which you give to someone else (your “attorney”) the right to make decisions for you in the event that you are no longer capable of making decisions on your own.   There are two types of Power of Attorney:   Power of Attorney for Personal Care – The person you name is …

Donations Made By Graduated Rate Estates

In 2016, the Department of Finance introduced the “graduated rate estate” (GRE).  Since that time, any special relief in the Income Tax Act which applied to testamentary trusts now only applies to GREs.  There are various advantages to an estate which is designated a GRE.  One of the most significant benefits relates to testamentary donations.   What is a Graduated …

Milne Decision Overturned

In September 2018, the decision of Milne Estate (Re)[1] was released and cast doubt whether the long-standing practice of preparing two Wills—one, which is submitted to court for probate and the second, which is not and is used to reduce probate fees  (also known as Estate Administration Tax)—could continue to be used as an estate planning tool in Ontario to …

Minimizing the Estate Administration Tax (also known as “Probate”)

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 …

Estate Administration Basics

When a close friend or family member passes away, you may be responsible for dealing with their affairs, which includes administering their estate.  There is usually no need to rush to administer the estate.  Usually, the first duty required of the estate trustee is to deal with the funeral arrangements.  The estate trustee has an obligation to deal with the …