With tax season well underway, what better time to discuss the importance of having a well thought out tax plan, in life and after you pass. At MacMillan Estate Planning, we build your tax plan directly into your Strongroom to protect your life and your legacy plans.
According to a 2022 AngusReid study commissioned by Willful, 65 per cent of Canadian’s don’t know how their estates will be taxed after they pass away. There are four key estate planning tips to help you minimize the future tax impact for your family/beneficiaries after you pass away.
- Understand how you’re taxed after you pass away:
- You will still have to pay taxes after you pass away before your beneficiaries receive their inheritance. Some items on your final tax return will likely include any outstanding income, capital gains taxes on any asset you own and capital gains on properties outside of your principal residence.
- Recognize which assets aren’t covered by your will:
- Set aside time to determine which assets flow through your estate to help you understand how your estate and money are taxed. Not every asset is automatically covered (i.e. joint assets will automatically transfer to the person still alive).
- Leave a legacy gift:
- When you leave a legacy gift/charitable donation, the contribution is tax deductible. This can be added as a tax credit on your final income return, which reduces overall taxes.
- Understand how gifts to your beneficiaries will be taxed:
- Taxes must be paid prior to beneficiaries being paid out of your estate so the overall amount in your estate will diminish before being distributed to those names in your estate. It is important to think about how this impacts your total gifts.
These are just a few tax tips that are important to think about when it comes to estate planning. Let the experts at MacMillan Estate Planning help you to create a tax plan as part of your Strongroom to ensure you and your estate are well equipped for the future.
At MacMillan Estate Planning, we can help you create a fulsome tax plan to build into your Strongroom to protect your legacy. Our team of dedicated estate planning specialists are dedicated to supporting you with your overall plans and long-term goals. To learn more or to talk to an estate planning professional, contact us today.
