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Perspective – Estate Process Part 4 : Practical Steps

Estate Process – Part #4

As the Estate process continues, consider some of these practical steps that may help achieve a desired & efficient transfer of estate assets.


Some good, cost-effective estate planning can be achieved through the following opportunities. The key here is to determine the most appropriate and tax efficient distribution of your assets to provide for the care of those you leave behind.

1. Establishing appropriate named beneficiaries

Naming beneficiaries on products such as life insurance, RRSPs, Pensions and TFSAs will take those assets out of your estate and in most cases transfer them directly to your beneficiaries.  It is important to note that any tax obligations remain the responsibility of the estate.  It is also important to ensure that your named beneficiaries are consistent with and in the same percentages as desired or directed in your Will.  For some estates it may be best to distribute all assets through the direction of the Will.

2. Consider the spousal roll over provisions

CRA provides for a spousal roll-over provision that will defer tax obligations for the surviving spouse.  This means that on the death of the first spouse, there would be minimal tax burden on transferred assets. A significant tax burden could restrict the survivor’s ability to manage life financially.

3. Setting up joint ownership of some assets

Establishing joint ownership of some assets (either with survivorship or as joint tenants) can allow for an efficient transfer of ownership at death.  Some or all of these assets will generally not form part of an estate.  Transferring ownership of property (i.e. real estate, equity investments) may cause a taxable disposition or future tax obligation.  It is important to seek good counsel on these decisions.

4. Possibilities of trusts

Some of the tax advantages of trusts have been reduced in recent years.  A trust can be established while you are alive or set up as instructed in your will.  There can be trusts for disabled dependents, families and for charitable wishes.  Trusts can take different forms and are generally fairly complex demanding annual filings and reporting by trustees.  Again, good counsel is required.


Life Insurance policies can be your estate’s best friend.  Death benefits are tax free and can be paid directly to your estate or beneficiaries.  There are a variety of insurance policies and each have advantages for the right circumstance.  Consider the advantage of a tax free death benefit to your estate or beneficiaries.  You may want to consider how your life insurance policies can provide increased benefits through available dividend options.  Some estates will have an unavoidable tax obligation at death, and life insurance benefits can provide the means by which your estate will not be eroded by these taxes.  In other words, make sure your life insurance is working as best as possible for you.  Good advice from an insurance professional is important.


Many people have had a special interest in their church and in specific charities throughout life.  These charities can provide your estate with interesting and tax effective options that in turn provide you with the comfort of knowing that you are able to include a lasting legacy and contribution as part of your estate.  Charitable donations can counter a portion of the potential tax obligations calculated on your terminal tax return.  There are a number of provisions allowed by CRA for estates to direct funds or assets to registered charities and reduce tax obligations (i.e. donating securities).  Most of us would rather support a charity of our interest and choice then to have more taxes paid.

Next time, our final article in this series, yet maybe one of significant importance!