Many Ontario residents are unclear about the laws relating to the debts of an individual who has passed away. Some worry about being pursued by debt collectors after a relative dies, and others are concerned that their inheritance will be eroded by a benefactor's credit card bills and other debts. While a last will and testament is an important estate planning document, it addresses the distribution of assets and not the payment of debts.
When an individual in Ontario passes on, that person's estate may be require to pay certain taxes. At the time of death, the executor of an estate is required to file a terminal tax return on that person's behalf. Any capital property that is owned by an individual will be considered sold just before the person's death. Therefore, there may be capital gains or capital losses that affect how much tax an estate owes.
Financial advisers say it is important for Ontario couples to discuss their finances and be prepared for the death of a spouse. Otherwise, the loss of a spouse can put an enormous financial strain on the survivor. Reports indicate that many Canadians do not have wills. Excuses often heard include not being able to decide on an executor or a specific guardian because a person is afraid they will change their mind.
Ontario residents may be interested in an explanation of the tax implications for different types of inherited assets. Either the estate of the owner of the assets or the beneficiary may face taxes depending on the type of inheritance and the instructions to the executor. In some cases, a decedent's taxes will be paid by the estate, provided that the executor of the estate was directed to do so. The beneficiary would then inherit these funds as taxpaid money, and no tax would be owed.
While experts recommend that everyone undertake thorough estate planning, it is especially important for Ontario residents with children, substantial assets or a business. Proper estate planning ensures not only that someone's wishes will be carried out upon their death, but it also makes life easier for the executor and their heirs.
Residents of the greater Toronto area may be interested in some information regarding the three types of documents that every estate plan should contain. These documents help to ease the burden on the executor and dictate what will happen to a person's assets after his or her death.
Ontario residents who have taken steps to plan the execution of their estates after they pass away may need to consider reviewing and revising the relevant documents occasionally. Estate plans may need revision every few years as circumstances change.
When it comes to deciding on the future of a family cottage for residents of Ontario, the owner will need to address several questions. While the decision on who should inherit the cottage could be challenging, six tips can help the owner with their estate planning as they try to determine who would be a good candidate to take over the cottage.
Estate planning is not the most popular subject to consider, and people in Ontario sometimes might put it off as long as possible. However, timely estate planning offers several advantages, such as reducing overall taxes in addition to taxes upon the person's death. Setting affairs in order as soon as possible can also ease the transition of business interests and is conducive to ensuring that estate planning goals are achieved.
Ontario couples who delay planning for their death may be running many risks. Estate planning can help outline how a person wishes his or her funeral and burial to be conducted. It can also help individuals to provide details about the distribution of their assets so that the courts do not dictate these details.