Inheritances in Canada are expected to climb to a level as high a $1 trillion over the next decade. Experts say both testators and beneficiaries in Ontario need to be prepared with proper estate planning measures.
With this information in hand, estate planning may become even more complex and will need the help of experts such as an experienced estate planning lawyer. This is the era of remarkable wealth transfer for parents and children, and there are issues connected to both receiving and leaving inheritances.
Inheritance pressures are on
Most millennials surveyed said it is a parent’s obligation to leave them an inheritance, while their parents – mostly baby boomers – only partially agreed. Yet, most parents feel obligated to leave something to their children, leaving them to worry not only about saving for their own retirement, but also about leaving an inheritance to their kids.
In any case, one way of giving is to make gifts to children and grandchildren, since there are no tax implications attached to a cash gift. Grandparents may even opt to set up a Registered Education Savings Plan (RESP) for grandchildren. A trust might also be another solution.
Maximizing an estate
Having a tax-free savings account (TFSA) can minimize annual taxes as well as taxes upon death. Diversifying wealth can also help in this regard. Hold stocks in one account and bonds in another. Beneficiary designations, using trusts, arranging an estate freeze or using various strategies regarding insurance may also reduce probate and tax costs.
All of this can seem intimidating if you’re new to estate planning. But with the proper help and guidance, estate planning needn’t be a headache. Getting your plans done correctly can save a lot of time and grief when it comes time to administer the estate.