Estate Administration

Total 493 Posts

SHARES ISSUED FOR NOMIMAL CONSIDERATION: BE WARY OF VALUATION

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Recently, the Canada Revenue Agency (“CRA”) was asked to comment on the tax consequences that may result from implementing an estate planning or income splitting arrangement which involves the issuance of shares that entitled the holder to discretionary dividends, for nominal consideration. The CRA was presented with a hypothetical small business corporation (“Opco”) with voting common and non-voting preference shares, both having the right to discretionary dividends to the exclusion….

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Business Succession Planning, Canada Revenue Agency, Estate Administration, Estate Planning, Investments, Small Business, Succession Planning, Tax Issues

Principal residence exemption – renting to a child

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The Canada Revenue Agency (CRA) was asked if a taxpayer’s property designated as his “principal residence” but rented and lived in by his son continued to qualify as his “principal residence” for the purpose of claiming a principal residence exemption to shelter a gain from personal tax.
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Canada Revenue Agency, Cottage, Disability, Elder Care, Estate Administration, Estate Planning, Executors, Real Estate, Tax Issues

INCOME FROM A U.S. TRUST: CAN IT EVER BE TREATED AS DIVIDEND INCOME?

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Sometime ago, a relative of a Canadian taxpayer died in the US and she left her money in a charitable trust, with some of the income bequeathed to the Canadian taxpayer annually. The trust income is derived mostly from US dividends. With a series of proposed adjustments to her personal tax returns, the taxpayer asked the Canada Revenue agency (“CRA”) why this income could not be treated as dividend income….

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Canada Revenue Agency, Canadian and US Tax Treaty, Estate Administration, Estate Planning, Interest, Investments, Tax Issues, Trusts, United States, US Taxes

‘Baby boomers under 75 set to inherit $750 B in next decade’- CIBC

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I have a friend who inherited 1 million dollars from a distant uncle. Sounds like a healthy inter generational wealth transfer occurred. She has no children. She does not worry about whether she will be leaving an inheritance. Instead, she enjoyed a trip around the world and is keeping money aside for her golden years……..

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Charitable Giving, Elder Care, Estate Administration, Family Conflict, Philanthropy/Charitable Giving

ESTATE PLANNING REFRESHER: TRANSFER OF LIFE INSURANCE

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From time to time, we are asked about the tax consequences of transferring life insurance policies particularly in the context of some common (or not-so common) estate and trust planning scenarios involving transfers. As most people know, when a transfer of ownership of a life insurance policy occurs, the transferor reports a taxable gain, which is essentially the proceeds of disposal less the transferor’s’ adjusted cost basis (ACB) in the….

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Business Succession Planning, Canada Revenue Agency, Estate Administration, Estate Planning, Guardianship, Insurance, Spouse, Tax Issues, Trusts

Are Charities Second-Class Beneficiaries?

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Charities face a bizarre challenge when administering gifts by will.   It should be simple.   After the donor’s death, a charity named as a recipient of an estate donation becomes the beneficiary of a trust.   The money is owed to the charity and the interest in the trust is legally enforceable.   Charities, however, are often considered to be second-class beneficiaries. What does it mean to be a “second-class beneficiary”?   The idea….

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Charitable Giving, Estate Administration, Philanthropy/Charitable Giving
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