How gifts to Hope and Healing International can reduce taxes in your estate
You can transform the lives of children with disabilities in developing countries while reducing or eliminating taxes payable in your estate.
The first step is to sit down with your financial planner or tax consultant and estimate what taxes will be payable at death or, in the case of a couple, at the passing of the last spouse.
Make an inventory of your assets and estimate how much income tax will be due at death. For instance, a cottage or other real estate, rental property, stocks, mutual funds, business assets, etc., might have capital gains or recapture of capital cost allowance which will be triggered at one’s passing. These will have to be included as income in your terminal or final tax return and possibly result in significant taxes to be paid at death.
In addition, any registered fund (RRSP/RRIF) balances are taxed at death. In fact, where there is no spousal rollover, an RRSP/RRIF is the most heavily taxed asset in an estate. The RRSP/RRIF balance is taxed as income upon death of the second spouse and 40% to 50% can be taxed away.
Capital gains on assets in one’s estate and balances of registered RRSP/RRIFs can result in huge tax hits. Taxes at death can make federal and provincial governments major beneficiaries of
The good news is that testamentary charitable gifts (gifts that are triggered at the passing of an individual) can reduce these taxes at death or even eliminate them completely.
*Note: Beneficiary designations are not permitted on accounts held in Quebec.
NOTE: While the information and opinions expressed in this publication are compiled with the greatest of care, they are not meant to be accepted as legal or financial advice. Opinions expressed are solely the personal opinions of the authors. Material contained herein is provided for general information and is subject to change without notice. Hope and Healing International assumes no liability for claims or losses arising from use of this publication. Readers are urged to always consult their own professional advisors.