Estate taxes are payable on the fair market value of your assets at the time of your death. The amount of estate taxes payable depends on the value of your estate and the province in which you reside.
There are a number of things that you can do to minimize estate taxes, such as:
- Create a living trust. A living trust is a legal arrangement that allows you to transfer ownership of your assets to a trustee, who manages them for your benefit while you are alive and distributes them to your beneficiaries after your death. Assets that are held in a living trust do not have to go through probate and are not subject to estate taxes.
- Use joint ownership. If you own an asset jointly with another person, the surviving joint owner will automatically become the owner of the asset upon your death. This means that the asset will not be included in your estate and will not be subject to estate taxes.
- Use beneficiary designations. Many types of assets, such as bank accounts, life insurance policies, and retirement accounts, allow you to designate beneficiaries. If you designate a beneficiary, the asset will be transferred directly to the beneficiary after your death and will not be included in your estate.
- Make donations to charity. Donations to charity are deductible from your estate for estate tax purposes. This means that you can reduce the amount of estate taxes payable by making donations to charity.
- Use tax planning strategies. There are a number of tax planning strategies that you can use to reduce estate taxes. These strategies can be complex and should be discussed with an experienced estate planning lawyer.
Estate taxes can be a significant financial burden for your loved ones. By taking steps to minimize estate taxes, you can help to ensure that they inherit more of your assets.
This article is for informational purposes only and is not legal advice. Contact us today to discuss your specific situation.