moneysense.caJul 2016 Ontario Joint tenancy
Q: I had joint tenancy with my mother on two properties: a condo in Toronto and a cottage in Kawartha Lakes. She died and I am keeping both properties. My accountant says that he can count the condo as my mom’s primary residence, but that I have to pay capital gains tax on the cottage.
A: When property is owned by more than one party, it is frequently held in joint tenancy with the right of survivorship. Spouses typically hold property as joint tenants, whereby upon the death of the first, the asset passes directly to the survivor and does not make up part of the estate of the deceased.
More frequently, elderly parents are holding property in joint tenancy with their children, which has pros and cons. Assets held in joint tenancy that pass to a survivor typically avoid probate fees (1.5% in Ontario). However, when you transfer an asset even if money hasn’t changed hands, you are deemed to have sold it at market value. Though the properties may have been legally held jointly by the two of you, the properties were still beneficially your mother’s until her death. Case law suggests that the presumption of advancement did not apply and you were technically holding half the properties in trust for your mother.
Every Canadian is entitled to have one principal residence that grows in value tax-free. Your mother had two properties, meaning that one of them was growing in value on a tax-deferred basis. On your mother’s death, she would be deemed to have sold the two properties and one sale would be taxable, regardless of her holding the properties jointly with you. --
intuit.caJul 2016 Taxes and Life Insurance
When you receive a death benefit under a live insurance policy, it’s almost always considered non-taxable and doesn’t need to be reported on your tax return. The only exception is if you decide to cash in your permanent life insurance policy before your death and you receive the cash surrender value. --
intuit.caJul 2016 Canada Inheritance Tax
There is no inheritance tax. Instead the CRA treats the estate as a sale. This means that the estate pays the taxes owed to the government, rather than the beneficiaries paying. By the time the estate is settled, the beneficiary should not have to worry about taxes.
When a person dies, their legal representative has to file a deceased tax return to the government. Any taxes owing from this tax return are taken from the estate before it can be settled. Once the executor has settled the estate, the CRA issues a clearance certificate.
In the deceased tax return, normal income is recorded and non-registered capital assets are considered to have been sold. Thus they appear as capital gains, although there is a principal residence exemption. Further, any non-registered capital property may be transferred to the deceased taxpayer’s spouse.
The value of any RRSP is included as income and taxed at the regular rate. However, it is possible to defer income tax if a spouse or dependent child has been designated as the beneficiary of the RRSP. --
ontario-probate.caJul 2016 Ontario Probate Fees
“Probate fees” (properly known as ‘estate administration tax’) must be paid to the government of Ontario when an estate is probated. Lawyer fees for assisting an executor are separate from probate fees and generally are paid out of the executor compensation.
Probate fees are based on the value of the estate. They are 0.5% on the first $50k and 1.5% on the remainder. Thus the tax on a million dollar estate is 50000*0.005+(1000000-50000)*0.015 = $14,500 --
ontario-probate.caJul 2016 Beneficiary Designations
Many life insurance policies and various savings plans (RRSPs, TFSAs, RRIFs) provide a means for you to designate a beneficiary, so that when the owner dies, the funds flow directly to the named beneficiary. This is commonly done to avoid probate taxes. Alternatively the beneficiary would be "your estate". If accounts do not flow to your estate, you must state this in your will so it is clear they are not subject to the directions in your will otherwise there can be an implied conflict of interest and the courts may have to interpret your will. --
ontario-probate.caJul 2016 Life Insurance
Life insurance is not normally an estate asset. It is a contract between the policy owner that requires the insurance company to pay the owner an amount when the named individual dies. --
ontario-probate.caJul 2016 Executor's Compensation
The executor will generally be entitled to compensation equal to 5% of the total value of the estate. --
ontario-probate.caJul 2016 Ontario Probate
Probate is the Court procedure for formal approval of the will by the Court and appointment of the Executor. It usually takes several days to prepare the application. Once filed with the court, it usually takes several weeks until the grant of probate is received. After this point the Executor has one year to disperse the estate. Probate is required if a beneficiary is a minor. Generally probate is not required after the death of one spouse where all assets are willed to the surviving spouse. --
blogspot.caJul 2016 Albert Executor
In Alberta there is no law that excludes someone from being both beneficiary and executor. This is done all the time, for example where a married couple name each other as their executors and also leave their estates to each other. In cases like that, not only is there no prohibition against the arrangement, but it is clearly the best arrangement that could be made for that particular person's Will. --
justanswer.comJul 2016 Ontario Executor
There are many executors who are also beneficiaries. --
ontario-probate.caJul 2016 Ontario Estate Law
A joint bank account, or jointly held real estate, (between spouses) falls outside the estate. Thus if one spouse dies, the survivor becomes sole owner of these assets and they are not turned over to the executor of the will. --
gblegalclinic.comJul 2016 Making A Will (in Ontario)
Anyone over 18 years of age can make a Will so long as you do not have a mental impairment that stops you from knowing what you are doing. A typed Will has to be dated and signed in front of two witnesses, who must also sign the will at this time. The witnesses must not be named (to receive things) in the Will. All three should also initial all (other) pages. --