Planning for the transfer of your business and estate is a crucial part of financial planning.
Estate taxes can be a financial hardship on your loved ones, but with careful planning they can be reduced, and more importantly, anticipated.
At KWB, we help you and your family plan for the transfer of your estate. We can advise you on the tax implications of things like:
We will work closely with you and your family to ensure that your finances are taken care of in a smart, efficient manner, and there is no unexpected financial burden on your loved ones.
Blog posts about Wealth Transfer Planning
Principal Residence Exemption
If you have sold your home and it is your principal residence then you should be able to use the principal residence exemption to reduce or eliminate any capital gain for income tax purposes on the sale of the property.
CRA states that a principal residence can be a house, cottage, condominium, apartment, trailer, mobile
Registered Education Savings Plan (RESP)
An RESP is an education savings account that is registered with the Government of Canada that helps you save for a child’s or grandchild's post-secondary education.
With an RESP, you may be able to receive other saving incentives, such as the:
Canada Learning Bond
Basic and Additional Canada Education Savings Grant
There are two different types
Spousal Loan - Tax Savings Opportunity
If you are in a much higher income tax bracket then your spouse and have investments outside of an RRSP or TFSA then a spousal loan could reduce your taxes.
Money that is earned directly by you through employment or investing is considered yours and can’t just be given to your spouse to invest.
Applying for a trust account number or asking for a clearance certificate
Asking for a clearance certificate
A clearance certificate certifies that all amounts for which a deceased taxpayer is liable to Canada Revenue Agency for have been paid. If a clearance certificate is not obtained upon a taxpayer’s death, as the legal representative, you can be liable for any amount the deceased owes. A
The Enlightened Investor-Retirement Income
Eventually investors move from the “saving-years” to the “drawing-years”, when they want to start drawing retirement income from their portfolios.
This can be confusing. For many the natural inclination is to liquidate their diversified portfolio in favor of income-producing stocks or bonds. However, the idea that retired individuals should load up on dividend-paying common shares
Direct Beneficiary Designation - RRSP or RRIF
If you are considering a direct beneficiary designation for either a Registered Retirement Savings Plan (RRSP) or a Registered Retirement Income Fund (RRIF), you should be aware of some negative consequences that can occur.
A direct beneficiary designation can result in unintended tax consequences to the estate, the inequitable treatment of heirs or the distribution
Capital Dividend Account
The capital dividend account (CDA) is used to track the amounts that can be paid out to shareholders, tax free.
How is the capital dividend account balance calculated?
Capital gains and losses – The balance increases by 50% of any capital gains your company incurs, and decreases by 50% of any capital losses your company
US Tax Filing
Are you a US citizen? Do you spend more than 120 days per year in the US? If so you may be required to file a US personal tax return.
Outstanding Shareholder Loan
It is very common for owner-managers to draw funds from their company during the year and find themselves with an outstanding shareholder loan at year end.
These balances are often cleared up by recording dividends or bonuses to the shareholders and the problem is solved. If the loan is not repaid during the fiscal
Changes to the Principal Residence Exemption
The Canada Revenue Agency (CRA) made a major change to the Principal Residence Exemption that affected Canadians when filing their 2016 tax returns. Regardless of whether the sale is exempt or not, individuals are now be required to report the sale of their principal residence on their personal tax return.
Under the Principal Residence Exemption
Proposals from the Department of Finance on July 18, 2017 included changes to the taxation of split income.
The most common form of split income is income from a dividend from a related entity that is not excluded from being categorized as such.
Prior to 2018, shareholders of privately held companies over the age of
Protecting Treasured Family Assets with Life Insurance
Do you want to protect the value of your estate for your heirs and preserve those cherished family properties and other assets? If so, read on for more info.
Changes to the Eligible Capital Property Rules Effective January 1, 2017
Eligible capital property (ECP) includes items such as goodwill, patents, trademarks, customer lists and other intangibles with no fixed lifespan.
As of January 1, 2017, the new rules for eligible capital property will come into effect and will have a significant impact on tax deferral opportunities for companies that dispose of eligible capital property.
Graduated Rate Estates – New Rules for 2016
Starting for 2016 taxation years, inter vivos trusts, trusts created by will and certain estates will be subject to the top taxation rate. There are two exceptions to this change: graduated rate estates and qualified disability trusts.
Graduated tax rates will still apply to these types of estates and trusts.
Income earned and retained in
The Enlightened Investor: Powers of Attorney for Property
A power of attorney for property is a written document by which a grantor appoints an attorney to act as a substitute decision maker with respect to the grantors property or financial affairs.
This grant of power becomes effective immediately upon the grantor signing the document unless otherwise indicated. While a General Power of Attorney
Estate Planning Gifting Strategy
An estate planning gifting strategy is basically when you start to give away some of your assets prior to death in order to optimize taxes within the family.
Usually, an estate planning gifting strategy refers to how we will distribute our assets when we die. But you might be overlooking significant tax savings by not
Why should I review my Unanimous Shareholder Agreement?
If you haven’t reviewed your Unanimous Shareholder Agreement (USA) recently, here are 3 excellent reasons why you should do so:
In 2006, the Federal Budget introduced a second dividend rate. Corporate earnings in Alberta, up to $500,000 are taxed at 14%; when a dividend is paid to an individual shareholder this “ineligible-dividend” is taxed
If charitable giving is something that you are interested in and you want to see the tax benefits obtained recently by one of our clients, read on for more information.
The Enlightened Investor:Calculating the Cost Base of a Security Held in Multiple Taxable Accounts
Congratulations! You just sold and realized a profit on that promising investment (stock, mutual fund, ETF etc.). When you’re done planning how to spend your windfall you might also consider how much tax you owe on that gain. Unless the sale occurred within a non-taxable RSP or TSFA.
Normally, this is fairly straightforward. You
The Enlightened Investor: What is meant by “market return”?
The investment industry and media often refer to the “market” and the “market return”.
Or that the market was up or down on the day and that a portfolio manager's return outperformed or underperformed the market return. So what exactly do they mean and how does it relate to you?
The market generally refers to
The Enlightened Investor - Moving Small LIRA’s to Your RSP
When you have a job transition, you may transfer your pension plan savings to a locked-in-retirement account (LIRA).
LIRA’s are similar to Retirement Savings Plans (RSP’s) but with more restrictions. Adding another investment account will also add extra administration to managing your retirement savings.
Alberta pension legislation allows people age 50 or older to transfer
The Enlightened Investor: Is Your Portfolio Leaking Tax?
It may be obvious to state that an investor only keeps the after-tax return. It is less obvious how to minimize the tax leakage from your portfolio.
A good starting point is to identify the two primary causes of tax; portfolio turnover and an inefficient portfolio structure.
Taxes resulting from portfolio turnover can cost you
Converting Your Business into Cash with Life Insurance
In the second part of our life insurance series you will find out how to help your estate access the wealth represented by your shares in your business and your shareholder loan through the proper use of insurance.
The Value of Advice
What is the value of advice? When it comes to portfolio management, the overall value of the advice can be measured by comparing the performance of one portfolio over another in a specific amount of time. However, when it comes to wealth management, the overall value of the advice discussed regularly with clients is much more difficult to measure. Read on to see some real life examples of the value of the advice given.
Life Insurance Creates an Estate Value
Life insurance has many applications and in this first of a 3 part series you will see how it creates an estate value when little to no value previously existed. To learn more, read on.