Estate planning for Ontario seniors.
Tax-efficient wealth transfer for Ontario homeowners, retirees and business owners. The cottage, the RRSP, the family home and the corporation, all sorted before the family has to deal with it. Handled by a CPA, CA with 20+ years of Ontario tax experience.
Accepting new planning files · Whitby, Ontario · Owner-operated CPA, CA
The tax bill on your estate is almost always avoidable.
Most Ontario seniors do not realize how much tax their estate is going to pay. A $500,000 RRSP at death can become $250,000 of tax owing in a single year. A cottage held since 1980 can trigger a capital gain larger than what the family paid for it. Private corporation shares can sit in the estate for years while the CRA sorts out the deemed disposition.
Almost all of this can be planned around. Draw the RRSP down over a decade and the lifetime tax bill drops by roughly half. Set up multiple wills and your private corporation shares never see Ontario's Estate Administration Tax. Use the spousal rollover and the deemed gain on the cottage waits until the second death. We do the math, model the options and coordinate with your estate lawyer so the plan actually gets signed and filed.
What estate planning looks like with us.
Estate planning is a series of decisions about how to hold each asset, who gets named on the beneficiary forms and how the corporation passes to the next generation. Here is how we work through it with you.
RRSP and RRIF de-accumulation
We model the difference between holding the RRSP to death and drawing it down over five to fifteen years. For most seniors with $300,000 or more in registered funds, the planned drawdown saves between $50,000 and $150,000 in lifetime tax. We integrate the model with CPP, OAS, pension splitting and the Old Age Security clawback threshold.
Principal residence and cottage planning
The home, the cottage, the investment property. We work out which one to designate as principal residence for which years, whether a section 45(2) election should keep the home covered while you are in long-term care and how to transfer the cottage to the next generation without triggering the full deemed gain at once.
Multiple wills strategy
In Ontario, a primary will (probatable) plus a secondary will for private corporation shares and other non-probatable assets can save 1.5% Estate Administration Tax on the full value of the corporation. On a $2M private company, that is roughly $30,000 saved with one piece of paper, drafted by your lawyer and coordinated by us.
Spousal rollovers and beneficiary designations
Most assets transfer tax-deferred to a surviving spouse under section 70(6) of the Income Tax Act. RRSP, RRIF, TFSA and life insurance can also be set up to bypass the estate entirely through named beneficiary forms, avoiding probate on those amounts.
Estate freezes for business owners
If you own a private corporation, a section 86 reorganization caps your future personal tax at today's value of the shares. Future growth accrues to your children or a family trust. We coordinate the freeze with the Lifetime Capital Gains Exemption (where the corporation qualifies as a Qualified Small Business Corp), corporate-owned insurance and the Capital Dividend Account at death.
Charitable giving and year-of-death rules
Donating publicly listed securities in-kind triggers zero capital gain on the gift. You still get the full donation tax credit. In the year of death and the year before, the donation limit jumps from 75% to 100% of net income. Combined with a bequest in your will, this can offset most of the tax owing on a large RRSP.
Four moves that pay for themselves.
These come up in almost every first conversation we have with an Ontario senior. Worth running the numbers on each before deciding anything.
The RRSP drawdown math
A 69-year-old with $500,000 in RRSPs and limited other income. Take nothing extra and the full amount lands on the final return at roughly 50% average tax, costing the estate around $250,000. Withdraw $50,000 a year for ten years and the average rate drops to about 25%, costing roughly $125,000 in tax over the same period. Same money, half the tax.
The retirement home and the principal residence
When you move into a retirement or long-term care home and rent out your house, the property usually becomes a change-of-use event under section 45 of the Income Tax Act. That triggers a deemed disposition at fair market value. A section 45(2) election lets you keep the principal residence exemption running for up to four extra years while the home is rented. Filed once on your return for the year you moved out.
Joint accounts with adult children
Adding a child to your bank account or the title of your home does avoid probate, but it can create more problems than it solves. The Supreme Court of Canada in Pecore v Pecore (2007) held that joint accounts with adult children are presumed to be held in trust for the estate, not gifted to the child. It can also expose the asset to the child's creditors, divorce or bankruptcy. There are usually better ways to reach the same goal.
The disability tax credit while you can still apply
Even if you are not yet at the end of life, applying for the disability tax credit while you can still be assessed by your doctor is far easier than your executor doing it after the fact. Once approved, the credit can be claimed retroactively for up to ten years on Form T2201 and renewed on each return going forward.
Three planning conversations we have most often.
Seniors with a house, a cottage and an RRSP
The most common profile across Durham Region. House paid off, cottage on a Kawartha lake, $500K to $1.5M in RRSPs. The planning work is mostly the RRSP drawdown model, picking which property carries the principal residence exemption and updating the beneficiary forms on every registered account.
Business owners approaching retirement
Private corporation, retained earnings, maybe a holding company. An estate freeze caps the personal tax at today's share value while the next generation absorbs the growth. We coordinate the freeze with corporate-owned insurance and the multiple-wills setup so the family does not lose 1.5% to probate on the company.
Widows and widowers planning the second estate
The first death triggered a spousal rollover, so most assets shifted over tax-deferred. The second estate is where the deferred tax bill actually lands. We plan the drawdowns, beneficiary structures and charitable bequests so it is not a $400,000 surprise for the kids.
Questions seniors ask first.
When should I start estate planning?+
Do I need a lawyer too?+
Can I reduce tax by gifting assets to my children while I am still alive?+
What about the TFSA at death?+
How do you bill for estate planning?+
Already dealing with an estate after a death? See our estate accounting page for executors.
Ready to plan it properly?
Book a 30-minute planning consult. We run the RRSP drawdown model, the principal residence analysis and the beneficiary review in the first meeting.
Book a planning consulthello@ekcpapro.com · (289) 985-0575 · 70 Taunton Road East, Whitby