Planning Ahead. A Straightforward Guide to Estate Planning & Administration

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1 Planning Ahead A Straightforward Guide to Estate Planning & Administration

2 The time to plan is now. Don t wait until it is too late to get your estate in order. Planning ahead makes everything much easier for your family and friends and it is the only way to ensure your wishes are honoured. To help get you started, there are five steps to follow when putting together your plan: Step 1. Prepare an inventory of your assets and liabilities Step 2. Define your estate planning objectives Step 3. Determine how to achieve your objectives Step 4. Have an advisor assist you with the legal and taxation issues Step 5. Periodically review your plan

3 How we can help. Your Crowe MacKay advisor can walk you through the various options including ones you may not have considered and advise you of the related tax implications, including: the advantages and disadvantages to gifting while alive how transfers to a spouse or partner are treated how assets not left to a spouse or partner will be taxed what are the tax implications when making bequests what income taxes would be due from capital gains how registered plans (RRSPS and RRIFS) are treated how family farm properties can be passed on what u.s. estate taxes might be applicable

4 As the Legal Representative... If you have been selected as the executor or appointed the administrator of an estate, you must know that this appointment is an indicator of the amount of trust that has been placed in you. Honouring that trust however can be challenging as you navigate through unfamiliar legal and financial obligations during what is often an incredibly stressful time. You will have a number of questions that we can help you answer: What should you do first? As the legal representative, you will need to contact the Canada Revenue Agency as soon as possible to notify them of your appointment, and to provide them with the date of death and appropriate documents. Was the deceased paying tax by instalments? If so, no further payments have to be made unless they were due before the date of death but not paid. What about CPP and Old Age Security payments? These pensions are paid for the month in which the taxpayer died and have to be reported on the tax return for the deceased. Cheques for the subsequent months must be returned. What do you do with the GST/HST credit? These payments are issued in July, October, January and April. If the death occurs during the month of payment, the estate is entitled to it.

5 What do you do with the Canada child tax benefit and/ or universal child care benefit payments? If there is a surviving spouse or common-law partner who is the parent of the child, the tax authorities should be contacted to transfer the benefits. What are your responsibilities as the legal representative? As the executor or court appointed administrator, you are responsible for 1) filing all required returns for the deceased 2) making sure all taxes are paid 3) letting the beneficiaries know if the amounts they receive from the estate are taxable and 4) obtaining a clearance certificate from the tax authorities to distribute the assets of the deceased. Where do you obtain information for filing the deceased s tax returns? You can obtain information from the prior years tax returns and notices of assessment, and from the tax slips for the year of death. You can also request information from the Canada Revenue Agency. When are the final tax returns and any balance-owing due? If the death occurred between January 1st and October 31st, you have until April 30th of the following year. If it was between November 1st and December 31st, the return is due within six months of the date of death.

6 Compliance Support How else can your Crowe MacKay advisor help you as the Executor or Administrator? preparing and filing the tax returns for any years prior to the year of death that have not yet been filed, and amending if necessary identifying opportunities to reduce the estate s tax liability preparing and filing the final personal income tax return as well as any optional returns that may be applicable, depending on the circumstances if applicable, filing estate tax returns for each year the estate continues identifying and completing all other necessary filings obtaining the tax clearance certificate from the Canada Revenue Agency

7 About Crowe MacKay Crowe MacKay LLP is a Canadian partnership with 43 partners and principals, as well as over 220 professional and support staff. Since it opened its first office in Vancouver in 1969, the firm has grown to include offices in Vancouver, Kelowna, Surrey, Whitehorse, Yellowknife, Edmonton, Regina and Calgary. We strive towards three essentials in our practice: The highest caliber of professionalism and integrity; A personal approach; and consistently providing high quality services. Our mission is to provide valued service to our clients, support our local communities and create challenging opportunities for the professional growth of our people by promoting a culture that ensures we not only state our values but live them. We are the Northern and Western Canada s accouting firm of choice by our clients, our people and the business leaders in our communities.

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