Insuring your Estate

Jon Glougie

December 5, 2019

It’s never a pleasant topic, but how many of us have taken a long and serious look at our estate plans? Do you know where your assets will go after you’ve passed away? A Will can help determine this. What a Will won’t help with, is protecting your estate from tax. Do you know what your estate tax bill is going to look like? You may have estate taxes that you didn’t even know about. For example, your RRSP/RRIF accounts typically have a named beneficiary, and therefore they are not subject to probate. They are, however, taxed as income in the year that you pass away, and although the full amount of the RRSP/RRIF will be transferred to the beneficiary, your estate will still be required to settle the tax bill. You may also have a non-registered portfolio that you want to leave to a beneficiary(ies) identified in your will. Although only the growth on these investments will have estate taxes applied to them, the entire portfolio will form part of your estate (no named beneficiary) and thus be subject to probate tax. Life insurance can help you preserve your estate by paying for your estate’s tax bills, which will, in turn, leave your estate fully intact for your beneficiary(ies). You can also move assets from a non-registered portfolio into a permanent life insurance product, which can make the transition of these assets to your beneficiary(ies) at the time of your passing tax-free if done through a life insurance policy. If you want to know more about your estate, and how much tax your estate may owe, please let us know and we would be happy to help.