Section 10 – Estate Planning

Section 10 Introduction

Sound tax and financial planning allows individuals to accumulate and grow wealth, thereby making it possible for them to meet their spending objectives during their working and retirement years. The preservation and eventual transfer of family assets are becoming a major concern. Estate planning aims to minimize the income tax consequences of meeting these objectives.

Entrepreneurs may spend more than 80,000 hours building their businesses, but only ten hours looking after their estate plans.

Estate planning is no picnic. Juggling financial interests and family interests and, in many cases, attempting to reconcile conflicts that may occur between the two, can often produce emotions that make an initial foray into the area difficult. Once the process is underway, the taxpayer should take the necessary time to plan the entire operation in a way that makes it possible to retain control of the process and achieve objectives.

Individuals who leave property at the time of their death want their estates to be transferred in accordance with their wishes, while paying as little income tax as possible. Therefore, planning has to be done during the person’s lifetime.

Accordingly, the estate planning process should be undertaken as soon as possible in order to maximize the tax planning possibilities. The main steps in the process include:

  • Financial planning;
  • Power of attorney in the event of incapacity;
  • Will;
  • Life insurance;
  • Estate freeze;
  • Shareholders’ agreement, if any;
  • Business succession;
  • Planned charitable donations.

Tax reasons may motivate some taxpayers to consider transferring all or part of their property during their lifetime, particularly shares of private corporations, which passes on this wealth to future generations.

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