In recent decades, the number of Canadians entering a second marriage has been on the rise, creating more and more blended families. And when it comes to tax and estate planning for a blended family, Advisors need to give it special attention. Indeed, the needs and desires of people living in blended unions are different from those in a more “traditional” family unit.
You may not be able to control the economy but you can control the amount of income taxes you pay.
The growth of wealth in your lifetime will occur naturally if you do some of the right things. But the capital you accumulate — your savings — can fall victim to the eroding effects of inflation and economic uncertainty if you aren’t careful. Fortunately, under our system of self-assessment, it is your legal right to arrange your affairs within the framework of the law to pay the least possible taxes. So, to secure your own future and that of your heirs, be tax-efficient and protect earnings and savings.
There are two very good reasons to start your yearend tax planning now:
- If you pay your taxes in quarterly instalments, you need to review income earned in the current tax year so as not to overpay your December remittance.
- By planning ahead, you can reduce taxes payable for 2012 — by giving to charity before yearend, for example, or by freeing up funds to make an RRSP contribution or digging for receipts so you can claim all the write-offs for which you qualify.
Losing a loved one is tough. You think all you have to do is get through the funeral, then you will have the time you need to come to terms with your loss. But if you are the executor, nothing could be further from the truth. It is only the beginning.
Claim the capital gains reserve on the sale of property.
If you do not receive all of your sales proceeds in the year title of the property is passed, you are able to defer taxation on some of the proceeds over a maximum five-year period.