How can a person reduce the amount of income tax paid by their estate? The simplest solution is to leave taxable assets to your spouse to take advantage of the tax-free rollover, but there are other solutions that a Financial Advisor can help you with. A person’s final tax return is filed by the executor of their estate and is very special. It assumes that every asset owned by the deceased, including investments such as RRSPs, RRIFs, and LIRAs, is sold for fair market value, even if those assets are bequeathed to family or friends, not physically sold. This is called a “deemed disposition” and it can trigger a substantial amount of taxes. These amounts add up quickly and, with a top income tax bracket of 46.40% in Manitoba, can deplete a significant portion of your estate. Estate planning ahead of time will help keep your family secure for generations.

Thomas Johnson, Cascade Financial Group
ThomasJohnsonMB@outlook.com