Taxes (after death)

[Alvaro Sanchez]

While I build my portfolio with properties in Canada and outside Canada, I would like to structure it so that I can minimize taxes for beneficiaries. As far as I know the day I die, all properties are said to be sold at fair market value and whoever is going to keep them (state/trust/kids) they would be on the hook for the capital gain taxes. Also, for JV when one of the partners dies.


I would hate to build a large portfolio only to realize that they would have to sell half of it just to pay taxes. Does anybody have some input in this? or know someone in Ottawa who can help with this.

 

[Albertritchot]

I would like to highlight one website which lists various professionals that can tackle the problem you correctly anticipate.

It is called the Society of Trust and Estate Practitionners or www.step.ca

They will have a list of individuals with whom you can devise a strategy. Lawyers, Financial Planners, Accountants knowledgeable in estate planning will be on that list.

Until you implement a solution , may you stay in good health!

Cheers,

Albert Ritchot CGA
www.albertritchotcga.com

 

[Nir]

I think any reasonable JV agreement should allow each partner the option to buy the partner`s share in the property upon death before selling it in the market.
re: your example - assuming you can`t afford to buy his share upon death, are you sure convincing his wife not to sell is easier than convincing the tax man not to?
ha ha

 

[Thomas Beyer]

QUOTE (asanchez @ Nov 25 2009, 04:40 PM) I would hate to build a large portfolio only to realize that they would have to sell half of it just to pay taxes. ...
A few options:
a) you can buy insurance that pays out on your death and covers taxes !

b) you can create a trust

c) you can hold properties in a corporation with multiple share classes.

Many options to research that have tax, estate and cost implications !

 

[Alvaro Sanchez]

While I am aware of some of the options, what are the so called sophisticated investors doing? That is, I found a lot of useful information in to how to acquire properties and grow the portfolio, Yet I am missing the what happen after you die. The whole reason of creating wealth is so that I can pass that to my beneficiaries instead of just handling over to the taxman.

 

[LifesMoneyPeople]

QUOTE (ThomasBeyer @ Nov 26 2009, 12:05 AM) A few options:
a) you can buy insurance that pays out on your death and covers taxes !

b) you can create a trust

c) you can hold properties in a corporation with multiple share classes.

Many options to research that have tax, estate and cost implications !

I second this all are proper and great solutions. They are also listed in cheapest to most expensive(my opinion) for starting off you can buy some Key Man insurance on yourself and your JV partner if you have one. If you can get the numbers right(estate planner) and buy enough in insurance you will never have to sell one property