Adam is 65 years old and is reviewing his estate plan because he had a friend of his pass away recently and his estate had to pay a lot of money in taxes. He wants to ensure that if something happens to him that he has his estate structured to minimize the taxes. He and his wife, Rebecca, have the following assets:

Asset	Ownership	Fair Market Value	Book Value	Beneficiary Designation
Home	Joint tenancy	$750,000	$350,000
Non-Registered Stock Portfolio	Adam	$200,000	$160,000
RRSP	Adam	$620,000	$420,000	Rebecca
RRSP	Rebecca	$360,000	$220,000	Adam
Whole life Policy (Insured = Adam)	Adam	$550,000		None
TFSA	Adam	$80,000	$60,000
Cottage	Adam	$330,000	$200,000

Rebecca is the beneficiary of Adam's estate for all assets other than the cottage. Adam wants to leave the cottage to his son Hayden as he loves spending time there. Rebecca opts to maximize all rollover opportunities. Assume that Adam's tax rate is 30% in the year of death.

1. If Adam were to die today, what would his estate have to pay in Estate Administration Tax?
2. If Adam were to die today, what would his estate have to pay in taxes? Explain?
3. What two recommendations would you give to Adam to reduce EAT and taxes on his Estate? What are the benefits and drawbacks of each recommendation?

Answer rating: 100% (QA)

Answer Adams Estate Taxes 1 Estate Administration Tax EAT In Canada there is no federal Estate Administration Tax Some provinces have probate fees but these are typically based on the gross value of t... View the full answer