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Canada doesn’t have an inheritance tax, but this doesn’t mean the house passes to the next generation completely tax-free.  In Canada, when someone dies, the Canada Revenue Agency (CRA) treats it as if they sold most of their assets at fair market value immediately before death.

In BC, there is no estate or inheritance tax. However, when someone dies, it is usually a major taxable event. This is because taxes are triggered by the deemed sale of certain assets, and probate fees also apply. With proper planning, families can often reduce these costs and preserve more of their wealth for future generations.

When assets aren’t part of your estate, they don’t have to go through the formal probate process to validate your will. They can transfer directly, which saves time and money. 

The best way to leave an inheritance to your children is to start planning early and talk with a professional. The bare minimum is to create a well-written Will.

Mike had built significant wealth. But minimizing tax wasn’t his main concern. With his son still only 16, Mike needed an estate plan that could protect the inheritance today while helping his son manage it responsibly in the future.  

After working in the field of wealth management for years, one thing became very clear to me: most Canadians know almost nothing about estate planning and how to protect themselves.

Before creating a trust, take time to think about what matters most to you. Think deeply about what you would like to have happen to your assets when you pass away. Next, create a list of your assets, including your home, vacation properties, investment accounts, and business interests. Remember to consider the complexity of your situation, such as owning multiple properties, assets in different provinces or countries, or having a blended family.

Peter is a Canadian resident, age 65, and is married to Joanne, who is 54. Peter had built significant wealth and held approximately $4 million of non-registered investments in his own name. As part of his estate planning, Peter wanted to reduce probate exposure and create a smoother plan for Joanne if he became incapacitated or passed away.

What is the cost of estate planning in BC? For most people in British Columbia, a basic estate plan usually costs between $1,000 and $3,000. If you have a more complex situation involving businesses, trusts, multiple properties, cross-border issues, or blended families, this can increase the cost significantly.

Sarah inherited what she believed was a tax-free estate worth $2 million, including a cottage and a large RRSP.  What she didn’t realize was that her parents’ estate owed a significant tax bill before anything could be distributed. The cottage triggered a large capital gain because it doubled in value over the many years her family owned it. And the RRSP was fully taxed as income.