Chapter 6- Estate Planning

Question 1

What are the rules for spousal rollover

Answer 1

• if the land is transferred to a spouse or spousal trust the transfer can be taken place at cost, the spouse or spousal trust acquires it at cost
• the distribution has to take place within 36 months (longer if the CRA grants an extension)
• The land can be used without restriction to the spouse or spousal trust

Question 2

What are the two main purposes of a Last Will and Testament?

Answer 2

1. to identify who the testator wants as beneficiary

2. to appoint the executor

Question 3

if a taxpayers capital losses exceeds their gains in the year of death what can happen?

Answer 3

the losses can be applied against other income (not just capital gains) in the year of death and in the preceding year

Question 4

what does it mean if an enduring POA is appointed with ‘jointly and severally’?

Answer 4

either POA can act on behalf without obtaining the approval for the other attorney when making a decision

if the POA only indicated jointly then both POA’s will need to agree before making a decision

Question 5

What is an inter vivos trust?

Answer 5

• inter vivios gift occurs during the testator’s lifetime
• an inter vivios gift will result in the donor no longer having possessions or the right to use the asset
• inter vivios gift can help the testator avoid probate fees

Question 6

what is the survival clause/survivorship clause?

Answer 6

states that the beneficiary must survive the deceased by a minimum period of time (usually 30 days), to avoid probate fees if the beneficiary dies in a short period of time