Short answer: Yes, estate planners should be familiar with tax laws as they relate to your estate. But there are nuances to this, and sometimes calling in more professionals is the best course of action. Let's break it down together.
Do estate planners know about Canadian tax laws?
When you work with an estate planner, Aggie, you want someone who knows Canadian tax laws. A good estate planner should be able to inform you about potential capital gains taxes, probate fees and other consequences related to estate transfer taxes. They should also be aware of any recent changes in tax law that may affect your decisions.
Here's the catch: some estate planners are general experts in real estate matters. They know a lot about various aspects of real estate planning, but they are not experts in any area. Think of them as the Swiss Army knives of the estate world—they're versatile, but sometimes, you need a specific tool for a specific job. This is where a lawyer can help.
When you need a lawyer and/or accountant
If your estate plan involves complex tax issues, or if you're dealing with multiple estates, international assets or a complex family structure (we all have that same uncle, right?), it's time to bring in a tax attorney and perhaps a Chartered Professional Accountant (CPA). Each professional will bring a different set of skills to the table that an estate planner may not be able to advise on.
What lawyers do with estate planning
A tax attorney can delve into the details and provide tailored advice that is consistent with current laws. If transferring a second property creates a large tax liability, a tax attorney can explore strategies to reduce the liability, such as using trusts or gifting strategies. They also ensure that your actions sound legitimate, reducing the risk of any unpleasant surprises from the Canada Revenue Agency (CRA).
What storytellers do with planning houses
A CPA or tax accountant is the go-to professional for financial information. They can provide you with in-depth analysis and advice on the economic implications of your zoning decisions. Working with a CPA is important, especially if you need accurate calculations about capital gains, income tax planning and the timing of estate transfers. They can also help with tax filing, making sure everything is reported correctly and improving your overall tax situation.
Why you might need both
Having a tax attorney and CPA involved in your estate planning ensures that your estate plan is legally sound and financially sound, giving you a comprehensive approach to estate planning.
Ideally, all three—your estate planner, attorney and accountant—should work together like a well-oiled machine. Estate planning is a team sport, and having all these professionals on your side ensures that all bases are covered. An estate planner can create a complete plan that fits your wishes, while an attorney and CPA work out the details, making sure the plan is tax-compliant and legally binding.
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