Reference no: EM133306367
Lisa's Aunt Marge and Uncle Homer both age 68 have come to you for some estate planning advice. Homer has recently been diagnosed which an illness that has prompted them to review their estate. Currently neither of Marge nor Homer have a will. Their assets are considerable as they had no children. They have a beautiful home worth $1.8 million dollars with no mortgage held as joints tenants with rights of survivorship. Uncle Homer has (FMV) $820,000 (ACB) $575,000 in RRSPs naming Aunt Marge as the beneficiary. His personal non-registered portfolio is worth $1.7 with an ACB of $625,000. In addition, Marge and Homer have $845,000 in joint investments ACB of $425,000. Homer's TFSA account is worth $118,000 with Aunt Marge named as the beneficiary. Uncle Homer also owns an equal share of a rental property with his niece Lisa, registered as "tenants-in-common", worth $825,000, with a mortgage of $450,000, the ACB for the property is $390,000. Uncle Homer also has a life Insurance policy worth $650,000 with his estate as beneficiary to cover any outstanding expenses. Lisa is Marge and Homer's favourite niece, always there for them and they would like to ensure Lisa inherits their estate. Their other niece's and nephew's only come around when they need funds.
Assume today is January 2, 2022
1. Explain to Aunt Marge and Uncle Homer which assets of are exposed to probate taxes and which assets are not if he were to die today- and why - showing specific dollar amounts.
2. Calculate the amount of probate taxes Homer's estate would pay.
3. Give Aunt Marge and Uncle Homer 4 estate planning strategies that could help reduce the probate costs if possible if Uncle Homer was to die.
4. Explain to Aunt Marge and Uncle Harry what it means to die without a will and what would happen to their estate they if they both died without a will.
5. Explain to Aunt Marge that if Uncle Homer passes, what estate planning opportunities she can utilize to ensure Lisa receives the remaining estate when Aunt Marge passes away, considering both Probate and Income Tax considerations.