How does an executor pay estate expenses during the probate process? + MORE May 4th

Retirement planning getting you down? There are always smart ways to plan the financial aspects of your retirement.
Latest News

Can a non-resident open an investment account in Canada? Sep 21st

I moved to Sweden to study in 2021 and I am no longer considered a resident of Canada (to my understanding). However, I have some money to invest. I am not allowed to contribute to my TFSA which leaves me with contributing to an RRSP or an ISK (Swedish tax efficient account). In short, you pay ~0.40.... More »

Watch: 4 things to consider before putting your money in a TFSA or RRSP Sep 28th

You know both can help lower how much income tax you pay—both are registered accounts, after all—but how do you decide whether to put your money into a tax-free savings account (TFSA) or a registered retirement savings plan (RRSP)? Watch this video to learn about the four things to consider befo.... More »

TFSA contribution room calculator + MORE Jan 11th

Find out your current tax-free savings account (TFSA) contribution limit by using this calculator. TFSA is a bit of a misnomer. While you can use it for straightforward savings, think of it more accurately as an investment holding account to store things like exchange-traded funds .... More »
 freedom 55

Best high-interest savings accounts in Canada 2022 + MORE Oct 5th

Generally, savings accounts offer very low interest rates. So, if you want to earn on your deposits (rather than simply using your account as a temporary “holding tank” or directing to longer-term saving and investing vehicles), a savings account with a high interest is a no-brainer. Howe.... More »
retirement

Planning to cash in on your home to help fund retirement? Here’s how to do it right + MORE Dec 14th

Elizabeth and Charles have a home worth about $1.3 million. They’re considering selling and downsizing to a smaller unit to bulk up retirement savings. We ask experts for advice on the right move..... More »
I’ve realized that my large RRSP would generate a very large income tax bill if I die in the near future. I don’t have a spouse, or anyone who qualifies as a beneficiary to my RRSP on a tax-deferred basis. How can my executor pay my income taxes if it takes a year to get probated?—Carol 

Probate and the impacts on estate expenses

Thank you for your question, Carol. This is something I’ve seen many executors face when administering an estate. Let’s start with reviewing what probate is, what the process looks like, and the effects on the estate’s cash flow for paying taxes or other estate expenses, which can include taxes on income from registered retirement savings plans (RRSPs).

What is probate?

Probate is a term that most of us have heard before; however, the official name in Ontario is Certificate of Appointment of Estate Trustee with (or without) a will. How’s that for a tongue twister? 

Since the terminology eats up most of my word count for this article (joking of course), I will continue to reference it as probate…

Continue Reading On moneysense.ca »

Share

PinIt
Compare insurance quotes through Kanetix.ca - save time and money!