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Estate Tax Planning

Estate planning gives you and your family assurance about the future. For business owners, this process must include business succession planning to ensure your business survives the transition to new ownership.

Recognizing that our clients may have other advisors who help them with estate planning, we do not include it in our service packages. Estate planning is available to our clients for an additional fee.

We suggest that all our clients have us review existing estate plans from a tax perspective. Our team includes tax experts who also have the Trust and Estate Practitioners (TEP) designation from the Society of Trust and Estate Practitioners (STEP) and who have in-depth knowledge of Canada’s Income Tax Act and the U.S. Internal Revenue Code, allowing us to determine whether there are changes you can make to your plans that will benefit you or your family financially.

Our Estate Planning Process

An effective estate plan allows for the orderly transfer of assets to your beneficiaries, provides security for your surviving family, and can reduce or eliminate the tax that would otherwise be triggered on the transfer of your business and other assets. We work with insurance brokers, investment planners, and lawyers to develop a clear and comprehensive estate plan.

Our estate planning process allows us to tailor each estate plan to the client’s unique circumstances. The steps are as follows:

  1. Assess Your Assets and Debts: We’ll summarize all of your assets and liabilities, including real estate, investments, bank accounts, retirement accounts, life insurance policies, and personal belongings. 

  2. Understand Your Goals: What, specifically, do you want to achieve with your estate? This could include providing for your family, minimizing taxes, supporting charitable causes, or ensuring the smooth transfer of your assets to your beneficiaries.

  3. Review Legal Documents: Gather and understand all of your legal documents and contracts relating to your estate, such as Wills, Powers of Attorney.  A will is a legal document that outlines how you want your assets to be distributed after your death. It also allows you to name guardians for your minor children and specify other wishes, such as funeral arrangements.

  4. Consider Trusts and Estate Freezes: Depending on your goals and the complexity of your estate, you may want to set up trusts to manage and distribute your assets. Trusts can offer benefits such as avoiding probate, providing for minor children, or protecting assets from creditors. You may also want to freeze the value of your corporate holdings in favor of a Trust or other beneficiaries.

  5. Designate Beneficiaries: Review and update the beneficiary designations on your retirement accounts, life insurance policies, and other accounts to ensure they align with your estate plan.

  6. Plan for Incapacity: Create documents like a power of attorney and a personal directive proxy to appoint someone to make financial and medical decisions on your behalf if you become incapacitated.

  7. Review and Update Regularly: Estate planning is not a one-time event. We’ll need to review your plan regularly, especially after major life events like marriage, divorce, births, deaths, or significant changes in your financial situation such as purchases and sales of a business.

  8. Consult with Professionals: Consider seeking advice from professionals like estate planning lawyers, and financial planners, to ensure your plan is comprehensive and legally sound.

  9. Communicate Your Plan: It’s important to communicate your estate plan with your family members and any relevant parties so that your wishes are known and can be carried out effectively.

  10. Execute Your Plan: Once your estate plan is in place, make sure all necessary documents are properly executed and stored in a safe place where they can be easily accessed when needed.

Estate Freezes

An estate freeze is a tax planning strategy used to lock in the current value of an individual’s assets for estate tax purposes while transferring future appreciation to other family members or entities, such as a trust or a corporation. By “freezing” the value of the estate, the individual can minimize the potential tax burden on their estate when they pass away, allowing them to pass on more of their wealth to their heirs.

Estate freezes are typically applicable for individuals who have significant assets and want to minimize the tax implications of transferring their wealth to the next generation. It can be particularly useful for business owners who want to transition ownership of their business to family members or successors while minimizing the tax impact.

As a tax accountant specializing in estate freezes, we help our clients decide if this strategy is right for them by conducting a thorough analysis of their financial situation, including their assets, income, and potential future growth. We consider their long-term goals, family dynamics, and the tax implications of various scenarios to determine if an estate freeze aligns with their objectives.

We guide our clients through the estate freeze process by first educating them about the strategy and its potential benefits and risks. We then work closely with them to develop a customized plan that addresses their specific needs and goals. Our team at Achen handles all the technical aspects of the estate freeze, including the valuation of assets, structuring the freeze using trusts or corporate entities, and ensuring compliance with tax laws and regulations. However, the client will need to actively participate in the process by providing us with accurate financial information, making key decisions about their estate plan, and communicating with their family members about the proposed strategy. We collaborate closely with our clients every step of the way to ensure they understand the process and feel confident in their estate planning decisions.

Family Trusts

Family trusts are legal arrangements where assets are held by a trustee for the benefit of beneficiaries, often family members. The trustee manages the assets according to the terms of the trust deed, which specifies how the assets should be distributed and managed. Family trusts can be used for various purposes, such as protecting assets, providing for family members, and minimizing taxes.

Family trusts are typically applicable to individuals or families who want to protect and manage their assets for the benefit of future generations. They can be particularly useful for high-net-worth individuals who want to pass on their wealth while maintaining control over how it is managed and distributed. Family trusts can also be used to protect assets from creditors and provide for family members with specific needs, such as minor children or individuals with disabilities.

As a tax accountant specializing in family trusts, we help our clients decide if this structure is right for them by conducting a comprehensive analysis of their financial situation, family dynamics, and long-term goals. We consider factors such as the size of their estate, their desired level of control over their assets, and the potential tax implications of using a family trust. We also discuss alternative strategies and their implications to ensure our clients make informed decisions.

We guide our clients through the process of establishing and managing a family trust by first helping them understand the benefits and limitations of this structure. Our team at Achen handles all the technical aspects of setting up the trust, including drafting the trust deed, selecting appropriate trustees, and transferring assets into the trust. We also provide ongoing support and advice to ensure the trust is managed in accordance with its terms and remains compliant with relevant laws and regulations. However, the client will need to actively participate in the process by providing us with accurate financial information, making key decisions about the trust’s terms, and communicating with the trustees and beneficiaries. We work closely with our clients to ensure they understand their roles and responsibilities as trust settlors and beneficiaries and are comfortable with the structure and management of their family trust.

A team with experience in the unique

At Achen Henderson CPAs, our team has extensive experience working with a diverse range of businesses and individuals. We have a deep understanding of the unique challenges and opportunities that each client faces. We recognize that estate planning is a highly personalized process, and our team are experts at tailoring our services to accommodate the specific needs and goals of each client. Whether our clients have complex family dynamics, intricate business structures, or unique asset portfolios, we have the expertise to navigate their situations effectively. Our commitment to delivering customized solutions ensures that our clients receive comprehensive estate planning strategies that are specifically designed to address their distinct circumstances, providing them with peace of mind and confidence in their financial futures.