A New Budget Suggests a New Look at Your Will and Estate Plan

Finance Minister Flaherty released the 2014 Federal Budget and appears to be taking us toward a balanced budget. That’s positive news for the country, but some of the changes are worthy of note. Specifically, the taxation rates being applied to Trusts and Estates are receiving some new attention. In 2013, study of the graduated tax rates commenced, and now some changes are being recommended including the elimination of graduated tax rates for certain estates and trusts. Also, a number of related tax benefits that apply to testamentary and grandfathered inter vivos trusts will no longer be available -- for example in 2016 and subsequent taxation years such trusts will be subject to the income tax instalment rules, calendar year tax reporting, alternative minimum tax and various other measures.

On a positive note, Budget 2014 proposes to provide more flexibility in the tax treatment of charitable donations made in the context of a death that occurs after 2015. What does it mean? It means that it’s worth taking a fresh look at your will and estate plan to ensure it’s still optimally designed. We’re happy to talk it through with you. Welcome to a new budget!