Transfer of real estate: Nuances & Inheritance Taxes
Transfer of real estate by inheritance is often very time-consuming process for owners, as well as for potential successors. The experts of Bull Island Realty together with experienced estate analyst from Calgary decided to find out how difficult it can be to transfer your house or apartment to your inheritors and what can you do to reduce costs associated with this procedure.
In order to transfer the real estate object (home or apartment) to heirs, the person can sign a grant during the life or write a will. According to financial and law experts, the last option helps protect the rights of the owner during his lifetime. However, the transfer of the property on such terms is connected with a lot of hassle and require financial expenditure from potential successors. Let's consider all the methods of property transfer:
1. Methods of transfer during the life of the owner are the following:
- intravital trust
2. Methods of transfer after the death of the owner:
- specification of the heir for a certain property
- joint ownership
- according to the will
Before to decide on which method to choose, it is necessary to consider the section of special taxes on the transfer of the inheritance, the so-called probate fees. In recent years these fees increased greatly. These taxes must be paid in the process of transmission and distribution of the inheritance. This process takes place under the supervision of the court, which produces a special document - letters of the probate.
The increase in rates of probate fees has led to the growth of popularity of the following methods that are used to reduce this tax. Such methods are widely used in financial planning:
- Joint ownership of property
- Transmission and distribution of the property by the owner
- Grant with preservation of the right to use the property during the life
- Transfer of the inheritance in form of finance to the corporation.
One of the most popular ways to avoid paying inheritance tax in the form of probate fees is joint ownership. It is necessary to remember that in order to accelerate the receipt of an inheritance, you can specify a successor, for example, when investing in RRSP.
Mabel Davidson providing comprehensive overview of estate planner Calgary. Useful advice from experienced analyst.
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