Giving small gifts in Wills can drive up an estate’s probate costs. Before you bequeath $500 here and there, consider making cash gifts during life. Your inter vivos (among the living) gift can make a real difference — and reduce your estate administration taxes due after death.
Probating an estate can be a lengthy and cumbersome task for executors. Instead of burdening cash-strapped beneficiaries with waiting for your estate to be distributed, you could make a gift right now. Your estate trustee will thank you, and so may loved ones who will know you are thinking of them.
Axess Law’s Wills (Ontario) lawyers make writing new Wills affordable when you plan to give gifts of cash, before or after you pass on.
What is a Cash Gift?
Cash gifts made during life or bequests in your Will are voluntary transfers to your kin or others. Unlike cash you request back, such as if you think you are dying but recover (called donatio mortis causa gifts), they are permanent. Whether you gift cash while you’re alive or in your Will, it must be freely given, with no strings or contracts attached.
What Are Specific Gifts?
You leave “specific gifts” in Wills when you have a specific beneficiary in mind. For instance, you could bequeath cash to a niece, charity, registered nonprofit or college you attended. Cars, jewellery, a business or proceeds of bank accounts can all be left as specific, testamentary gifts in Wills.
Estate tip: Link cash gifts in Wills to the consumer price index (CPI) to ensure they retain their value. They go up when inflation, or the cost of goods and services, does.
Limits on Cash Gifts
Pensions, RRSPs, life insurance policies and trust funds are excluded from cash gifts. So is jointly owned property subject to a right of survivorship application, such as joint bank accounts with legally married spouses. Matrimonial homes are usually spousal property, even if your spouse is not on the title to a property but you are legally married.
Exceptions to the rule – When Your Matrimonial Home is a Gift.
Giving Gifts Inter Vivos
You can enjoy bestowing assets on beneficiaries when you give inter vivos (during life) gifts. You can gift family, friends or charity any amount of cash you want, but gifts must be:
- intentional, because you planned to make it
- irrevocable, with no return expected
- delivered during your lifetime
- and accepted by the recipient.
For example, a cheque must be delivered, accepted and and clear your bank account. If any part falls through, the cash becomes part of your estate, to be shared by all your beneficiaries.
Income Tax on Gifts
Gifting money reduces your income in future years, although you pay tax in the year you give a gift unless it goes to a registered charity. (Canada has no gift tax, so your beneficiaries are not taxed.) You or your estate pay income tax on your total income, including cash bequests.
Keep receipts for inter vivos gifts or gifts in Wills to charity with estate documents, so your executor can deduct them from your final income tax return. Your executor will file the return after your death.
Ask a Probate Lawyer
If you’ve been named executor and aren’t sure how to value cash gifts, ask an Axess Law probate lawyer. We explain how to bypass probate in Ontario when assets have specific, named beneficiaries and when estate administration tax is due.
Why You Need a Lawyer
Hiring an Axess Law lawyer for Wills ensures your final bequests satisfy legal standards in Ontario. Your handwritten last Will and testament may be overturned if it is found invalid by an Ontario probate court.
Do you need a lawyer to draft your Will? It can’t hurt.
Axess Law witnesses and signs your Will in front of you and advises you on storing it securely. You can make multiple Wills in Ontario and gift any beneficiary of your choice, as long as you ensure financially dependant kin are cared for. Our Wills and estates lawyers review your Will to prevent unclear language that could cause problems for your estate.
Marriage, separation or divorce can complicate your estate affairs. Axess Law’s Ontario lawyers write new Wills, instead of making amendments or codicils that may confuse estate trustees after you are gone.
Affordable Flat Fee Legal Services
We make getting legal services easy.
Axess Law ‘s low flat fee legal services are affordable for any budget. We meet with you by secure, remote video conferencing anywhere in Ontario. You can drop into Ottawa or Greater Toronto Area Axess Law offices to meet in person by making appointments online or by phone.
You pay $199.99 and up plus HST for basic Wills or $149.99 plus HST each for spouses or partners who make mirror or individual Wills at the same time. Add power of attorney for property (finances) and personal care at the same time. Our fees start at $249.99 plus HST total for individual virtual wills and two power of attorney appointments ($299.99 plus HST in person).
Make a POA for property (finances).
Make a POA for personal care.
Book Appointments Online or By Phone
Call Axess Law’s Wills and estate lawyers (Toronto, Greater Toronto Area or Ottawa) to make a new or second Will or when personal or financial changes affect your estate. Making online appointments is fast and easy.
Book virtual video calls anywhere in Ontario or make in person appointments at any of our Axess Law locations. Call our 1-647-479-0118 lawyer line to find a Wills lawyer near you. Toll free calls accepted at 877-402-4277.
We have onsite parking and transit access nearby.