Author Topic: Inheritance  (Read 1601 times)

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Offline waldo

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Re: Inheritance
« Reply #45 on: February 11, 2019, 12:35:33 pm »
waldo keepin' related info in one post:

living large waldo says: no, inherited money is not taxed in Canada. But... an estate (hence estate beneficiaries) is responsible for paying any outstanding taxes owed by the estate.

unless a deceased has made direct provision (say within a will, for example), the executor will pay any outstanding taxes owed from estate funds... from the funds available for disbursement to estate beneficiaries. Additionally, taxes owed may extend beyond the deceased's final living year (and subsequent years until an estate is settled); accordingly, an executor should seek a 'Clearance Certificate' from CRA... an undertaking that has CRA, at its discretion, review past tax filings of the deceased to ensure no outstanding taxes are owed to the government. If estate disbursements to beneficiaries have been made (if the estate has been settled) prior to an executor obtaining that CRA clearance certificate, the executor is personally responsible for paying the government any outstanding past years monies owed to CRA/the government.


Also, if part of the inheritance is an RRSP, it's not transferred to the beneficiary. It's withdrawn and the deceased pays taxes on it before it goes to the beneficiary. You also need to claim it on your income tax at the end of the year. Now whether there's a direct tax on the inheritance or what, I'm not entirely sure yet, but the government does withhold a portion of it.

an RRSP/RIF is divested... to the estate; withholding tax is performed by the managing financial institution. In relation to subsequent disbursement of divested estate assets, estate beneficiaries are not subject to (further) taxation on monies initially sourced from the deceased RRSP/RIF accounts.

Say someone is on disability and they inherit $100,000. It counts as income and if they receive a lump sum, their disability benefit will be stopped until they exhaust the inheritance.

It counts as income.

your province may vary: In regards inheritance possibly impacting upon 'Income Support' within Ontario's Disability Support Program

Offline cybercoma

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Re: Inheritance
« Reply #46 on: February 11, 2019, 02:05:19 pm »
Yes. That is all correct. Ontario Disability will treat your inheritance as income, unless it's put into trust.

Offline waldo

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Re: Inheritance
« Reply #47 on: February 12, 2019, 11:42:15 am »
Yes. That is all correct. Ontario Disability will treat your inheritance as income, unless it's put into trust.

limitations on trust handling: inheritance monies must be placed in a trust within six months of receiving it - up to $100,000 of the created trust may be exempt as an asset

per the prior (waldo supplied) link there are also alternatives to a trust; alternatives to use inherited money towards assets that do not affect eligibility for Disability Income Support, such as:

    - investing in a Registered Education Savings Plan (RESP) for your children
    - investing in a Registered Disability Savings Plan (RDSP),
    - using it to buy a disability-related item that has been approved in advance, or
    - buying a home to live in.

Offline Queefer Sutherland

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Re: Inheritance
« Reply #48 on: February 12, 2019, 05:13:12 pm »
Except this always ends up happening no matter what the system: communism, theocracy, fascism, whatever: you always see the government influenced by a relatively small group of elites. The problem that needs to be addressed is social mobility because with social mobility you can have fairness with a system that can never ensure equality.

You will never have 100% equality in regards to political influence even in a healthy democracy.  There will always be elites and government officials who have connected friends.  But a system can certainly vary in its political equality.  The UK under the current system is much more equal than the monarchy as it existed 600 years ago.

And yes I agree social mobility is important.  The wealthy also shouldn't be able to buy a huge amount of influence, at least not directly.  You can't prevent a media baron from owning a news channel and pumping out the propoganda.
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