Bob Gauvreau explains what happens to your assets when you die. Your property is deemed sold at fair market value, RSPs trigger immediate tax bills, and cottages or investment properties get taxed on the gain. Spouses can defer the tax hit, but it comes due eventually.
When you're planning your estate. And we all should be focusing on this because we know there's two things guaranteed in life, death and taxes. When death happens, taxes also happen. A couple of things that you need to consider when you are planning your estate. What are your assets going to be like when you die? All of your assets are deemed to be sold at fair market value. If you're married, all of your assets transfer over to your spouse tax free. But when your spouse dies, all of those assets are deemed to be sold. One of the areas that people get hit with a lot of tax on is on their RSPs. If people have been accumulating them and essentially investing in RSPs for years, they pass away. Those or the value of those RSPs all come into tax or taxable on the date of death. Another circumstance that you have to be aware of is any property that's not your principal residence, such as a cottage or an investment property. All of those are deemed to be sold the day you die. Even if you didn't get paid for them and you still own them or your estate owns them, they're deemed to be sold.
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