The Tax-Free Savings Account (TFSA) was introduced in the February 2008 Federal Budget and became available January 1, 2009. It is touted by the Government of Canada as 'the single most important personal savings vehicle since the introduction of the Registered Retirement Savings Plan (RRSP).'
Starting in 2011, the registered disabled savings plan (RDSP), which is open to Canadians who qualify for the disability tax credit, offers a tremendous bonus to those who are eligible.
The RDSP is a savings plan that you contribute to after-tax, with earnings and growth accumulating tax-deferred. The maximum amount that you can invest is up to $200,000. Contributions can be taken out tax-free, with the growth and other funds when withdrawn being reckoned as part of your income for tax purposes.
Estate planning is a complex topic, and there are many different facets that have to be considered. One overriding concern many people have is doing something with their assets so they reduce the amount of income tax that may be owed. This is an obvious area for expert advice. However, it is important to realize there are several other factors which have to be taken into account when organizing your estate.
According to recent news reports, seniors in Canada get bilked out of as much as $300 million every year. It is estimated that as many as one in five seniors have lost money to fraudsters and most don't report it.
Julia wants to make sure that her estate passes to her heirs with as little hassle and cost as possible when she dies. She knows she needs a will and decides to buy a do-it-yourself will kit. When she opened it, she soon discovered some serious shortcomings.
Don, 65, and Marie, 63, are about to retire. They have accumulated about $500,000 in their RRSPs and own their home, free and clear. They want to leave as much as possible to their two children. Don and Marie realize that the value of their home should pass tax-free to their children and know their RSPs will be fully taxable at that time.
