2. Learn about giving gifts - Steps to Justice

The simplest way to reduce fees is to give property to people or organizations as a gift while you're still alive. The legal term for this is “inter vivos” gift.

If you have items like family heirlooms, jewellery, furniture, or a car that you want someone to have, you can gift it to them while you're alive. This means it does not become part of your when you die, and it is not included when calculating probate fees.

Risks to keep in mind

Making a gift usually means that you cannot get the gift back later if you change your mind.

And if you give something away during your lifetime, it's important to clearly record that it's a gift at the time of transfer. If you do not, someone could argue that the asset should return to your estate after you die, especially if they're making a claim for financial support.

Tax rules

It's important to understand the Canada Revenue Agency rules about gifting before you die. If you do not, it may lead to tax problems.

You may need to pay tax on some types of gifts, such as company shares, mutual funds, or a family cottage. If the gift is worth more than what you paid for it, you may need to pay capital gains tax.

If you gift your car to a family member, you may have to pay sales tax. But you may be able to avoid paying this tax if you both:

fill out a sworn statement, and
take it to the ServiceOntario office when transferring the ownership.

You still have to get a safety standards certificate unless the gift is to your or to your partner.

Talk to an estates lawyer

Before you give away property while you're still alive, it's a good idea to talk to an estates lawyer. They can advise you on the best way to gift your property and reduce taxes.

It's also helpful to talk with a financial advisor. They can help you figure out if you have enough money for yourself later if you make the gift now.