- Are there funds available?
- What’s given up by you or your children to pay the taxes?
- Typically, the best estate assets are sold first to minimize liquidation losses.
Unfortunately to preserve as much of your estate as possible, liquidation may force you to sell your most prized assets to protect the rest. Only they will command the highest price when cash is needed fast.
If the intent is to keep the cottage in the family, does the will give explicit instructions as to which assets are to be sold to pay tax liabilities?
- Would credit be readily available?
- Would the borrowers have adequate cash flow to repay the loan with interest?
- What would the non-deductible interest rates be?
- Would your estate or your children be able to provide the necessary security to the government?
- Would your estate or your heirs have adequate cash flow to repay the amount owing with interest?
- What would the interest rates be?
- Income tax liabilities arise on death and life insurance creates immediate, tax-free cash to provide a solution.
- Joint second death protection provides a very economical way to provide cash to your estate when the second spouse passes.
- It can be custom designed to handle your needs and values.
- Consider having your children own it and pay for it. After all, they benefit from keeping the property.
- The policy can be set up to mature or be paid out when both parents have passed away.
You may be pleasantly surprised at your ability to qualify for coverage. This alternative pays off any capital gains and associated costs of keeping the family cottage and property in the family. It can help equalize inheritances if the vacation property is not shared amongst siblings.
The information contained in this article is for general guidance and information only. As such, before making any decision or taking any action, you should consult appropriate professional accounting, tax, legal or other competent advisers.