Estate and Inheritance Tax Minimization 2025 — Preserve Family Wealth and Reduce Tax

Estate planning is not only about passing assets—it’s about preserving value. In 2025, CRA audits on deemed dispositions, family trusts, and life insurance structures are stricter than ever. Without coordinated planning, your estate may face unnecessary taxes that reduce inheritance for your heirs. Mackisen CPA Auditors Montreal designs estate and inheritance tax plans combining trusts, rollovers, and post-mortem reorganizations to protect wealth across generations.

Legal and Regulatory Framework

Income Tax Act (Canada) Section 70(5): Deems capital property sold at fair market value on death, creating capital gains tax.
Section 73(1): Allows tax-deferred transfers to a spouse or family trust.
Section 110.6(2.1): Provides LCGE up to $1,016,836 on QSBC shares.
Section 84.1: Controls related-party share transfers under Bill C-208 for legitimate family transitions.
Section 107(2): Permits tax-deferred property rollouts from trusts to beneficiaries.
Section 164(6): Enables post-mortem loss carrybacks to eliminate double taxation.
Taxation Act (Quebec): Requires separate estate and trust filings with Revenu Québec; Mackisen coordinates both.

Key Court Decisions

Halliwell Estate v. The Queen (2019): Confirmed post-mortem reorganization as a valid tool to avoid double tax.
Neuman v. The Queen (1998): Reinforced dividend and trust distribution compliance requirements.
Poulin v. The Queen (2016): Accepted trust-held LCGE claims when valuation documentation was accurate.
Grosso v. The Queen (2014): Highlighted active-business asset rules for LCGE in estate contexts.

Why CRA Targets Estates

CRA monitors estate returns for underreported capital gains, unfiled trust returns, and unclaimed rollovers. Missing valuations or dividend reclassifications often trigger reassessment. Mackisen prevents these by implementing complete estate valuations, spousal rollover documentation, and coordinated CRA filings.

Mackisen’s Strategy

1. Estate Freeze — Fix current share value and shift growth to family or trust to reduce tax exposure.

2. Spousal Rollover — Transfer property tax-deferred to spouse under Section 73(1).

3. Post-Mortem Reorganization — Apply Section 164(6) loss carrybacks to offset gains and prevent double tax.

4. LCGE Optimization — Use family LCGE across qualified business shares.

5. Insurance Planning — Fund estate tax liabilities through life insurance and CDA distributions.

6. Trust Rollouts — Execute Section 107(2) rollouts to transfer property to heirs tax-free.

7. Quebec Compliance — Align provincial and federal filings for full estate tax deferral recognition.

Real Client Experience

A Montreal business owner’s estate faced $1.2 million in taxes. Mackisen’s Section 164(6) post-mortem plan reduced the bill by 60 percent. A Quebec family transferred real estate to a trust through Section 73(1) rollover, deferring $950,000 in capital gains and protecting ownership.

Common Questions

Is there inheritance tax in Canada? No, but capital gains apply on death.
Can I defer taxes for my spouse? Yes, using spousal rollovers.
What is the best way to avoid double tax? Implement estate freezes and post-mortem reorganization.
Should I create a trust? Trusts are ideal for asset protection and controlled inheritance.

Why Mackisen

Mackisen CPA Auditors Montreal are Canada’s experts in estate, trust, and inheritance tax planning. Our team integrates tax, legal, and valuation expertise to preserve family wealth and protect your estate from over-taxation. Call Mackisen CPA Auditors Montreal today for your 2025 Estate and Inheritance Consultation. The first meeting is free and designed to secure your family’s financial future.