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On retiring from an engineering career at the age of 65, Hugh is starting to...

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Accounting

On retiring from an engineering career at the age of 65, Hugh is starting to think about his current financial situation. His wife, Karen, passed away last year and he is thinking about his estate plan. Hugh has a son named Jim and he is 30 years old. Hugh has the following assets: RRIF valued at $862,000 (Beneficiary: Jim); ACB $562,000 Principal residence valued at $1,250,000 (Joint with Karen); ACB $600,000 Whole life insurance policy with a face value of $200,000 (Beneficiary: Karen) TFSA valued at $38,000 (Beneficiary: Karen); ACB of $30,000 Cottage valued at $250,000 (Joint with Jim); ACB of $125,000

1. Calculate the probate fees that will need to be paid in the event that Hugh passes away?

2. Calculate the taxes that Hughs estate would need to pay in the event of his passing? Assume a marginal tax rate of 53%.

3. What three recommendations would you give to Hugh to minimize taxes and probate at death? Explain the benefits and drawbacks of each.

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