National Bank
May 6th, 2025
There can be benefits to gifting part of your estate during your lifetime (inter vivos), an increasingly popular wealth transfer option for Canadians. Before settling on this option, here’s what you’ll need to consider.
When a person dies, the succession – a process and a set of rules – governs how their property is transferred, whether they have a will or not. The receivers of assets are the beneficiaries of what is known as traditional inheritance. If a person dies without leaving a will, what happens to their estate depends on the province or territory in which they lived.
There are several potential benefits to gifting assets during your lifetime, including:
- Supporting your loved ones: A gift could help your grandchildren pay for university or your children buy their first home.
- Seeing the impact of your gift: Gifting while living allows you to share in your family’s joy. If you’re gifting a sum of money to help a loved one achieve one of their dreams, like taking a trip or buying a property abroad, you get to celebrate with them. You might also want to pass on cherished possessions, such as art or jewellery, so your family can start enjoying them immediately.
- Simplifying estate administration for your heirs: Not everyone has the skills or the desire to manage major assets. Selling a property before you die and giving the proceeds directly to your loved ones means they won’t be tasked with taking on your rental property.
- Ensuring your wishes are respected: Making a gift during your lifetime can offer peace of mind that your assets are being dispatched to the person you intended.
- Positive tax implications: In addition to having a positive impact on others, donations to charity may entitle you to a tax credit for charitable donations at the provincial or territorial levels and the federal levels.
When a person decides to transfer an asset as a gift during their lifetime, the ownership of the property is transferred to the recipient without any payment. However, there are specific rules for these gifts, so it’s advisable to consult a tax professional to ensure proper completion of the transaction.
You can give as much as you want; there’s no law restricting gifts made during your lifetime to your heirs. However, it’s important to carefully consider whether gifting while living will be truly beneficial to you. Don’t hesitate to speak with your financial advisor to determine whether this option is the right one for you. Keep in mind that the tax consequences may vary depending on what you want to give.
