How to Minimize Taxes with Estate Planning

What should have taken a few weeks to sort out took nearly a year.

A family friend passed away with a beautiful legacy—savings, a cabin, investments. But probate delays, unclear paperwork, and taxes turned grief into a nightmare for her kids.

That’s exactly what we’re avoiding today.

You don’t need complicated legal maneuvers or fancy trusts to minimize taxes with estate planner guidance. Most people just want things simple for their loved ones.

My husband said it perfectly: “I don’t want to pay more tax than I have to, and honestly, I just want it to be simple.”

Simple wins.

I’m sharing five straightforward strategies that help your family minimize taxes with estate planning and avoid delays when you’re gone.

Ready to keep things simple? Listen to the full episode for all five strategies here ↓

Show Notes: How to Minimize Taxes with Estate Planning

Hey there. We had a family friend who passed away with a beautiful legacy—savings, a family cabin, a few investments—but what should have taken a few weeks to sort out took nearly a year. Why? Well, there were probate delays, paperwork, unclear instructions, and yes, taxes. So the worst part was watching them try and grieve. Her kids were grieving and trying to untangle money and stuff they didn’t understand.

That’s what we’re avoiding today, and so that’s what sparked today’s conversation a little bit. Let’s talk about how to keep things simple for the people you love. This isn’t about hiding money or coming up with some complicated maneuver. It’s about doing the homework or paperwork now so your family doesn’t get stuck in the mess later.

I’m gonna share today five ways you can help your loved ones pay less tax and avoid delays when you’re gone. It’s sort of like a checklist to go through. So pause here for a second. Before I begin, I’m gonna ask you: why would we even want to think about probate fees or estate planning? Why does any of this matter right now?

I asked my husband this exact question while prepping for today’s episode, and his answer, word for word: “Because I don’t want to pay more tax than I have to, and honestly, I just want it to be simple.” Okay. Simple. That stuck with me. That was exactly—I’m on the right track here.

So we don’t need to turn this into a big legal puzzle. Most people just want to know things will be taken care of without making life harder for the people they leave behind.

So let me ask you: what’s your reason? Maybe you’ve worked hard to build some savings or paid off your home, and you just want to make sure your family doesn’t lose a big chunk of it to unnecessary fees. Maybe you’ve seen a loved one go through a messy estate situation and thought, “I don’t want that for my kids.” I think we all have a story—we all have where, it’s a small world, but we’ve heard of a mess, or we know somebody that has been left a huge mess, and it’s been heart-wrenching in trying to grieve and take care of it.

Or maybe you just want your legacy to feel organized and thoughtful, not confusing. I am, by the nature of what I do for a living, a little bit of a control freak. And I just want to know so that I feel good that this is done properly.

Whatever your reason is, it’s valid. And thinking about it now gives you more control, more peace of mind, and often, yes, less tax.

So as I go through today the five ways to reduce your tax today, keep your “why” in the back of your mind. It’s sort of that light at the end of the tunnel of why you’re doing all this kind of organizing or thinking about. Because let’s be honest, this isn’t something we come home at the end of the day and think like, “Geez, I should really think about my estate planning.”

I know it’s not easy to do this, and so that’s why knowing your “why” in the back of your mind will keep you working on it, little step by step. It isn’t about being perfect; it’s about making small, smart choices that help the people you care about.
Five Simple Ways to Make It Easier

First one: Put names on things. This is the easiest one. If you have a spouse, name them successor holder on your tax-free savings account. If you have registered investments, name your spouse as the beneficiary. That means the money goes straight to them—no middleman, no probate. It’s called a spousal rollover.

Same with life insurance. If you name someone, it doesn’t have to go through your will. It’s faster, and there’s no probate tax.

Check your pension. We have—where I live in a city where our provincial employees is huge—we have lots of provincial workers. And every once in a while when I go through and I’m doing their plan and we’ve met for the first or second time, and I take a look at their statement of their pension, they have the wrong person on their pension. I’ve seen a 40-year-old married person have their parents still on as beneficiary of their pension from when they very first started at the job, and they’d been married, and they just forgot to go in and check and change the beneficiary to their spouse.

Super simple, super easy. If you have a spouse, put each other on—the other.

Okay, so on the flip side, I’ve seen where there is an ex-spouse still named. So you can see that this is where having that accountability of working with someone—a financial planner, a CFP—is that they’re constantly, this is part of their checklist all the time. When you meet, you might meet quarterly, you might meet annually—so I mean, it doesn’t matter, but it’s part of the checking. Is your ex still on something? That’s something to check. We don’t want that.

Second piece: this one’s a little bit harder, but I’m just on a very general level—is you can have shared ownership on things. And I say that with caution. So you can hold things like your house or your bank account in joint names, and this should be with your spouse. So having bank accounts joint with your spouse is a great thing. That means if one of you passes away, the other automatically becomes the owner. No delays, no probate, and I’ll talk about later, in a few minutes here, what probate is, but you won’t have any of these extra complications.

And so joint name with your spouse is important, and the other one is joint with your spouse on the house title as well.

So shared ownership, though, is a strategy that I get—we get asked often about. What if you want to put your children on there in joint names of a house with your children, joint names at a bank account with children?

So here’s the thing: don’t just automatically add your kids to everything. It might cause tax issues or even fights. Always get advice first. This is a sit-down, individual, case-by-case going through every scenario before you do that.

But on a very basic level, I’ve seen where spouses are not on joint bank accounts, and I’ve seen where a spouse has passed away and that bank account has not been accessible to them until they’ve gone through the whole process of settling an estate.

So this is your other step: just add your spouse’s name on there and have some shared ownership. If not, I’ve also seen you can go to the bank and get a power of attorney, and you can put things on there. That’s for if something happens to you in the hospital—you want to make sure that your power of attorney for financial decisions and health directives are done as well. But that’s a whole other conversation. So making sure that everything is sorted out.

Then the third strategy: using trusts. Someone came, we sat down and they read an article in the paper and they automatically wanted to come and they said, “We need to set up a trust.” Okay, it’s a little bit more complicated, but you can use a trust. This might sound fancy, so I’m gonna try and keep it very simple.

Let’s start with a living trust. So I’m gonna explain this strategy, this tip that people use to try and save taxes in their estate planning.

A living trust—imagine a great big box. You put all your stuff inside the box that you own: your house, your investments, your savings. You still hold the key, you still make decisions, but when you pass away, someone you trust gets that key. They open the box and then they follow the instructions you’ve left. That’s what a living trust is. You’re still in control while you’re alive, and when you’re gone, everything inside the box skips all those probate court fees. It just goes straight to your family—faster, easier, more private—and someone else now has the key and will follow your wishes of how you want it.

Now there’s a—so I don’t want to get too deep in the weeds, but there’s an alter ego trust. That’s if you’re single and you’re over 65. And then there’s a joint partner trust. That’s if you’re a couple.

But this is very important: it is not cheap. This is not an everyday strategy that we use. A lawyer needs to set it up properly. You also need to move all of your assets into it. You can imagine what that entails, right? Putting everything inside that box that you own, which takes time and a bit of effort, and you have to go through the pros and cons.

This strategy is usually best if you have a huge, a large—very large estate and a huge sum of money. It’s expensive, it’s complicated. Taxes generally at the highest rate. It’s one of those things we’re planning—it takes a lot of planning: financial advisor, lawyers, and accountants.

There’s also a testamentary trust. This is another version of a trust. It’s an option you can include in your will. So that testamentary trust doesn’t exist until you pass away. It’s like planting a seed in your will that grows later.

So you can use this if you have a child or grandchildren who isn’t great with money. You want to leave money to someone down the road that, you know, they probably need some guidance and help. If you want control over how that money is paid out over time. I live in a prairie province, and I see this used a lot for leaving farmland in families. So it’s a great tool when you want to protect your legacy and still provide support.

So remember though, the testamentary trust is in your will, and it doesn’t exist and turn on until you pass away, and you have to leave instructions. So you’ve got your living trust, and then you’ve got your testamentary trust that activates after you’re gone. They are another way to make sure your wishes are followed and your money is used wisely, but it does take a lot of homework and some great guidance for those two things.

Fourth Strategy: Gifting While Alive. Another way to save money in your planning and save taxes is there’s no gift tax in Canada. So you can gift while you are alive, and this is huge in our office right now. You can give money to your kids, your grandkids. Now, it shrinks the size of your estate, so there’s less to go through probate or there’s less to pay taxes on when you pass away.

One of the things with gifting, though, is that you just want—you want to put the oxygen mask on yourself first. You want to make sure, and that’s my job, is I protect you first. It’s like, “Hey, do you have enough? Are we taking care of you first before you start gifting, thinking that you’re gonna gift everything away?” We want to make sure that we’ve planned everything for you and how you’re gonna have your long-term care and your healthcare, all of that. And so once you know that there’s above and beyond, you can start doing that gifting.

And then it’s up to us to also say, “Okay, let’s look at the tax while you’re alive and make sure that we save some tax in your gifting, or at least be aware and make the plan.” And it is a beautiful thing ’cause you actually are around to see people enjoy it. So gifting money is fantastic.

If you’re gonna gift property, like a cabin, there could still be some taxes. So again, that’s where we just do our little tax check first. So gifting while you’re alive is a beautiful thing.

Fifth Strategy: Keep Your Will Updated. And then the last one I want to touch base on that is a huge saver is keeping your will updated. This one matters more than people think. This is important when a spouse passes away and we need to take a look at the beneficiaries and review future estate taxes. This is when you need a professional to look and see if there should be beneficiaries on your investments or if it should be your estate. Doing this work will help you save taxes.

A will is your way of saying, “Here’s what I want.” Without it, the court guesses. That’s not ideal.

So make sure you have a will. Make sure you have someone you trust as your executor. The executor is the person that’s going to execute your wishes. You want someone who can be fair, organized, and isn’t afraid of some paperwork.

Remember, make a list of your stuff: bank accounts, insurance, property, so they don’t have to play detective after you’re gone. That’s a very common thing. That’s why in our office we really talk about this—it’s about consolidating and having a list of where everything is and keeping it very, very simple.

Simple saves taxes, and we have a planner for that. It’s the Family CEO Organizer. So it’s the “what if” binder. We’ve got that if you need one, and it helps you list where everything is so that when the time comes, someone knows exactly where everything is and what you want.
What Is Probate?
So I always get—there’s a lot of questions around, and I’ve thrown around that word “probate.” There’s this term probate. What is it really?

Okay, so probate is the court process that proves your will is legal. It’s like a final stamp saying, “Yep, this is official. Go ahead.” Once probate is done, your executor can go ahead and follow your wishes, like selling your home, paying off bills, or transferring money to your kids.

So probate is something that’s needed when—I believe, don’t quote me, I’d have to double-check—I think it’s anything over $25,000 needs to have probate. So generally you’re gonna have to—it’s just a process through the court to just file it. And literally in my head, I know this isn’t what it is, but all we need is that darn stamp on there that says, “This has been approved.”

So probate comes with a little bit of a fee. In Saskatchewan, the probate fee is $7 for every $1,000 in your estate once you’re over that $5,000 mark. So if your estate is worth $500,000—maybe so if that’s savings and investments, non-registered—your family would pay around $3,500 in probate fees. Now, that’s not outrageous. It’s also not nothing, especially if you’ve already paid taxes your whole life. You’re like, “Oh, great,” right? There’s things we can’t avoid, and that is tax upon death.

So it’s not super expensive. Here’s the important thing: we’re not trying to avoid probate at all costs. This is where trying to avoid it and doing all these dances around it and maneuvers sometimes cost more than just the darn probate fee. You know that example of $3,500 on $500,000? So avoiding it at all costs is not recommended.

Probate can be helpful when things are complicated, when there’s debts to settle. What we’re trying to do is avoid unnecessary delays and costs, especially for assets that could have just gone straight to your spouse or kids. Remember, probate isn’t always bad, but smart planning means not putting everything through it when you don’t have to. So if we can avoid it and have some good, simple planning—bonus.
Final Thoughts
Okay, final thoughts. Wrapping it up here. This isn’t about perfection; it’s about clarity. It’s about making sure your hard work gets passed on the way you want with the least amount of stress and cost.

So I’ll leave you with one thing you can do this week: check your investments. Maybe it’s checking your tax-free savings account and making sure that your spouse is on there as a successor holder. It’s checking that your partner, your spouse, is named as your beneficiary on your registered investments.

Maybe it’s naming a beneficiary on the TFSA. If you don’t have a spouse, you can put someone’s name on there—adult children. Sometimes we forget that you can do 50/50, you can do 33.3% if you want to divide it evenly. And we forget that on that tax-free savings account, you can put a beneficiary if you don’t have a spouse.

Maybe it’s updating your will. Have a read through, see if it’s still all the things that you want it to be. The executor is still who you want it to be, and your wishes are in it. Maybe it’s having a chat with your adult children about your wishes.

Whatever it is, take that one small step. Your future self and your family will thank you.

If you want, we have an estate planning checklist, or you want help running through the “what if I died tomorrow” scenario—because that’s just so fun. We all think of that. Because maybe if it’s on your to-do list, it’s been bugging you and you’ve got that small whisper and it’s getting louder in your ear, like, “Oh, I should be doing this.”

Whatever it is, reach out to me or visit astrofinancial.ca. Thanks for listening.