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Stage · Estate planning in Canada

Preserving: late-life tax minimization

At 65+, Canadians gain access to alter ego trusts, joint partner trusts, and pension income splitting. Charitable giving strategy becomes relevant. The balance between gifting during life and deemed disposition at death shifts; so does the math on which assets to draw down first.

Reviewed by Ben Stevenson, Managing Editor, Canadian Money Help Updated April 21, 2026 Methodology

What to do this week

  1. Review pension income splitting annually. Up to 50% of eligible pension income (RRIF after 65, DB pension) can be shifted to a lower-income spouse.
  2. Consider gifting to adult children during life rather than at death. Gifts have no Canadian gift tax, and can reduce your eventual estate tax bill.
  3. Evaluate charitable giving vehicles: direct bequest, donor-advised fund, private foundation, gifts of appreciated securities (eliminates capital gain).
  4. If you're 65+ and want to bypass probate, investigate alter ego trusts (single person) or joint partner trusts (couples). Transfer assets to the trust without triggering immediate tax; trust holds for your lifetime; assets pass to beneficiaries at death without probate.
  5. Update beneficiaries on all registered accounts. Confirm designations still match your will. Inconsistencies cause litigation.

What to avoid

  • Drawing only from RRIF while TFSA and non-registered sit idle. Flat-lining taxable income at the marginal rate for 30 years wastes low-bracket years and compounds the final-year tax bomb.
  • Charitable bequests in the will without tax planning. Donating appreciated securities during life or at death eliminates the capital gain; cash donations don't. The tax difference on large gifts is material.
  • Alter ego / joint partner trusts without legal advice. Transfer rules are strict; a botched transfer triggers immediate deemed disposition of everything moved.
  • Dying intestate in this stage. At 65+, many Canadians have meaningful assets. An outdated will written at age 30 may no longer reflect your family structure.

Calculators for this stage

Final Return Tax Charitable Giving Comparison

Forms to file at this stage

Frequently asked

What's an alter ego trust?

A trust available only to Canadians 65+. You transfer assets into the trust without triggering immediate tax; the trust pays you all income for life; at your death, assets pass to named beneficiaries without probate. Useful for large Canadian estates seeking to avoid probate fees and simplify administration.

Is there a gift tax in Canada?

No. Canada has no gift tax. But gifts of capital property (stocks, real estate, a cottage) trigger deemed disposition at fair market value, the giver pays capital gains tax as if they sold it. Cash gifts between family members are tax-free.

What's the best way to leave money to charity?

For appreciated securities (stocks, mutual funds with capital gains), donate the securities directly, you get the donation credit AND the capital gain is eliminated. For cash, it's just the credit. For very large gifts or ongoing causes, a donor-advised fund or private foundation can be set up through a community foundation or specialist.

Should I give assets to my kids now instead of at death?

Depends on size, your liquidity, and their situation. Gifting during life reduces your future estate and can be seen compounding in the recipient's life. Risks: you may need the money later; gifts to spouses trigger attribution; large gifts of capital property trigger your capital gains now.

Next stage

After death: executor and beneficiary →