Some areas in which an estate may be taxed include:
• The disposition of RRSPs or RRIFs:
Remember, RRSPs are set up as tax deferment vehicles, they are not forever tax-free. If RRSPs or RRIFs are considered to be disposed of immediately before death then this tax must now be paid by the estate unless you have taken steps to ensure proper estate structure beforehand.
• Capital gains on estate:
Capital gains taxes on your estate come into play for such assets as shares in companies or real estate holdings. While an exemption can be made for a primary residence, 50% of the increase in value of the company shares or other real estate from the time of purchase to the value upon death are taxed and must be paid out of the estate. There are some great deferral ideas and tax planning opportunities when it comes to ownership of shares.