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For families
Most families assume the estate passes to the children intact. In practice, when the second parent dies, the CRA treats most assets as sold and taxes the growth, and registered accounts are taxed as income on the final return.
The bill is due within months. If the estate’s value is tied up in a cottage or a rental property, the children may have to sell something the family hoped to keep.
The short answer
When the second parent dies, a family estate can owe capital gains tax on a cottage, rental property and investments, income tax on the full value of RRSPs and RRIFs, and Ontario probate on assets that pass through the will. Family estate tax planning calculates that bill in advance, identifies the cash available to pay it and puts a plan in place so your children are not forced to sell.
Capital gains on property and investments. A cottage, rental property or non-registered portfolio is treated as sold at death. Half of the gain is taxable. Only one property per family can be sheltered by the principal residence exemption for any given year.
RRSPs and RRIFs. Without a rollover to a surviving spouse or eligible dependant, the full value is taxed as income on the final return, often at the top rate.
Ontario estate administration tax. Assets that pass through a probated will are charged $15 per $1,000 above $50,000.
Timing. Transfers to a surviving spouse can usually defer the tax. The full bill typically arrives at the second death.
≈ $650,000
Tax at the second death on a cottage bought for $300,000 and now worth $1.3 million, plus an $800,000 RRIF, at 2026 Ontario rates. Probate is extra if the cottage passes through the will.
A valuable estate does not automatically supply cash. Families who plan ahead decide which money will pay the bill: savings, a planned sale, borrowing or life insurance arranged for that purpose.
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A relaxed conversation about your family, what you own and what you want to protect. No forms and no product discussion.
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We list what you own, how it is held and who is named on each account and policy.
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We calculate the tax at the second death and the cash available to pay it.
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We present the choices that apply to your family, each with its cost and result.
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We work alongside your accountant and lawyer, and review the plan as values change.
No. But at death, most assets are treated as sold and the gains are taxed on the final return, and registered accounts are taxed as income. Ontario also charges estate administration tax on assets that pass through a probated will.
Assets left to a surviving spouse can generally roll over without immediate tax. When the second spouse dies, there is usually no rollover, so the deferred tax becomes payable.
Not fully. A family can designate only one property as its principal residence for any given year, so one of the two will usually face capital gains tax. Your accountant can assess which designation saves more.
By identifying the money in advance. Options include savings, a planned sale of other assets, borrowing, or life insurance arranged to provide cash at the second death.
Book a free 30-minute call. The call and a preliminary estate tax estimate are both complimentary, and you leave knowing whether there is a gap worth fixing.
General educational information. Legal, tax and insurance decisions require advice appropriate to your circumstances.
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Sami Majdalani is a licensed life and accident and sickness insurance agent in Ontario. Verify my licence on FSRA’s website. Insurance and segregated fund contracts are placed through HUB Financial, a managing general agency. Eagle Wealth Partners is paid by commission from the insurers whose products clients buy, and may also receive bonuses or other incentives from insurers. A full disclosure of the insurers we represent, how we are paid and any conflicts of interest is available on request.
Segregated fund contracts are individual variable insurance contracts issued by insurance companies. Any amount allocated to a segregated fund is invested at the risk of the contract holder and may increase or decrease in value.
Information on this site is general and is not legal, tax or insurance advice for your situation. Planning is implemented with your legal and tax professionals. © 2026 Eagle Wealth Partners Inc.
