As digital assets become increasingly integral to our financial portfolios, establishing a robust estate structure in Canada to protect and manage these assets is paramount. However, embarking on this journey raises an important question: What is the financial cost of setting up such an estate structure? Understanding these costs upfront can help in planning and ensuring that your estate structure aligns with both your financial and estate planning goals.
The foundation of establishing an estate structure involves legal guidance and the necessary government filings.
On average, legal fees for setting up a comprehensive estate structure for digital assets in Canada are around CAD 25,000 plus tax. This cost covers the expertise of lawyers who are specialised in estate planning and digital assets, ensuring that your structure complies with Canadian laws and optimises tax benefits.
These fees vary depending on the province where the company is set up. You can expect government filing costs to range from CAD 200 to CAD 500. These fees are additional to the legal costs and cover the administrative expense of registering your structure with the relevant governmental bodies.
While legal advice is crucial in drafting and structuring your estate, accountants play a key role in evaluating the assets and ensuring compliance with tax laws.
An accountant's expertise is required to accurately determine the cost basis and the fair market value of the digital assets at the time of the transaction. This valuation is essential for the legal team to draft precise documents reflecting the true value of your assets.
Another significant role of an accountant is to manage tax filings related to the estate structure. This includes preparing and submitting the necessary paperwork to the Canada Revenue Agency (CRA) during tax time, ensuring that your estate structure adheres to Canadian tax obligations and takes advantage of possible tax benefits.
Combining legal fees, government filing costs, and accounting services, the initial setup cost for the ultimate Canadian estate structure for digital assets can range significantly based on the complexity of the estate, the value of the assets involved, and the specific services required. However, a preliminary estimate puts the setup cost in the range of CAD 25,200 to CAD 25,500, excluding taxes and specific accounting fees, which can vary based on the accountant's rates and the extent of their involvement.
Setting up the ultimate Canadian estate structure for digital assets requires a substantial initial investment. This investment not only secures your digital assets within a legally compliant and tax-optimised structure but also provides peace of mind knowing that your digital legacy is well protected. As with any significant financial decision, consulting with professionals who specialise in digital assets, estate planning, and Canadian tax law is crucial to tailor the structure to your specific needs and goals.
