Collection of works of art of unequal value, woodland still unfit for harvest, unregistered firearm: many surprises can await heirs when receiving a bequest from a loved one. Fortunately, there are ways to maximize the value of these assets.
Woodland
Nearly 100,000 trees grow on Denis Carrier’s Temiscamian land. Red pines and white pines grow there every season. However, decades will pass before all this wood is worth anything. “For me, it’s worthless. For my children, it’s not worth much. But for my grandchildren, it will be worth a small fortune,” says Mr. Carrier. Duty.
Transferring land thus left without care amounts to transferring immovable property like any other. “In this situation, if for example [Denis Carrier] bought the land for $10,000 at the time and today it is worth $100,000, there is a capital gain of $90,000. That’s taxable,” says Marc St-Roch, tax specialist at the Union of Agricultural Producers.
Thinking they are doing the right thing, some leave their son as an inheritance. But this son may not consider [cet héritage] as an advantage, but as a problem he doesn’t want to deal with. […] It’s one of the fears of causing family arguments. We should talk about it during his lifetime, explain his wishes. Thus, one is much more likely to have relatively harmonious inheritance liquidity.
Denis Carrier will be able to transfer this woodland to his children without paying tax if he exploits it as part of a forest management plan for at least two years. If he is an “active silviculturist” and he or his heir is involved “regularly and continuously” in this exploitation, the possible transfer could give right to the capital gains exemption. However, this exploitation must be serious to be accepted by the tax authorities. Cutting, planting, development and timber revenues that exceed 50% of the owner’s total revenue are required. “We’re talking about agriculture here. It has to be a forest farm, if we want,” compares Marc St-Roch.
However, these two years of active exploitation do not have to be recent. “It’s like a test that you have to meet. Subsequently, even if my income is no longer up to par, it doesn’t matter. » However, be careful, a range of exceptions apply. In all cases, the majority of occasional forest producers do not benefit from capital gains exemption when transferring their land.
Also read, in our heritage file
In all cases, it is inevitable that the family is informed and that the person who will receive the land is aware of the associated charges, observes Christine Morin, emeritus notary and specialist in inheritance law at Laval University. The breakdown of the traditional family makes modern successions more complex, she explains.
“Thinking they are doing the right thing, some leave their son as an inheritance. But this son may not consider [cet héritage] as an advantage, but as a problem he doesn’t want to deal with. […] It’s one of the fears of causing family arguments. We should talk about it during his lifetime, explain his wishes. Thus, one is much more likely to have relatively harmonious inheritance liquidity. »
Art collection
Jean Pitre has a collection of around 500 works, which range from miniature tableautins to large-format paintings. Since the death of his partner, and without a child to bequeath all this art to, he has been working hard to find a future home for this precious assortment. “We want to ensure the longevity of the collection,” he recalls in Duty. “I want to make sure the collection is in the right place. »
There is no question of him abandoning the fruit of decades of meticulous research at the first auction that comes along. “It would sell for rubbish,” he fears.
Giving these works to a gallery or museum would respect the aesthetic value of this art. The problem: no institution will accept an entire collection at once. This refusal is all the more certain as these works are of unequal value. Aware of this problem, Jean Pitre had already begun to transfer these paintings piece by piece to galleries he knew well during his lifetime. The lack of space in museum warehouses prevents him from bequeathing everything quickly.
Thus forced to sell this large quantity of art objects little by little, he placed emphasis on the choice of a good executor. What’s more, he draws up a careful inventory of his collection so that the executor can know the value of each piece when the time comes to dispose of it. He also established a list of museums and galleries likely to accept the works. “Even if it is a person who is familiar with art, I will recommend the dealer who sold it to me to know the true value [des tableaux] », indicates Jean Pitre, still young, but ready for what comes next.
Fire arms
A few surprises sometimes await the heirs when it is time to empty their late ancestor’s house. Firearms not registered in the 2018 registry are regularly discovered.
“If the weapon is registered, a fairly simple transfer process applies,” says Christine Morin. Otherwise, Quebec has provided a registration mechanism as well as a protocol if you want to get rid of it. In any case, it is better to consult a professional.
The same precaution also applies to innocuous possessions that appear nowhere, such as amounts of cash discovered in the bottom of the attic. “This is where we need the imagination of professionals. What does the law provide? »
“Sometimes people will want to bend the rules. When an asset does not officially exist, people tend to keep them and not declare them. But that can cause problems later,” explains the expert. “We try to hide them from the government, other heirs or creditors of the estate. […] But if we don’t talk about it, we can lose all rights in the inheritance. »
The best avenue is still to discuss it with a notary to establish the most advantageous outcome. Especially since with professional secrecy, “there is no danger”.