Taxation on Death

Please review the case below and answer the questions that follow.

Background:

-You are the financial planner for Mr. Ahmad and his family, who are a residence of Whitby, Ontario.

-Mr. Ahmad got married again 2 years ago to Sarah, on May 5, 2018 (his third marriage).

-Mr. Ahmad was thinking of selling his business at the end of this year (2021) and then retiring.

- However, unfortunately, Mr. Ahmad died last month (November 2021).

- At the time of his death, Mr. Ahmad had a large investment portfolio, spread out among three accounts: an RRSP, a TSA and a Non-Registered Investment Account.

- Mr. Ahmad also jointly owned the principal residence with Sarah.

You have a meeting set up later this week with the Ahmad family members and the Executor of Mr. Ahmad's estate to discuss the deceased's assets. In preparation for this meeting, you decide to review your Ahmad family file. Reading through the file you make the following notes:

RSP Account-Worth approximately $1.2 million today, named beneficiary on the account is currently Wife #1. (Book Value is $450,000). Wife #1 died two years ago,

-TFSA-Worth approximately $45,000 today, no named beneficiary on this account. (Book Value is $47.500)

- Non-registered investment account-Worth approximately $750,000 today. (Book value is $475,000) Life Insurance policy-$500,000, named beneficiary is Wife #2. Principle Residence-Worth approximately $2.4 million today. (original cost was $2 million, 2 years ago). Owned jointly with Sarah.

-Business (CCPC), which Mr. Ahmad jointly owned with his brother- Valued today at approximately $3.25 million. (Business book value is $1.5 million) Mr. Ahmad's Most Recent Will-Dated June 5, 1999, just after Mr. Ahmad's second marriage.

1. Did Mr. Ahmad have a valid will when he died?
2. Who will inherit the money from the RRSP account?
3. Does Mr. Ahmad have a tax liability from the RRSP as a result of his death?
4. Who is the beneficiary of Mr. Ahmad's TFSA?
5. To whom does the money from the insurance policy get paid to after Mr. Ahmad's death?
6. Does Mr. Ahmad's estate have to pay income tax with regards to payment from the life insurance policy?
7. To whom does the life insurance policy get paid to? Wife #2 or Sarah?
8. Mr. Ahmad jointly owned ABC Business with his brother. Will there be any tax consequences to Mr. Ahmad as a result of the transfer of all of the business ownership to Mr. Ahmad's brother? If there are tax consequences to Mr. Ahmad, how much is added to his income for the year?