Here is an example of how an estate can shrink when there has been no estate planning. The same assumptions were here as on the estate shrinkage form.
| ASSET | VALUE AT DEATH | TAX |
| Home | $ 1,000,000 | Nil |
| Cottage | $ 850,000 (ACB is $150,000) | $ 164,500 |
| GICS/Second mortages | $ 1,000,000 | $ 50,000 |
| RRSPs/RRIFs | $ 1,000,000 | $ 470,000 |
| Non-registered investments | $ 1,000,000 (ACB is $250,000) | $ 176,250 |
| TOTALS | $4,850,000 | $ 860,750 |
| LEGAL AND OTHER EXPENSES | ||
| Funeral costs | $ 20,000 | |
| Estate administration | $ 72,500 | |
| Legal Fees | $150,000 | |
| Real estate commission | $100,000 | |
| Equity brokerage fees | $100,000 | |
| Trustee compensation | $242,500 | |
| TOTAL | $685,000 |
The total estate shrinkage is 860,750 (taxes) + $685,000 (legal and other expenses) = $1,545,750!!!
OR
32% of the value of the estate!!