Canadian tax professionals warned that cash and assets that are not intended to be spent when the parents are alive can be given to the children to save tax.

Many people do not realize that there is no gift tax in Canada. So, if cash is given to children, grand children or anybody, it will not be considered as income by tax authorities and thus will not be taxed.

Tax and asset planner Jamie Golombek said, "If you want to give them CAD 1 million, you don't need to report to any place. It will not appear on their tax forms and thus will not be counted as income."

However, if the gift is real estate or stock, the value of which will increase, such as giving a vacation home or a group of stocks, the gift receiver may need to pay capital gain tax.

Even if tax is required, there are tax advantages. For example, if the parents needing to pay high tax, give the children a large amount of gains from unregistered investment portfolio, they may avoid the clawback from the Old Age Security (OAS) in the future.

Financial planning consultant Jason Heath said, "If there is clawback to your OAS, it means you are paying at least 43% of the tax. According to different provinces and places of residence, you are easily deducted up to 62% of the tax."