Life Insurance Valuation

We take a close look at how you can extract retained earnings from your corporation in a tax efficient manner.

Changes to the Taxation of Estates

Estate, trust and tax planners have long favoured testamentary trusts as vehicles to pass along assets to beneficiaries or heirs.   A testamentary trust is generally a trust or estate that is created the day a person dies.  Commonly, these trusts are established in a testator’s will.

A significant benefit to testamentary trusts had been that income earned and retained in the trust received the same graduated rate of income tax as an individual tax payer.  Unfortunately, under the terms of Bill C-43, after January 1, 2016, all income retained in the trust will now be taxed at the highest rate of tax applicable in the province in which the trust is resident.

There will be two exceptions to this new rule – The Graduated Rate Estate (GRE) and a Qualified Disability Trust (QDT). Read more

The Estate Bond

Growing your estate without undue market risk and taxes

Often we see older investors shift gears near retirement and beyond.  Many become risk adverse and move their assets into fixed income type investments.  Unfortunately this often results in the assets being exposed to higher rates of income tax and lower rates of return – never a good combination.

Or maybe the older investor cannot fully enjoy their retirement years for fear of spending their children’s inheritance.

The Estate Bond financial planning strategy presents a solution to both of these problems. Read more

Pay Attention to Your Beneficiary Designation

It’s more important than you think

Naming a beneficiary is a valuable feature of life insurance and segregated funds policies so it is important to carefully choose your beneficiaries.

Estate – the default choice

Many people choose to name their “estate” as their beneficiary.  Although this is an easy short-term solution, it is important to review the risks of doing this.  If you are stuck for a significant “other” beneficiary, don’t forget to change it to a more appropriate option later.  Why?

  • The proceeds will be subjected to probate fees and the benefits received will be co-mingled with all the other estate assets which may be exposed to various third parties.

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Estate Planning for Blended Families

 Avoid Disinheriting Your Children

In today’s family it is not unusual for spouses to enter the marriage with children from previous relationships.   Parents work hard at getting these children to functionally blend together to create a happy family environment.  Often overlooked is what happens on the death of one of the parents. In most cases special consideration for estate planning is needed to avoid relationship loss and possibly legal action.

Typically spouses leave everything to each other and when the surviving spouse dies, the remainder is divided amongst the children.  The problem? Even with the best of intentions, there is no guarantee that the surviving spouse will not remarry and inadvertently disinherit the deceased’s children. Read more

What to do after selling your business

The contract is signed. The cheque is cashed. Your business has been sold or you’ve been given a golden handshake. Now what?

It’s a question many former company owners have a tough time answering. Whether you’re looking to sail around the world, start a new enterprise, or spend time with your family, you must now figure out what to do with your money—and with your life.

Here are 13 things business owners should do after leaving.

  • Relax

Shifting gears in a rush increases the likelihood of missteps, financial and otherwise. Take some time to reflect on what’s happened, and what’s to come. You don’t need to accomplish everything at once.

  • Define your goals

Do you want to spend time with family? Travel? Get involved in a charity or a community cause? Start a new business? Write it down.

 

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Is it Time for your Insurance Audit?

Has it been awhile since you last looked at your insurance portfolio? Are you a little sketchy in your recollection of all the coverage you have and why you have it? Are you uncertain as to whether or not your portfolio reflects your current situation? If this is the case, this might be the ideal time to have an audit of your insurance policies. Circumstances can change over time and making sure your protection keeps pace is a worthwhile exercise.


A comprehensive audit should review the following:

  • Is the total death benefit of your life insurance appropriate to your needs? A current capital needs analysis can help to determine this.

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Don’t Wait Too Long to Convert Your Term Insurance

If you require permanent life insurance coverage for family, estate planning, business, or tax planning purposes or you just wish to accumulate money in your life insurance program it may be time to look at a permanent, level cost solution.

Many of us purchase large amounts of low cost term insurance to cover our needs while we are raising our families or growing our businesses.  However, as the saying goes, “there is no free lunch”.  Eventually this low cost term insurance starts to become expensive and other options should be considered.  If you are unable to qualify for a new permanent insurance policy don’t worry, your safety net is the conversion option in your existing policy.

4 REASONS TO CONVERT YOUR COVERAGE

  • A change in your health you are no longer able to qualify for life insurance or you have received a sub-standard rating.  

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How Much Risk Can You Tolerate? Part 3 of 3

Over the past two months we have examined some of the risks that challenge most of us.  It is almost impossible to avoid risk entirely. Knowing where the pitfalls lie and planning for them will certainly help.  You might, however, want to consider shifting the risk to someone else, like a life insurance company.  Life insurance companies are in the risk business and they have products and services that can assist you in dealing with risk.  Some of these are as follows:

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