The Armstrong Group - ScotiaMcLeod Whitby - Services

By: The Armstrong Group  09-12-2011
Keywords: Insurance, Tax, Estate Planning

Legacy Planning is becoming more important to Canadians. Ensuring those left behind are financially looked after, leaving funds for your favourite charity and ensuring minimal taxes are paid is something Canadians are becoming acutely aware of.

An increasingly popular estate planning method is Planned Giving (commonly referred to in the past as “Charitable Giving”). Planned Giving is a way to ensure you can make a charitable contribution and receive a financial benefit either now or in the future. You can choose to leave a portion of your wealth to one or more charities. Planned Giving is a consideration that should be given to your overall estate plan if you are at all thinking of leaving funds to a charitable organization and looking for a tax benefit.

You've worked hard to establish financial security for you and your family. And it's important for those you care for to continue to enjoy that financial security upon your death.

That's why you need a proper estate plan. Preparing your Will today will help ensure your assets are passed on to your beneficiaries as you wish. Plus, you can implement strategies to minimize the taxes and other charges to your estate at death.

The Armstrong Group will help. Our estate planning professionals can help you create a plan to meet your goals and protect your family's wealth for generations to come.

In addition to having the specialized legal, tax, and financial expertise required for the most complex estate plans, years of experience have helped us understand and develop a sensitivity to the emotional issues that often accompany estate planning.

We are committed to working with you over the long term. After helping you define your estate planning goals, we monitor your plan as your circumstances change to ensure it continues to meet your objectives. With the Armstrong Group, your peace of mind is assured, knowing you are building a long-term relationship with a financial partner servicing your needs now and those of your beneficiaries in the future.

Most people spend a lifetime of hard work building their estate: saving their money both inside and outside their RRSP, making prudent investment decisions, owning a home and perhaps a vacation property, etc. What most people don’t know, however, is that Revenue Canada is their silent partner when it comes time to distribute their estate to their children and their heirs.

Depending on what types of assets an estate is comprised of, the share Revenue Canada takes for their coffers will vary. At death, all property is deemed to be disposed of for tax purposes: RRSPs are fully taxable in the estate: any investments with unrealized gains are taxable; a vacation property may be partially taxable; and probate, administration, legal and executor fees will be taken from the estate. In the case of property moving from one spouse to another, it can be transferred tax free; in most other cases (there are some exceptions) it is taxable.

If the proper planning is not done ahead of time, the impact on the estate could be small or it could be devastating. The full value of a particular asset may not be realized in the event of an untimely death. For example, in a bad real estate market, if the children or heirs of an estate do not have enough cash to pay the tax, a home or a cottage may have to be sold below its true value to pay the taxes owing on its deemed disposition. Once the owners of the estate are deceased, it is too late to do any planning.

Creating or preserving an estate through life insurance is a tremendous opportunity for people to protect what they have spent their life trying to create a valuable estate! Insurance creates a large immediate estate and provides a tax-free benefit upon death. Other advantages of insurance are potential creditor protection and avoidance of probate fees because it passes outside the estate. This means that the insurance will not be subject to probate and administration fees or legal action if the Will is challenged or contested.

Preserving an estate through life insurance requires funding. The source of this funding should not be short or medium term savings you will use to buy a car, cottage, clothes, or go on a vacation; it should come from that part of your savings that you will never use in your lifetime. Estate preservation is the ultimate long term planning strategy because its benefits are not realized until death.

Building an estate takes a lifetime, but without planning, tearing it down only takes an instant. Insurance has played a prudent and valuable role in protecting many estates. The financial benefits that insurance offers are obvious, but the peace of mind it offers cannot be measured.

You work hard to earn your money and in turn you want to see as much of it as possible work for you.

Building your wealth requires a careful look at your overall financial picture, particularly your own personal circumstances and the tax implications of your investments. By structuring the right mix of investments for your portfolio, you can pay less tax and ensure that you are receiving optimal returns.

The first step towards developing an effective investment plan is knowing how much tax you pay in total, and how much tax you pay on each type of income you receive. It may seem obvious, but many Canadians aren't sure what their marginal tax rate is.

It is important to consult with a professional tax advisor for tax planning guidance. He or she will take your personal circumstances into account in determining appropriate recommendations. From there, you and the Armstrong Group can develop a tax-effective investment strategy.

To get you started, we offer our Tax Handbook for Investors, which is designed to show you how much tax you are paying and to give you tips on how to reduce that amount. The handbook covers topics such as the taxation of investment income, borrowing to invest, income splitting, tax and retirement planning, investment products with tax advantages and U.S. investments.

Keywords: Estate Planning, Insurance, Tax

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The Armstrong Group - ScotiaMcLeod Whitby - How We Help

We believe every segment of financial planning is connected and all segments of financial planning must be addressed as you plan to achieve full financial success. We believe a conservative diversified strategy is the right way to manage your portfolio. We assess risk/reward trade-offs when evaluating all investment alternatives. We strive for consistent returns, without taking undue risk. Structured process that is monitored continuously.