Congratulations Peter on achieving your FEA designation!

Having the FEA designation leads to deeper relationships with family enterprise clients and a broadened perspective of the issues business families face – including generational transitions.

After completing the year-long Family Enterprise Advisor Program, followed by a rigorous exam process, Peter Andreana was granted the Family Enterprise Advisor (FEA) designation. He joins the ranks of approximately 350 highly skilled, experienced, and educated FEAs across Canada who have demonstrated outstanding competence and practice advising business families.

Business families like yours have complex and unique multi-generational challenges. Enterprising families need guidance and support to structure the unique processes required to succeed, thrive, and build a legacy. The FEA designation means we are better equipped to deliver thoughtful integrated and collaborative decision-making within the family, the business, and the ownership circles.

The FEA designation is a valuable addition to our technical expertise and provides Continuum II Inc. and our clients with a diverse lens that is necessary in supporting a family’s complex continuity needs. And in case you didn’t know, Continuum II Inc. is also a family business founded by Peter’s mother Lise, now retired, and in the office Anita (sister) and Cathy (sister-in-law) work side-by-side every day along with the rest of the team.

Welcome to the 1st ever FEA workshop!

SAVE THE DATE:  Thursday, May 30th - 8am to 3pm
Check-in starts at 7:30am - Breakfast, lunch, and a wealth of great information including meeting materials all for only $50 per person. Feel free to pass this along to your family members, business partners, clients or friends. All are welcome. Get tickets now!

Using life insurance under new passive income rules - by Advisor.ca

Estate Protection: Secure Your Legacy

You’ve spent a lifetime planning ahead to be prepared for every stage of your life. Leaving a legacy isn’t any different.

Estate Protection is a segregated fund that has the same benefits of potential growth and exibility for your investment portfolio. There’s also insurance protection for you and your beneficiaries through built-in guarantees.

Is Estate Protection right for you?

• Are you in the later years of your retirement? 
• Do you want to protect the money you have set aside for the important people that matter the most in your life? 
• Are you looking to pass on your legacy? 
• Do you want to participate in the financial markets, to potentially grow your money? 

If you answered yes to these questions, then Estate Protection might be the right choice for you.

What does Estate Protection offer?

• 100% death benefit-When you die 100% of your investment is protected to pass on to those who are most important in your life
• 75% maturity guarantee-When your policy ends (at age 105), even if the markets go down, Estate Protection protects most of the money you put in 
• You can select funds which can allow you to lower the impact of market volatility on your investments

Saving money is an important part of protecting the legacy you’ve built for your loved ones. With Estate Protection you can have an increased sense of certainty. Because the amount that you’ve set aside does not flow through your estate, you can save the legal, taxes, executor and accounting fees, etc. that can be part of passing on your legacy.

Overall, when it comes to fulfilling your wishes you want a sense of security. You want to feel like you have made the right estate planning decisions. You want to know you have adequately prepared for the financial well-being of your loved ones. By partnering with a financial advisor, you can be confident you have secured your legacy.

Contact Continuum II today and let us help you secure your legacy.  

For more information on Estate Protection, read the full overview from Great West Life. 

Health needs in retirement

Retirement is a milestone that many Canadians work towards for most of their lives. When preparing for that long- awaited goal of life after work, aside from ensuring you have enough savings to live comfortably, it’s also important to consider potential health care needs and costs.

Solutions For Financial Planning, lays out how to include health and dental benefits in your overall retirement plan. Longevity and wellness are top of mind for many Canadians, but we may be more prone to health issues as we age. Among Canadians aged 65 and older, almost 90 per cent have one or more chronic conditions, such as arthritis, osteoporosis or cardiovascular disease. These conditions may require everything from accessibility equipment to physiotherapy to nursing care.

Canadian seniors generally spend more on health care than younger Canadians. A 2014 survey found that households headed by a person aged 65 and over spent 6.1 per cent of their goods and services budget on health care, whereas households headed by someone under 30 spent 2.8 per cent. It may not come as a surprise to learn that prescription drugs are one of the largest health care expenses for Canadians over 65, accounting for almost 30 per cent of their out-of- pocket health spending. Those fortunate enough to enjoy group health benefits during their working years may not be fully aware of the true costs of health care.

Plan for expenses. Understanding potential health care needs is only one piece of the puzzle – knowing how you will pay for it all during your retirement years is another.

A beneficial first step is  determining whether your employer offers continued coverage for retirees. Then, if it applies to your situation, consider your spouse’s coverage – will it be enough for your needs, and how long will it be in effect? If your circumstances dictate shopping for a new plan, there are a range of options to consider. Some of the common health services covered are prescription drugs, hospital stays, nursing and home care, vision care, and medical equipment, as well as dental services such as exams, cleanings, llings and root canals. Look for plans that offer a variety of levels, enabling you to choose one that most closely aligns with your needs and budget. Many plans also offer coverage for spouses and children, add-ons such as travel insurance, and supplementary features like special rates for couples and families with multiple children. 

Be Proactive. Securing health and dental insurance ahead of retirement can be beneficial for a few reasons. Not only will this prevent a gap in coverage, but certain plans feature guaranteed acceptance and no medical questionnaire if you apply within a specific time a er your group plan ends. Throughout the process, your advisor is the person with the best expertise to help you understand the different plans available and to assist in deciding what options fit your needs. Having the right health care plan in place can help alleviate concerns about paying for future medical requirements and put more focus where it should be – on enjoying retirement to its fullest. 

Contact our offices today for more information on retirement planning.

Wow, what an exciting day!

I would have never guessed to have said that about life insurance, but I just did.

20 years ago my mother, Lise Andreana, basically forced me to buy a life insurance policy because it would be good for my future.  All I remember is asking myself, how am I going to afford this when I can’t even buy food? Why does someone at my age need life insurance?  Maybe she is just trying to reach a sales goal and using her kids to get her there? (Just kidding about that last one)

In my early twenties, $50 a month was, to me, a whole lot of money that I could have been spending on the necessities of life.  But I was a good girl and did what my mother asked me to do (well, in this case, lol).  As the years went by, the payments became easier and easier to make especially since it was on automatic banking.  Then about 10 years ago, it occurred to me that my premiums would be 0.9% less if I paid annually instead of monthly, so I then made that change to save some money, and again the premiums became easier to afford each year.

Fast forward to today… I received my annual policy statement and guess what it says?

I now have over $71K in death benefit and over $13K in cash values that are just going to keep on growing.  The best part of all? The single line that reads; PREMIUM: Your policy is now paid-up. There are no more premiums payable.  This is the exciting part!  The 20 pay policy my mother sold me when I was in university is now paid off in full, but I have coverage for life that will continue to grow!

So now, I sit here thinking to myself what will I do with my “new found” money?  I can tell you that purchasing another whole life insurance policy has surely crossed my mind.

#adulting #securingthefuture #beingprepared #ContinuumII #advisorsgotyourback #financialplanning #financialgoals #lifeskills   #formyfamily #starttoday #advisors #millennials #nowyouknow #family #insurance #motivation #beneficiaries #money #life #winning #parenting #grownup #tips #investment #estateplan #estateplanning #estate #startnow

Have you been asked to be an executor?

Has someone close to you asked you to be the executor of their will?  

To a friend or loved one, you might seem like the perfect person to be their executor. And while it may appear to be an honour, it is a huge responsibility. Before you agree to the job, here's what you need to know.



Estates big or small-it will be a lot of work.
- Any estate may have multiple properties, numerous possessions, extensive wealth or many beneficiaries.
- There may be numerous steps to get through before you can distribute any assets, including being responsible for taxes.

Be aware of potential conflicts
- If you are being asked to be an executor by a friend, you might want to consider why? In some circumstances, it could be to prevent family conflicts, in which case you could be on the hook to mediate some explosive discussions as to who gets what.

Are you ready for litigation? 
- If the beneficiaries don't like the decisions you've made, you might find yourself the subject of a lawsuit.

Compensation
- There are no rules about how much an executor should be compensated, although the rule of thumb is typically 5%.
- Be sure to note that if the beneficiaries file a lawsuit, and it is found that you haven't used the estate funds the way they were intended, you could be liable to to repay the funds from your own pocket.
- Ultimately, you have to awknowledge that all your hard work could be for pennies.

The bottom line is that being an executor is a lot of work, before you take on the job be sure to consider all of the possibilities.

Talk to your Continuum II advisor today, we can help guide you in the right direction.

Holograph Wills In Ontario

Holograph Wills 

A holograph will that is wholly handwritten by a testator is called a holograph will. Holograph wills are exempt from the statutory requirement that a will be witnessed by at least two people, who each subscribe the will in the presence of the testator.

Below, our friends at Pallett Valo LLP, have laid out everything you need to know about validating a holograph will.

A testator may make a valid will wholly by his or her own handwriting and signature, without formality, and without the presence, attestation or signature of a witness.

Wholly in the handwriting of the testator

An essential aspect of a holograph will is that it to be wholly in the testator’s own handwriting. Partially handwritten wills, such as fill-in-the-blank forms, do not meet the requirements of a holograph will. Whether or not such a document will be admitted into probate will depend on the court’s ability to sever the handwritten portions from the written portions so that they themselves form a complete expression of the testator’s wishes.

Likewise, it has been determined by the courts in Ontario that typewritten documents cannot be incorporated by reference into a holograph will. Where a holograph will makes reference to a typewritten document, the type-written portion will not be admitted into probate and the handwritten portion must be able to stand on its own as a testamentary document.

Signed by the testator

The signature of the testator will also play a key role in creating a valid holograph will. The signature must be at the end of the document and this will give effect to any disposition that comes before the signature. Anything that follows the signature will not take effect. As well, any disposition or direction inserted after the signature was made will not take effect.

Full and final expression of intention 

Separate and apart from the above two formal requirements set out in the SLRA, case law has established that the contents of a holograph will must reflect that the testator possessed the necessary intention that it be a fixed and final disposition upon death, and not merely some other expression of their wishes. The onus falls on the party alleging the document to be testamentary to show, by the content or by extrinsic evidence that it reflects this intention. 

Handwritten Alterations
Handwritten alterations to wills are governed by section 18 of the SLRA. Where a handwritten alteration is made to a formal will, the alteration must meet the same formality requirements set out in s. 4(1) of the SLRA, i.e. the alteration must be signed by the testator and witnessed by two witnesses, who each subscribe as witnesses to the alteration.

In the case of alterations to holograph wills, a handwritten alteration will only require the signature of the testator. Where there is no signature (or initials) beside the alteration, the issue becomes one of determining when the alteration was made. If the alteration was made at the time of execution of the holograph will, the change is valid. If the alteration was made after the execution of the holograph will, the alteration would be invalid.

In conclusion, while holograph wills can be a quick and inexpensive option, it is evident that there are numerous issues that may affect their validity. As with any legal document, it is always prudent to obtain legal advice about the manner in which a holograph will must be made, and the potential issues that may arise.

Financial Planning Code of Ethics

You may have noticed that over the last few weeks there has been a lot of negative press in the media about Canadian banks; their practices, education, lack of ethical behavior and lack of fiduciary responsibility. We would like to extend our concern and regret to anyone this has affected. 

At Continuum II Inc. we take all of these areas very seriously.   With a quick look at our website, you will find ALL the credentials the team has worked particularly hard to earn and maintain. Please take a moment to have a look at what the credentials mean and why they are important to you - http://c2inc.com/credentials.htm. As an office we have always held the Certified Financial Planner (CFP)  designation in the highest regard, which is why Lise, Lori, Stuart and Peter all felt it was so important to attain this premier qualification.  We are dedicated to continually build our education as investment professionals and insurance specialists, and rely on the CFP Continuing Education credits to keep us sharp all the time. 

This week, Peter spent the morning with the Financial Planning Standards Council (FPSC) enrolled in a session specifically tailored to ethics in this industry. The FPSC (completely independent 3^rd party governing body) has always taken ethics seriously, thereby creating the Guidance to FPSC® Code of Ethics, that  holds all  CFP professionals accountable to a higher level of service. 

Guidance to FPSC® Code of Ethics

http://www.fpsc.ca/guidance-code-of-ethics  

Principle 1: Client First

Principle 2: Integrity

Principle 3: Objectivity

Principle 4: Competence

Principle 5: Fairness

Principle 6: Confidentiality

Principle 7: Diligence

Principle 8: Professionalism 

Hopefully you will gather that we take your financial success extremely seriously, including an immense focus on education, caring, and consistently doing the right thing all the time.

IMPORTANT information for anyone who has an IPP (Individual Pension Plan) with B2B Trustco

In a recent decision by B2B Trustco, a division of B2B Bank and a wholly-owned subsidiary of Laurentian Bank of Canada, they are getting out of the IPP business Effective May 1^st.  They are citing reasons of increased complexity and are unable to keep up with regulatory requirements.  This is forcing all IPP clients with B2B Bank/B2B Trustco to find a new home.  IPPs offer business owners an incredible opportunity no other Canadians have available to them, allowing them to save significantly more for their retirement while taking tax advantaged dollars out of the business as an expense.  If you find yourself with a B2B Trustco IPP and need to find a new home we would be happy to help, and can offer you lower IPP administration fees, lower Investment Management Fees (IMFs/MERs) and better investment options with a track record of great returns. 

 

Contact us today as the May 1^st deadline is approaching quickly. Office: (416) 855-9892 or Email us at info@c2inc.com

If you don’t have an IPP, here is a list of some reasons you should consider an Individual Pension Plan:

• Further tax sheltering in excess of RRSP contributions
• Additional tax deductible lump sum contribution at retirement on sale of assets of the company or sale of the company itself
• Full creditor protection
• Pre-planned retirement income
• Succession planning within a family business
• No payroll tax levied on IPP contributions (depends on province)
• All costs associated with the pension plan are tax deductible to the company – including IMFs (Investment Management Fees)
• Prescribed rate of return within the IPP by Pension Legislation, ensuring your retirement portfolio is always growing as it should

Mortgage Insurance

Your insurance should protect you, not your bank.

Mortgage insurance is designed to protect the bank. Protecting your mortgage with life insurance protects you.

Are you aware of the difference?

Let's take a closer look at how personal life insurance compares with the mortgage insurance that's offered by most lending institutions.

Lending Institutions' Mortgage Life Insurance

• Decreases as your mortgage is paid down
• Premiums remain level, even though your mortgage is decreasing
• Terminates when your mortgage is paid off
• Proceeds are paid directly to the bank
• The lending institution owns the policy
• You cannot switch your mortgage insurance to another lender. If you find a better rate, you may have to re-qualify medically for the mortgage insurance protection.
• Premiums are determined by the lending institutions insurance provider and based on the value of the mortgage

Personal Life Insurance

• Coverage remains level for the duration of the mortgage
• Premiums remain level, while your coverage remains level
• Coverage remains in effect after your mortgage is paid off
• Coverage is paid directly to your beneficiary and used according to their needs
• You own the policy
• You are free to switch your mortgage while maintaining your life insurance coverage
• Premiums are determined by the insurer and are based on many factors including insured amount, age, health and time frame. Often personally owned life insurance cost less than mortgage insurance

Contact our office today and let us help you build a life insurance plan that will protect you and your estate.

info@c2inc.com or (905)332-6633

Capital gains and tax strategies

Under new rules (effective as of October 2016), Canadians are now required to report the sale of a principal residence. For most, this new rule is nothing more than a compliance exercise, albeit, one shadowed by the threat of unrestricted audits and sizable penalties.

To help maximize the capital gains tax strategies under this new rule MoneySense has given us a list of tips to keep in mind.




- Report each sale
- A change in use is considered a sale
- You can still use strategies to minimize taxes
- Keep detailed records
- Be mindful if  you own property through a trust
- Don't be surprised by these changes
- No more 1+ for foreign buyers

Tip #1: You must remember to report each sale

The new rules, announced in early October 2016, will require you to report every single property sale on your tax return. That means in your 2016 income tax return (due sometime in April 2017) you will need to report the sale of property, even if you don’t end up owing tax on the sale.

Fail to report the sale—whether intentionally or unintentionally—and you risk an audit, penalties and interest charges and the ability to shelter future home sales through the principal residence exemption (PRE).

Tip #2: A change in use is also considered a sale

Even if you haven’t actually put your home up for sale, the CRA will deem it to be sold if you change the use of the property. Take, for example, you decide to buy a new, larger home for your growing family but want to hold onto your current property and rent it out. The CRA considers this a “deemed disposition”—you haven’t actually transferred the ownership to another person, but you have changed the primary use of the property, from your family home to a rental property. As such, the CRA will consider the home sold, for tax purposes, at the current fair market value.

Tip #3: You can still use strategies to minimize taxes

For years, many Canadians minimized the amount of capital gains tax owed by strategically designating when each property was their principal residence, for tax purposes. To make this strategy work, however, the properties can not be income-producing during the years they are designated as a principal residence.

“Canadian families with a home and a cottage owned personally will be impacted by these new rules, as they’ll need to report the sale of each property,” explains John Sliskovic, private client services tax leader at EY LLP. “A family could still optimize the benefit of the principal residence exemption by designating the property with the greatest accrued gain as the principal residence.”

Example: Say you and your spouse bought a home in 2001 for $250,000. In 2002, you received an inheritance and bought a cottage about two hours away from Toronto for $200,000. For the next 14 years, until 2016, you and your spouse lived full-time in your city home and spent summers and holidays at the cottage. In that time, your family home appreciated and is now worth $650,000. During the same time period, the cottage’s fair market value rose to $725,000. Now you want to retire and part of that transition is to simplify your life by selling both properties and downsizing. If you needed to sell both properties this year, you’d end up having to pay capital gains tax on at least one—designate your city home and the exemption would save you from paying $60,000 in tax*; designate your cottage and the exemption would save you from paying $78,750 in tax. Already strategically choosing to shelter the property with the highest appreciation would save you $18,750 in tax. That’s not chump change. Talk to a tax specialist and you could further fine-tune this strategy to save even more on your taxes.

Tip #4: But now you have to keep much better records

While the new requirement to report all property sold in 2016 and in future years won’t impact strategic tax planning, it will put more onus on property owners to establish and keep better records. It will mean diligently keeping all receipts and invoices—an important aspect of real estate investment, particularly if you want to increase your adjusted cost base (ACB) on the property, and save tax later on when you go to actually sell the property.

Tip #5: Big changes if you own property through a trust

Families that own a home or cottage through a trust may be impacted in a different way. “The proposed changes limit the types of trusts that are eligible to designate a property as a principal residence,” says Sliskovic.

Example: a trust that is no longer eligible to designate the property as a principal residence under the new rules, but owns that property at the end of 2016, must separate its gain into two components: The gain accrued to 31 December 2016 may potentially be sheltered by the principal residence exemption, and the gain accruing from the beginning of 2017 to the date of disposition that will be subject to tax.

“Families that have utilized trusts to hold principal residences will need to carefully review the amendments and make any necessary changes to ensure that their estate planning is still appropriate,” explains Kim G. C. Moody, director, Canadian Tax Advisory at Moodys Gartner Tax Law LLP, in a recent legal brief.

“Non-residents who utilized trusts to acquire property and claim the principal residence exemption will also be greatly affected,” explains Moody. With these new rules the strategic use of such trusts and similar “planning is now effectively dead.”

Tip #6: House-flippers watch out!

For real estate investors that specialize in buying, renovating and then quickly selling homes—a process known as house-flipping—the new reporting requirements will force you to justify the “ordinarily inhabited” rule.

As Moody explains: “The property also has to be a “capital property” of the taxpayer.” This means that it cannot be part of the trade of the business. This obviously isn’t the case for house-flippers. “House flippers are not eligible for the principal residence exemption since properties that are quickly sold after the acquisition will likely not be considered capital property but rather inventory,” writes Moody. As a result, any profits from selling the house are no longer considered a capital gain but rather as business income and would not be entitled to the principal residence exemption.

Tip #7: Don’t be surprised by these changes

The recent changes to how sold property is reported to the Canada Revenue Agency is not the first time the principal residence exemption has been significantly changed. One of the more significant changes occurred in the early 1980s, when each spouse was no longer allowed to claim a principal residence exemption for different properties (thereby enabling married couples to “double-up” on the benefits of the principal residence exemption). As a result, all family units are restricted to sharing the principal residence exemption for every calendar year for properties disposed of after 1981. While Federal Finance Minister Bill Morneau has stated that the feds are in a holding pattern right now, when it comes to the country’s real estate markets, don’t be surprised if additional changes are announced in the near future. Right now, the Liberal government wants to assess how recent changes have impacted each property market; if the shifts they are anticipating don’t transpire, it’s quite possible the federal government, or other levels of governments, will consider additional measures.

Tip #8: No more 1+ for foreign buyers

Anyone who was a non-resident of Canada in the year a property is bought, will no longer be able to automatically add a year to the number of years the property is considered a principal residence. (Tax specialists often point out that every Canadian is allowed to claim the PRE for each year the property is owned, plus one, effectively decreasing the capital gains taxes owed, where applicable.) This new rule applies to any property sold (or deemed to have been sold) after October 3, 2016.

For the full article and more information on each tip visit moneysense.com

If you, or someone you know, wants more information on this topic, contact us today info@c2inc.com

Life insurance

Whole life, or permanent, life insurance is more than just added security, it is a valuable tool that's well worth the cost. Here are a few reasons why you should consider getting permanent life insurance.

Coverage Is For Life 

• Coverage does not expire, as long as you pay your premiums

Level Premiums

• Your premiums stay the same for the life of the policy. There are also limited pay options where the policy is fully paid up in 15 or 20 years.

Tax Shelter

• Investment growth inside the policy is sheltered from tax and can transfer to beneficiaries tax-free upon your death

Earn Dividends

• Provide incredibly steady rates of return with low volatility.

Access To Equity/cash values

• Cash values accumulate over time and can be utilized through withdrawals, policy loans or leveraging. People who max out their RRSPs and need another place to grow tax sheltered money should look here!

Eliminates debt at an important time. 

• If you have debt, do your loved ones a huge favour and provide them with greater financial security by paying off your debt with life insurance proceeds when you’re gone.

Enhance And Equalize Your Estate

• Leave a legacy without liquidating investments or use it as a tool to provide cash to the heir that didn't get the cottage for example.

Continuity Of Your Business

• Provide a cash infusion to help provide your business and business partners the chance to grow and thrive in your absence. 

Want to know more? Contact us today and let us help you feel secure about your financial future.

Financial Care: Caring For Your Aging Parents

Financial Care: Caring For Your Aging Parents

As the population ages, many Canadians will soon find themselves caring for their parents or asking their adult children for help. For some the change comes about gradually, but for others the onus happens suddenly. 

A common area of concern for adult children who are starting to watch their parents’ age is helping them to manage their financial situation. Learning to cope and manage someone else’s financial house including investments, real estate, cash flow, estate preservation and tax planning can be difficult.

Even if you feel as though your parents are well enough to tend to their own finances, it never hurts to keep a watchful eye.

To help prepare you and your family for managing what's to come, we suggest taking these proactive steps.

Consolidate accounts – If your parents have multiple bank accounts, try to reduce the number of accounts and institutions. This will help both you and your parent(s) stay organized, and could help them to save money in banking fees.

Review statements-If they’re comfortable sharing their financial details, your parents might be able to set you up to receive copies of their statements. Doing this adds an additional level of oversight and will allow you to watch for signs of financial abuse. Make sure to watch for large transactions, unusual money transfers, and unrecognized fees/pre-authorized payments.

Prepare a financial data organizer- Use the organizer to note account numbers and the names of their advisers. You may also choose to include details pertaining to any life insurance policies, information on safety deposit boxes and where to find important legal documents or account passwords.

Your financial organizer should be reviewed annually to make sure everything is up-to-date and that it reflects any changes that have been made. You may also want to consider talking with your parents sooner rather than later to ensure that you have all of the [correct] information, before they start to forget.

Need extra help? Continuum II has put together a personal records organizer just for you. This is a great tool to help you organize your own personal financial plan, or that of a loved one. Find it here.

Review their estate plan-It is important to ensure that wills, powers of attorney, personal directives and similar documents are up-to-date before it is too late. Even if they appear in good standing, it is important to walk through what would actually happen with assets on death, as not everything will pass through the estate and be addressed by a will.

Keeping your eye on your parents estate plan can also help with future fees and tax implications. Even for the most modest estate taxes and probate fees can reach into the tens of thousands, so it's best to plan ahead and take all proactive measures to reduce possible fees.

How can we help? With our team of experienced financial advisors we can provide you and your parents with additional care to help ensure that all of your financial needs are in order. 

Strategically, we can help develop a plan based on each unique situation to map out how your parents may be able to live comfortably in their older years. Similarly, we can identify investment, tax or estate strategies to help preserve your parents’ wealth.

Don't forget to check out Lise Andreana's book "Financial Care for Your Aging Parent" covering key decisions every adult child of an aging parent must make to provide financial support in a loving way to the people who matter most.

Have questions? Contact us today, we are here to help.

"Will" Power

Many people, despite good intentions do not plan for their own death. Mark Goodfield reports to The Globe And Mail about his experience on the topic and why having an updated will is more important than one may think.

While, as Mark notes, no one wants to think about their own death, having a professionally reviewed, and updated, will is inevitably important and here is why. 

  

A will helps to protect your assets:

• Many assume their assets will automatically transfer to their spouse. However, unless the assets are held jointly with right of survivorship (except for Quebec), this will not be the case. If you pass away without a will, you are considered to have died intestate and the rules of your province of residence will determine how your estate is divided. As result, your assets may be distributed in a manner you did not anticipate or wish.

• Many families transfer assets haphazardly for income tax, asset protection and family law reasons. Where the assets are capital in nature, such as stocks or real estate, the transfer frequently creates an income-tax liability that is often blissfully ignored by the parent making the transfer. As a consequence, your estate and/or executor may become liable for the income tax not paid when those transfers were undertaken.

• Some people enter into handshake deals with lifelong friends in an attempt to avoid paying income tax, or to keep assets hidden away from spouses or certain family members. (Typically this relates to real estate). The obvious issue here is that you and/or your family are reliant on the honesty of your family friend to give back your share of the proceeds on the sale of the property.

While it can be expensive, hiring an expert to help build, and review, your will is worth every penny.

•  Legal and accounting advice can be expensive, so you may avoid getting it or hire a low-cost alternative. This is penny-wise and pound-foolish thinking. 

• Without proper advice, the estate can be left with a legal and income-tax mess and the professional fees to untangle everything often end up three to five times higher than it would have been had proper professional advice been obtained from the start.

In all, while the topic of death is never an easy one, it’s always better to be prepared. 

• Imagine how hard it is to file a return when someone has passed away and documents relating to share or real estate purchases have long since been destroyed. As your executor or accountant will not have documentation of the cost base of certain properties, your estate may end up paying excess income tax.

To read the full article, click here.

Need help reviewing your will (or getting started on one)? Call us today, it is never too late to start planning!