Skip to content
family-business

The Corporate Estate Transfer

If you are the owner of a successful company it is likely that you have retained profits or surplus cash in your corporation.  If this is the case, chances are also good that this invested surplus is exposed to a high rate of corporate income tax.  If this describes your company then you may be a candidate for the Corporate Estate Transfer.  This strategy provides tax sheltered growth as well as maximizing the estate value of your company upon your death.

What is a Corporate Estate Transfer?

The Corporate Estate Transfer is an arrangement in which the company purchases a tax exempt life insurance policy on the life of the shareholder using corporate funds that are not needed for immediate business purposes. In doing so, the transferred surplus grows tax-deferred while the death benefit of the life insurance policy increases the value to the estate when the shareholder dies. Read more

iStock_000019839795Medium.jpg

Boomer + Sandwich Generation + Club Sandwich + Boomerang = Financial Instability

The Sandwich Generation was a term coined by Dorothy Miller in 1981 to describe adult children who were “sandwiched” between their aging parents and their own maturing children.  There is even a term for those of us who are in our 50’s or 60’s with elderly parents, adult children and grandchildren – the Club Sandwich.   More recently, the Boomerang Generation (the estimated 29% of adults ranging in ages 25 to 34, who live with their parents), are adding to the financial pressures as Boomers head into retirement. It is estimated that by 2026, 1 in 5 Canadians will be older than 65. This means fewer adults to both fund and provide for elder care.  Today, it is likely that the average married couple will have more living parents than they do children.

What are the challenges? Read more

iStock_000019063405_Small.jpg

Occasional Marijuana Users Get a Break

With the federal government heading towards the legalization of personal marijuana use some life insurance companies have announced that occasional marijuana smokers would now be considered as non-smokers on new applications for life insurance and in some cases critical illness insurance.

How significant is this change?  Substantial!

As an example, for a male age 35, the standard smoker premium for $500,000 of 20 year renewable term is $1,070*.  Now a recreational marijuana user can purchase that same coverage for 410 per year. *

Sun Life, BMO and Empire Life were the first three companies to make this change with Sun and Empire extending the offer to Critical Illness coverage as well.  Most insurance companies are expected to make similar announcements.  For some companies, medicinal marijuana users are excluded from the new offering but may be considered on a case by case basis. Read more

iStock_000013869419XSmall.jpg

The Single Premium Insured Annuity

Available until January 1, 2017

A New Approach

 A new method of structuring an insured annuity has restored its favourable results.  The new approach involves combining the prescribed annuity with a Universal Life policy.

  • The UL policy is funded with a single deposit to provide lifetime coverage.
  • The remaining capital is then used to purchase the prescribed life annuity.
  • On the death of the insured/annuitant, the annuity income ceases
  • The Universal Life policy now returns the full amount of the capital to the intended beneficiaries.

Read more

Group-Life-Insurance.jpg

Family Business Planning Strategies

67% are at Risk of Succession Failure

If you are an owner in a family enterprise, the chances of your business transitioning successfully to the next generations is not very good.  This has not changed over the years. Statistics show a failure rate of:

  • 67% of businesses fail to succeed into the second generation
  • 90% fail by the third generation

With 80% to 90% of all enterprises in North America being family owned, it is important to address the reasons why transition is difficult. Read more

Featured Articles

20
Nov
FLM-infographic.jpg

November is Financial Literacy Month

Worries about personal finances are at the top of the list when Canadians talk about their sources of stress. By clearly showing you where your money goes, a budget is a simple but powerful tool that can help you feel in control and protect you from unexpected financial surprises.

Take this Financial literacy self-assessment quiz to see how well you’re doing at staying on track.

Read more »

24
Oct
iStock_000031123740XSmall.jpg

Tackling the challenges of benefits provision for employees over age 65

by Kim Siddall

Increasing longevity, better health and the elimination of mandatory retirement means many Canadians are delaying their retirement past age 65, presenting employers with both advantages and challenges for managing benefits for this unexpected segment of their workforce.

Statistics Canada’s last census indicated that one in four Canadian seniors were still working in some capacity past the traditional age of retirement, whether driven by choice or economic necessity. This finding was echoed by Sun Life’s last Unretirement index last year, which pointed to a growing number of Canadians who fully expect to still be working full time at age 66. In fact, 2015 marked the first year in the seven years of the study that more respondents expected to be working full time at 66 than those who expected to be fully retired. Read more »

8
Sep
iStock_000016349157XSmall.jpg

Budgeting for University Life

If you  have a son or daughter, perhaps a niece or nephew heading off to university this month, here’s a great article to share with them from Practical Money Skills.

Making the transition from living at home where someone else buys groceries and pays essential bills to living on your own is a big step. How much can you afford to spend on groceries in a week? Are you going to need to work extra hours to pay for all of your books?

Create a Budget

This first step in financial planning will help you answer these questions and is absolutely essential in managing your personal finances. Read more »