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Private Corporations in the Cross Hairs

If you are the owner of a private corporation you should be concerned about the commentary that is coming from the Department of Finance.  In the Federal Budget of March 2017, Finance expressed their concern that private corporations were being used by high income Canadians to obtain tax advantages that were not available to other Canadian tax payers.  That concern has led to the release on July 18th 2017, of a consultation paper along with draft legislation.  Finance is currently asking for input from interested parties and stakeholders and has stated that the consultation period will end on October 2, 2017.  At this point, whatever happens after that date is anyone’s guess, but speculation is high that changes will be introduced to close what the Department perceives as abusive practices relating to private corporations.

Specifically, there are three specific tax planning strategies employed by private corporations that the department is most concerned with: Read more

Charitable Gifting with Shared Ownership Universal Life Insurance

Many individuals have realized their charitable aspirations by donating a life insurance policy to the charity of their choice.  In situations where that donation is a Universal Life policy, the use of a Shared Ownership strategy could prove to be a viable investment for the donor.

Shared Ownership refers to an arrangement involving cash value life insurance policies such as Universal Life.  Universal Life combines life insurance with an investment fund which grows tax deferred until the cash value is withdrawn.  If the cash value is paid out at death, the growth is tax free.

Under Shared Ownership, the life insurance and the cash value would have different owners and beneficiaries and would be structured as follows: Read more

Preparing your Heirs for Wealth

If you think your heirs are not quite old enough or prepared enough to discuss the wealth they will inherit on your death, you’re not alone. Unfortunately though, this way of thinking can leave your beneficiaries in a decision-making vacuum: an unnecessary predicament which can be avoided by facing your own mortality and making a plan.

If you have a will in place, great. A will, however, is only a fundamental first step, not a comprehensive plan, point out authors of the 2017 Wealth Transfer Report from RBC Wealth Management.

“One generation’s success at building wealth does not ensure the next generation’s ability to manage wealth responsibly, or provide effective stewardship for the future,” they write. “Knowing the value (alone) does little to prepare inheritors for managing the considerable responsibilities of wealth.” Overall, the report’s authors say the number of inheritors who’ve been prepared hovers at just one in three. Read more

The Duties of an Executor

An executor is an individual or institution that is named in a will whose duty is to distribute estate assets according to the testator’s wishes. Acting as an executor can be stressful and time consuming so it is a good idea for a testator to make his or her choice wisely, and for someone who is asked to be an executor to investigate and review exactly what the job entails.  Often the executor is the spouse of the deceased. That tends to make the role somewhat more straightforward than it would be for a family member, friend or other acquaintance. In any event, this article covers the duties and obligations of an executor.

Arranging the funeral 

In addition to arranging the burial or cremation and funeral services according to the deceased’s wishes the executor would be responsible in ensuring that family, friends and interested parties (especially employer) have been notified about the death.  Family members will most likely assist in this including the posting of the obituary. If there are sufficient funds in the bank account of the deceased the bank will usually release  funds to cover the cost of the funeral. Read more

Better Safe than Sorry!

DID YOU KNOW?

  • It has been estimated that about 1/3 of travelling Canadians leave the country with absolutely no medical coverage; 
  • This is dangerous in that statistics show that 21 % of travellers will require medical attention – 40% of these will not have coverage; 
  • Provincial health plans cover only about 9 %  of out-of-country medical expenses; 
  • The average out-of-pocket cost per hospital stay in the U.S. is over $15,000 with some expenses being as high as $100,000 or more; 
  • Even travel in Canada can result in out-of- pocket costs for medical treatment due to the differences between provincial plans; 
  • Some countries (such as Cuba) and many cruise ships require proof of travel insurance. Read more

ARTICLES OF INTEREST

16
Sep

Credit 101 for Your Undergraduate

By Melissa Cassar, VISA Canada

If you’ve got teenagers heading off to University or College in the Fall, I hope you’ve done a good job educating them about the importance of personal financial responsibility and how to build a strong credit history. If not, better do it now.

First year students and young adults entering the workforce encounter many unfamiliar expenses – and temptations – so it’s important to help them avoid early financial missteps that could damage their credit for years to come.

Probably the most fundamental tool for helping students manage their finances is a chequing account with a debit card. A few tips: Read more »

16
Aug

How to Keep the Family Business Thriving For Generations to Come

Most corporate dynasties fail to make it to a second generation, making these Canadian firms thriving under the leadership of the founder’s grandkids (and great-grandkids!) truly remarkable

Izzy Asper never wanted his children to work at Canwest Global Communications, the now defunct media empire he founded. His drive and hunger for acquisitions turned Canwest into one of the most powerful firms in Canada and, for a time, earned the Aspers a spot on the Rich 100. He wanted his kids to succeed elsewhere, however.

“They were all practising lawyers and were doing very nicely on their own. It was they who got this dynastic glaze in their eyes—which I generally discouraged,” he told journalist Peter C. Newman. “I don’t believe in dynasties.” But his daughter, Gail, “slipped through the net” to become general counsel at Canwest, and brothers David and Leonard followed. It was under Leonard’s stewardship that Canwest filed for bankruptcy in 2009. Read more »

18
Jul

Microsoft Corp. is launching a new family caregiver benefit for all employees.

To date, the benefit has rolled out in 22 countries, including in the United States last week. The company will extend the benefit to the remaining countries where it operates, including Canada, over the coming months.

The family caregiver leave allows an employee to take up to four week of fully paid leave to care for an immediate family member with a serious health condition, wrote Kathleen Hogan, executive vice-president of human resources at Microsoft, on her LinkedIn page. Read more »