The total net value of your estate represents what you will leave to your family when you die. It may include the following:
- Your residence;
- Cottage or other recreational property;
- Investment real estate;
- Stocks, bonds, mutual funds and commodities
- Life insurance;
- Any other assets you wish to leave to your heirs.
After paying off any liabilities, taxes arising at death, last expenses etc., what is left over is what your family will use to maintain the lifestyle that you created for them.
Two easy ways to make sure debt and investment losses do not impact the estate you leave for your family Read more
Life insurance is used for two general purposes in a private corporation – managing risk and creating opportunities. The risk management function is satisfied as life insurance provides the corporation with a tax-free payment in the event of the death of an owner or someone vital to the success of the business. As life insurance also allows for the tax-sheltered build up of cash value additional planning opportunities are additionally created.
The primary needs for corporate owned life insurance to satisfy the risk management purpose are as follows:
Key Person Life Insurance
Any prudent business would insure its company facilities and equipment that is used in creating revenue. It follows then that the business should also insure the lives of the people that run the company and make the decisions which contribute to its profit. Any owner, manager or employee whose death would impair the future growth and success of the company is a key person and should be insured as such. Read more
Without a doubt, life insurance is valuable protection provided by your employee benefit plan, but should it be the only life insurance coverage you have? Probably not, if you want to ensure you have sufficient long term protection to cover all your family’s financial needs should you die unexpectedly.
In a recent study conducted by the Life Insurance and Market Research Association (LIMRA), it was reported that 61% of Canadians hold some form of life insurance. Surprisingly, it also revealed that only 38% of Canadians own an individual life insurance contract. This means that almost 40% rely solely on the life insurance provided by their employer. This can be problematic. The disadvantages of having your employee benefit plan as your only life insurance protection include the following:
It is probably not enough to pay off your mortgage and/or provide income for your spouse and family.
The amount of life insurance protection provided by group insurance in most cases is equal to only one or two times annual income. If this is not enough to do the job, the addition of individual life insurance should be considered. Read more
If you are an active investor, your investment holdings probably include many different asset classes. For many investors, diversification is a very important part of the wealth accumulation process to help manage risk and reduce volatility. Your investment portfolio might include stocks, bonds, equity funds, real estate and commodities. All these investment assets share a common characteristic – their yield is exposed to tax. From a taxation standpoint, investment assets fall into the following categories:
The income from these investments are taxed at the top rates. They include bonds, certificates of deposits, savings accounts, rents etc. Depending on the province, these investments may be taxed at rates of approximately 50% or more. (For example, Alberta 48.0%, BC 49.8%, Manitoba 50.4%, Ontario 53.53%, Nova Scotia 54.0%). Read more