Optimal Estate Planning

March 26, 2015 Uncategorised

A typical traditional estate plan results in the following:

  1. Too much tax being paid
  2. Asset liquidation in order to pay these taxes
  3. Confusion and disorientation of beneficiaries (and remaining spouse)
  4. Regret and unnecessary asset loss

How can it be the most beneficial and predictable strategies that exist for tax sheltering and asset protection remain a mystery to many affluent families?

Estate taxation is complex and requires dedication to fully understand. Nevertheless, this specialized area permits strategies and approaches that are non-traditional and extremely beneficial for estate protection and enhancement.

ICON coordinates a team of experts who custom design and implement the strategies required to protect our clients’ estates and give them the peace of mind they seek.

Our strategies are focused on tax efficient retirement income and estate protection and enhancement.

Too often, the most beneficial and advantageous tax planning strategies are overlooked because of the stigma attached to the section of the tax act they are found in – insurance tax law. It is for this reason that the most lucrative transactions have been, for the most part, left unchanged by Canada Revenue Agency (CRA).

Recently, one of Canada’s wealthiest individuals passed away and the largest death benefit in Canadian insurance history was paid to his estate. Ted Rogers had amassed billions of dollars in assets. This success required significant liquidity for funding estate taxes and was facilitated through a properly structured estate plan funded by life insurance contracts – his heirs were fully protected

Ted Rogers was well informed and very aware of all the estate planning options he had at his discretion. The options he acted upon protected his financial legacy for future generations.

His decision to buy as much insurance as he did was based on looking at the transaction in the same manner that he used to amass billions – he didn’t let the stigma attached to insurance transactions get in the way of making a prudent and wise business decision.

Corporate

In a corporate environment, properly structured, there are transactions that could provide:

  • tax free personal retirement income from the corporation
  • guaranteed rates of return far in excess of current fixed income vehicles
  • a tax free conversion of retained earnings to a personal asset to pay personal estate taxes
  • an after tax return on retained earnings not required for retirement income in excess of 12%
  • a conduit for tax free corporate income to flow to the estate with no out of pocket expense

Regardless of age, many of the above referenced transactions can be custom designed so that anyone in average health can realize significant benefits.

Personal

If properly structured, there are transactions that could provide:

  • a tax sheltered account which, unlike an RSP has no contribution limits (within reason)
  • tax free personal retirement income from the tax sheltered account
  • increased retirement income via an estate replenishment transaction
  • tax free transfer of assets that are protected from all estate taxes

Regardless of age, many of the above referenced transactions can be custom designed so that anyone in average health can realize significant benefits.

Let’s face it, you have wrestled with CRA all your life to keep as much of your money as you can – how do you know your estate plan is current and protected?

Our experience is that, most of the time, people are not properly advised, and excess estate taxes are being paid. Typically, the funding of estate tax is not properly structured or worse yet, doesn’t even exist.