Estate Planning

What to do after selling your business

The contract is signed. The cheque is cashed. Your business has been sold or you’ve been given a golden handshake. Now what?

It’s a question many former company owners have a tough time answering. Whether you’re looking to sail around the world, start a new enterprise, or spend time with your family, you must now figure out what to do with your money—and with your life.

Here are 13 things business owners should do after leaving.

  • Relax

Shifting gears in a rush increases the likelihood of missteps, financial and otherwise. Take some time to reflect on what’s happened, and what’s to come. You don’t need to accomplish everything at once.

  • Define your goals

Do you want to spend time with family? Travel? Get involved in a charity or a community cause? Start a new business? Write it down.

 

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Is it Time for your Insurance Audit?

Has it been awhile since you last looked at your insurance portfolio? Are you a little sketchy in your recollection of all the coverage you have and why you have it? Are you uncertain as to whether or not your portfolio reflects your current situation? If this is the case, this might be the ideal time to have an audit of your insurance policies. Circumstances can change over time and making sure your protection keeps pace is a worthwhile exercise.


A comprehensive audit should review the following:

  • Is the total death benefit of your life insurance appropriate to your needs? A current capital needs analysis can help to determine this.
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Don’t Wait Too Long to Convert Your Term Insurance

If you require permanent life insurance coverage for family, estate planning, business, or tax planning purposes or you just wish to accumulate money in your life insurance program it may be time to look at a permanent, level cost solution.

Many of us purchase large amounts of low cost term insurance to cover our needs while we are raising our families or growing our businesses.  However, as the saying goes, “there is no free lunch”.  Eventually this low cost term insurance starts to become expensive and other options should be considered.  If you are unable to qualify for a new permanent insurance policy don’t worry, your safety net is the conversion option in your existing policy.

4 REASONS TO CONVERT YOUR COVERAGE

  • A change in your health you are no longer able to qualify for life insurance or you have received a sub-standard rating.  
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How to Prevent Family Cottage Feuds

By Brenda Spiering, Editor, BrighterLife.ca

We’ve all heard the horror stories – families torn apart by fighting over the inheritance of their family cottage. The place that used to bring them all together has suddenly become such a source of conflict it’s driving them apart.

Passing on the family cottage isn’t easy. Why? Because, for most, it isn’t just a piece of real estate. It’s a place filled with fond childhood memories of fishing and swimming and lying out under the stars on a warm summer night. But it takes more than charged emotions to cover the ongoing cost of maintenance and property taxes.

What’s the best way to pass on the family cottage? You need careful planning and a sound financial strategy that includes the following two steps:

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The Cascading Life Insurance Strategy

A Lifetime Gift for your Grandchildren

If you are a grandparent wishing to provide an asset for your grandchildren without compromising your own financial security you may want to consider an estate planning application known as “Cascading Life Insurance” that will generate:

• Tax deferred or tax free accumulation of wealth;
• Generational transfer of wealth with no income tax consequences;
• Avoidance of probate fees;
• Protection against claims of creditors;
• Providing a significant legacy.

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Estate Planning Tips for Real Estate Investors

For many Canadians the majority of their wealth is held in personally owned real estate. For most this will be limited to their principal residence however, investment in recreational and real estate investment property also form a substantial part of estates. Due to the nature of real estate, it is important to do estate planning to realize optimum gain and minimize tax implications.

 

Key Considerations for Real Estate Investment

  • Real estate is not a qualifying investment for the purposes of the Lifetime Capital Gains Exemption
  • Leaving taxable property to a spouse through a spousal rollover in the will defers the tax until the spouse sells the property or dies
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A Well-Structured Will

The Canadian income tax system is structured in such a way that taxpayers and their estates are often liable to pay significant taxes upon their death.

These taxes can represent a large proportion of the value of the deceased’s estate and can significantly reduce the amount of residual assets available for distribution to the estate’s beneficiaries.

Fortunately, the tax an estate will be subject to isn’t set in stone and with a properly structured will, a taxpayer can significantly reduce the taxes payable on their final income tax return (as well as the taxes payable by their estate subsequent to their death).

Leave assets to your spouse

A strategy used to reduce a taxpayer’s liability on a final tax return involves the drafting of a will that leaves assets to their spouse rather than other beneficiaries.

To read the rest of the article, click here.

©iStockphoto.com/Julie Hagan

 

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Reviewing Your Estate Plan

Whether your estate is large or modest, it is always a good idea to review your estate plan regularly to ensure that it continues to meet your objectives and keep up with any changes in your financial or family situation. If you do not have an estate plan, perhaps now is the time to consider implementing one as it is never too soon to start the planning process. The objective of an estate plan is the orderly distribution of one’s assets to intended beneficiaries with a minimum of taxes, expenses, and emotional turmoil.

The foundation of any estate plan is the Last Will and Testament. This is the document that instructs your executor how your estate is to be distributed and to whom. Unfortunately, you won’t be there to confirm or expand on those instructions, so an appropriate amount of thought and planning is required to get it right the first time. This article will provide you with an overview of what is required for an effective estate plan.

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Four Things You Need To Know About Inexpensive Term Insurance

The most basic form of insurance and the simplest to understand is Renewable and Convertible Term Insurance. Coverage is provided for a specified term, the policy renews automatically at the end each term period until the policy expires, most commonly at age 85. This plan has the lowest initial cost at entry, but don’t be mesmerized by the low cost because on renewal you will pay a substantial increase. If, however, you become uninsurable before the end of the term period you will have no other option but to renew or convert it to a permanent plan if you want to keep the coverage.

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How Much Risk Can You Tolerate? Part 3 of 3

Over the past two months we have examined some of the risks that challenge most of us. It is almost impossible to avoid risk entirely. Knowing where the pitfalls lie and planning for them will certainly help. You might, however, want to consider shifting the risk to someone else, like a life insurance company. Life insurance companies are in the risk business and they have products and services that can assist you in dealing with risk. Some of these are as follows:

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