The more you have — the more you have to lose.
After spending so much time, energy and resources building your business and wealth, you need to preserve it and pass it along to the next generation.
Have you considered the impact that taxes will have on the value of your estate when you pass away? What type of taxes could your estate be subject to: income tax, capital gains tax, probate tax, others? Will your estate need to liquidate assets to fund tax liabilities upon your death? Without proper planning, taxes can consume a significant portion of your estate capital.
Estate planning is a complex and emotional process with major financial consequences. There are numerous issues to consider and advanced planning is essential. Assisting our clients with the funding solutions and product recommendations is a core area of expertise at Integrated Financial Strategies.
Permanent life insurance plays a central role in the estate planning process because it protects and enhances the value of your estate.
Permanent life insurance has many estate planning uses, the most important being its ability to transfers risk away from the estate. This provides peace of mind while at the same time outperforming other alternative methods in terms of financial cost.
- Guaranteed tax-free death benefit at the time when it is needed most.
- Maximizes the value of your estate.
- Provides a tax-efficient source of retirement income.
- Inter-generational transfer of wealth in a tax efficient manner.
- Tax-preferred investment growth.
- Estate equalization.
- Minimization of estate settlement costs such as probate fees.
Estate planning is not a static process. It is a dynamic process that should be reviewed and updated on a regular basis to ensure your goals and objectives are still being met. Changes in your personal and/or business situation should prompt you to revisit your estate plan. Find out more about Estate Planning by clicking on the topics below.
- Have you calculated the tax liabilities that your estate will be responsible for at your death? Have you identified if your business shares are eligible for the lifetime capital gains exemption? Could they be made eligible?
- Do you have a will and a power of attorney? When was the last time they were reviewed and updated?
- Do you own assets in another country? What strategies are there to reduce tax payable, if any, in that country?
- Have you appointed a successor or established a process for selecting a successor for your business? If you are leaving the business to one family member, what arrangements have been made to leave assets of equal value to other family members?
- Does your family know the details of your estate plan? Have you informed a family member where key documents such as your will and insurance policies are located?
Examples of changes in your circumstances include:
- Change in Personal Circumstances – major life events like marriage, divorce, illness/sickness, birth of a child, death of a family member, inheritance.
- Change in Business Circumstances – major business events like the sale of a business, estate freeze, death of a shareholder, review and/or update to your shareholders agreement, corporate reorganization.
I have been working with Integrated Financial Strategies (IFS) since 2005 for my insurance portfolio planning. In late 2020, IFS worked with my legal & accounting advisors to develop and implement a comprehensive life insurance solution to provide liquidity for my estate to fund tax liabilities. The planning was thorough, efficient, and done in a professional manner. I am grateful to the IFS team for raising the issue and diligently assisting to execute the solution.