An Estate Planning Alternative Other Than Life Insurance

According to The Globe and Mail, Ontario ranks third as the most affluent province in Canada behind Alberta and the new leader Vancouver. Though income lowered across the country between 2008 and 2009, these three provinces were able to better hold onto their wealth. With so many wanting to maintain their wealth into the next generation, there is an increasing need for estate planning solutions.

As each year passes, it gets harder to hold onto the money you already have as the rich really do get richer and most Canadians’ income stagnates. Many think as their wealth increases their need for life insurance decreases.

However, the largest burden on their estate can be the taxes they owe upon their death. This may force the sale of all of their assets, perhaps below fair market value, in order to pay the tax. Their family may be forced to sell a cottage or a vacation property to pay the taxes owing on those assets increasing value. This can potentially reduce their legacy and limit the amount of cash left for their heirs or their favourite charity.

Life insurance is one way to offset these taxes. Without life insurance, the other options include:

1. Save. You can try and accumulate enough liquid assets to leave in the estate to pay taxes the owing.  But those assets also attract taxes now and potentially at death.

2. Sell assets. The estate can sell assets to pay the tax liability.

3. The estate can borrow against the value of the assets in the estate to pay the tax liability.

For more details on estate planning solutions, please contact us at 1-866-899-4849 or visit our Whole Life Instant Quote Page.

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  • Louella
    April 30, 2013 at 9:10 pm

    Can my policy “heir” be a charitable organization and can I give direction on how this money is to spent? Looking forward to your response, L.