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Taxation of Life Insurance – New Rules Create New Opportunities – March 2014

In August the Department of Finance published their changes to the taxation of life insurance as previewed in March 2013 Federal Budget.  When final legislation is passed later this year, these changes will result in an updating to the “exempt test” which determines how much tax-deferred value can accumulate in a life insurance policy before it is subject to accrual taxation.  The new rules take effect and will apply to policies issued January 1, 2016 and later.

Highlights of the new rules and their affect


For Cash Value Life Insurance:

  • Effective with policies issued after 2015 the new rules will reduce the ability to tax-shelter accumulating cash values;

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What Are Segregated Funds & Are They Right For Me? – February 2014

The world of investment choices can be confusing. Do you sacrifice security for higher returns? Or do you take the safe path and take the guaranteed route, locking yourself into low returns? Fortunately for Canadian investors there is another option: Segregated funds.

What are Segregated Funds?

Segregated funds are similar to mutual funds but are only offered by life insurance companies. This allows for the special “insurance” features that can make segregated funds a safer investment and provide added advantages.

Like mutual funds, segregated funds have a wide range of investment choices: Read more


Critical Illness for Juveniles – January 2014

Many people recognize the need for Critical Illness insurance to protect them from the financial risk that could result if diagnosed with a life threatening illness. Although a difficult subject to think about, children should also be protected from this risk as well. If our children were to become ill the emotional and financial toll it could have on the family may equal that of the parent. Read more


Year-end Tax Planning – December 2013

While you are busy with your year-end tasks and planning your holiday merrymaking, you should also include a little tax planning. There are receipts to find and records to review – not just for the upcoming tax season but for the year ahead.

Take a moment to review the following list of important items and important deadlines:
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Estate Planning Tips for Real Estate Investors – November 2013

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
  • Apart from the principal residence, real estate often creates a need for liquidity due to capital gains, estate equalization, mortgage repayment or other considerations
  • Professional advice is often required to select the most advantageous ownership structure (i.e., personal, trust, holding company).

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A Creative Way of Funding Long Term Care – October 2013

Will your family be affected by the costs of caring for an aging loved one?

Statistics Canada states over 350,000 Canadians 65 or older and 30% of those older than 85 will reside in long term care facilities. With increasing poor health and decreased return on investments, the fear of facing financial instability in your declining years is real.

How will this impact your family?

Caring for an aging parent or spouse takes its toll emotionally and financially. Adult children with families and job pressures of their own are often torn between their obligations to their parents, children and careers. This often results in three generations feeling the impact of this care. Read more

« 'Nothing great was ever achieved without enthusiasm.' ~ Ralph Waldo Emerson »     ...     « 'Strive not to be a success, but rather of value.' - Albert Einstein »     ...     « 'Faith is taking the first step, even when you can't see the whole staircase.' ~ Martin Luther King »     ...     « 'Today's preparation determines tomorrow's achievement.' ~ Unknown »     ...     « 'Press on, nothing in the world can take the place of persistence.' ~ Ray Kroc »     ...     « 'Patience is the companion of wisdom' - Saint Augustine »     ...     « 'Learn from yesterday, live for today, hope for tomorrow. The important thing is not to stop questioning.' ~ Albert Einstein »     ...     « 'The question isn't at what age I want to retire, it's at what income.' ~George Foreman »     ...     « 'Nothing great was ever achieved without enthusiasm.' ~ Ralph Waldo Emerson »     ...     « 'The last of human freedoms is to choose one's attitude in any given set of circumstances.' - Viktor Frankl »     ...     « 'The last of human freedoms is to choose one's attitude in any given set of circumstances.' - Viktor Frankl »     ...     « 'Some people dream of success... while others wake up and work hard at it.' -Author Unknown »     ...     « 'You can succeed best and quickest by helping others to succeed.' - Napoleon Hill »     ...     « Hold yourself responsible for a higher standard than anybody else expects of you. - Henry Ward Beecher »     ...     « 'We are made strong by the difficulties we face, not by those we evade.' - Anonymous »     ...     « 'Remember, happiness doesn't depend upon who you are or what you have; it depends solely upon what you think.' - Dale Carnegie »     ...     « 'You may never know what results come from your action. But if you do nothing, there will be no result.' – Mahatma Gandhi »     ...     « 'Do you value life? Then waste not time, for that is the stuff of which life is made.' - Benjamin Franklin »     ...     « 'Life is simple but we insist on making it complicated.' – Confucius »     ...     « 'Our mortality gives life a sense of urgency' - John Izzo »     ...     « 'The question isn't at what age I want to retire, it's at what income.' ~George Foreman »     ...     « 'Either you run the day or the day runs you.' – Jim Rohn »     ...     « 'Life is the sum of all your choices' - Albert Camus »     ...     « “I’m more concerned about the return of my money than with the return on my money” – Will Rogers »     ...     « 'Most people are so busy knocking themselves out trying to do everything they think they should do, they never get around to do what they want to do.' – Kathleen Winsor »     ...     « 'Man must go back to nature for information.' – Thomas Paine »     ...     « 'When you have brought up kids, there are memories you store directly in your tear ducts.' – Robert Brault »     ...     « 'Challenges make life interesting, however, overcoming them is what makes life meaningful'. – Mark Twain »     ...     « 'Fear eats away love!' – Author Unknown »     ...     « 'Adolescence is perhaps nature’s way of preparing parents to welcome the empty nest.' – Karen Savage and Patricia Adams, The Good Stepmother »     ...     « ' You are as young as your faith, as old as your doubt; as young as your self-confidence, as old as your fear; as young as your hope, as old as your despair.' – Douglas MacArthur »     ...     « 'All truths are easy to understand once they are discovered; the point is to discover them.' – Galileo »



Emergency Travel Medical Insurance

Emergency travel medical insurance is included in most group benefit plans.  This travel benefit under the Extended Health Care plan covers employees and their eligible family members for medical emergencies while outside their home province for a duration of time as outlined in their group contract – usually from 60 to 180 days. For the majority of travel situations, this coverage is ample to cover off any unforeseen medical issues.

Emergency Services covered under the plan include:

  • All services and supplies while in hospital
  • Outpatient and physician services
  • Ground ambulance service to the nearest hospital
  • Transportation to the employee’s home province for medical treatment, as appropriate Read more »

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.

© Hagan