Leave more for your children - and less for the CRA

When one of my clients, Shirley, age 64, came in to discuss her estate plans, she had one non-negotiable goal: her children would not lose a significant portion of their inheritance to taxes as she experienced with her parents’ estate.

Shirley has a solid pension and doesn’t rely heavily on her non-registered investments for day-to-day living. I knew right away that the Estate Bond strategy could meet her goal.

The Estate Bond moves unused, taxable assets into a tax-deferred whole life insurance policy – growing her estate while reducing her tax burden today.

Shirley could comfortably direct $20,000 per year toward premiums over 20 years.

Her question to me was: “But what about the return I could get if I kept the annual $20K invested?” 

A fair one — so I ran the numbers for her at various ages:

Even at age 90, the Estate Bond outperforms by close to $60,000.

It also provides Shirley with benefits that a balanced portfolio simply can’t offer:

•        Provides accessible funds for Shirley while she is alive – if needed

•        Reduces taxes owed while Shirley is still alive

•        Estate value grows through tax-deferred cash accumulation

•        Tax-free death benefits paid directly to her children

•        Helps cover estate settlement costs at death

If you are in the ‘enjoying’ stage of life, you may be thinking about your estate planning just like my client, Shirley. If you want to leave more for your children and less for the CRA, the estate bond strategy make be a good fit for you and your family.

[This strategy may not work for everyone. Calculations are for illustration purposes only and will vary according to people’s age, timeline, premiums, and other financial circumstances. Client name has been changed for privacy reasons.]