A strategy to protect the value of your legacy

A permanent life insurance policy can provide your beneficiaries with the funds necessary to pay taxes owing upon your death.

The Preserve your wealth strategy is designed for individuals who:

• Have built-up significant wealth in capital assets
• Have a second property that has appreciated in value
• Want to keep a vacation home in the family
• Are worried about leaving their family with a large tax burden
• Want to leave their full estate to heirs or favourite charity
• Want to provide funding for final expenses, outstanding debts, legal fees and taxes

The situation

You have worked hard to achieve a degree of financial success. As each year passes and you become financially independent, you may think your need for life insurance decreases. However, the largest burden on your estate can be the taxes owing on assets upon your death. This may force the sale of some or all assets, perhaps below fair market value, in order to pay the tax. The family may be forced to sell a cottage or vacation property to pay the taxes owing on its increase in value. This can potentially reduce the legacy you will leave to your heirs or favourite charity. Would you like to know how to preserve your wealth to ensure the full value of your estate is received by your heirs or favourite charity?

The strategy

A permanent life insurance policy can provide your beneficiaries with the funds necessary to pay taxes owing upon your death. Life insurance can be a cost-effective strategy to provide funds exactly when they are needed. A tax-advantaged permanent life insurance policy allows for the accumulation of cash values inside the policy, within certain legislative limits and without paying income tax on growth. The death benefit is paid to your beneficiaries tax-free upon your death. With a named beneficiary other than the estate, you can eliminate probate fees on the death benefit (not applicable in Quebec). The Preserve your wealth strategy should be reviewed with your tax advisor and accountant to ensure the strategy is appropriate based on your needs.

The Preserve your wealth strategy offers:

• Permanent life insurance protection and client control of capital in a tax-advantaged insurance policy
• Potential for tax-advantaged accumulation that transfers tax-free to beneficiaries upon your death
• Funding to offset anticipated tax liability
• Flexibility to change the policy beneficiary, and coverage amount (subject to any underwriting requirements)
• The elimination of probate fees at death with a named beneficiary other than the estate (not applicable in Quebec) For more information about this and other estate planning material, contact your financial advisor!

All comments related to taxation are general in nature and are based on Canadian tax legislation, which is subject to change, and apply to Canadian residents. For the implications as they relate to individual circumstances, consult the appropriate legal, accounting or tax expert.