I WANT TO BUILD AN INVESTMENT PLAN FOR MY FAMILY...
An investment advisor has presented you with what appears to be a great investment opportunity.
Your accountant thinks it's not tax-efficient.
Your lawyer thinks it may be risky.
You have no idea how it will affect your estate.
Meanwhile, your small business is consuming all your free time, you've got neither the will nor the capacity to make a proper judgement call.
Don’t you wish you had a financial quarterback orchestrating all of this for you?
One of the biggest complaints we have heard in the financial planning sector from clients is the lack of a unified approach. To be quite frank, the ability to blend tax, financial planning and investment advisory into one integrated service offering is complex, difficult and hard to come by.
But that’s where we come in. Our partners, John Paul and Fabio, are definitely experienced CPAs but that’s not where it ends. Fabio’s also a registered investment and estate advisor, Certified Financial Planner, Chartered Investment Manager, certified tax specialist, and JP’s an experienced investment realtor.
Tax and financial planning are in our blood, it’s what we do.
Let’s take a look at the Adamson’s (name changed for confidentiality)
Mr. and mrs. adamson are both consultants who recently incorporated to carry out their business
- Both Mr. and Mrs. Adamson are in their mid-40s, non-smokers, in good health.
- The couple have two children, both teens, one child has a disability that will prevent him from working and caring for himself for the remainder of his life.
- They earn approximately $450,000 in gross revenue per year combined
- After taxes and personal lifestyle expenses they are able to save about $100,000 per year.
- The couple have 3, personally owned rental properties, which were purchased over 5 years ago.
- The couple has accumulated close to $1,000,000 in RRSPs and TFSAs through diligent savings over a 20-year period.
- They are invested primarily in big bank mutual funds and other big bank financial products.
Their concerns were as follows:
1. They are worried about being financially ready for retirement.
2. They worry about what their estate tax bill will be and how they can transfer their real estate to their son in a tax efficient manner.
3. They worry about their disabled son's future when they are no longer around to support him financially.
4. They do not understand their current investment portfolio at all.
5. They wanted to know the best and most tax efficient way to invest.
AFTer careful analysis we identified the following issues and opportunities creating the following solution:
- Structure a corporate owned life insurance policy to:
- Shelter corporate savings from tax and grow it by 5-6% per year.
- Draw a tax-free retirement supplement of $100,000 per year.
- Pay their estate a tax-free lump sum at death to cover anticipated estate taxes.
- Simplify their current investments into:
- Large-cap, market leading, dividend paying stocks.
- High-quality, international managed accounts with down-side protection
- Some high-quality fixed income to manage overall risk
- Incorporate a holding company to hold corporate investments/insurance policies and segregate those assets from potential creditors.
- Preparation of two wills to bypass probate on certain assets
Based on conservative projections we anticipated that the couple would comfortable achieve all of their financial goals, including:
- A projected retirement income of $300,000, $100,000 of which would be fully tax free.
- A smooth transfer of assets from one generation to the next.
- A substantial investment fund to provide for their disabled child.
But Don't Take Our Word For It!