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ARTICLES OF INTEREST

19
May

Estate Planning Tips for Real Estate Investors

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 forms a substantial part of some estates. Due to the nature of real estate, it is important to utilize 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).

Read more »

15
May

May Report from DM

Managing Energy Exposure in a Volatile Environment

As the oil price drop accelerated last fall, we began to think about the other side of the decline and how we might best position our energy exposure for an eventual recovery. To help guide this effort, the DM equity team built a “road map” of criteria that would signal a possible turn in conditions……

Click here to read more – DM-Monthly-Report-May-15

15
May

Shield Insurance Proceeds from U.S. Estate Tax

Life insurance can play an important role in estate planning. But complexities arise for those subject to U.S. estate tax.

While life insurance proceeds are generally not taxable in the hands of a beneficiary, U.S. law includes the value of life insurance in the gross estate of the deceased if he or she owned the policy. Factors used to determine ownership include who can cancel or make changes to the policy’s terms, who is paying the premiums, and who can leverage the policy for investment purposes.

If a client has life insurance in her taxable estate, it can mean paying U.S. estate tax when none would otherwise be due. Consider an example of an unmarried U.S. citizen with a net worth of $5 million in real estate and investments. If that person were to add a $1-million life insurance policy, its inclusion in the gross estate would push the estate’s value beyond the current exclusion amount, and result in approximately $264,000 in tax. Here’s why, and what you can do about it.

Click here to read the rest of the article on Advisor.ca

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7
May

Stay Safe this Summer

By Anna Sharratt, BrighterLife.ca

David Banerjee got a big lesson in water safety when he was seven. On his first canoe trip with his father in Muskoka, ON, the canoe capsized, tossing both of them into deep water.

“I dog-paddled towards shore, and I assumed that my father knew how to swim because he was, after all, my father, and capable of anything,” says Banerjee, a Toronto teacher. “But my father had never had the opportunity to learn to swim properly.”

Fortunately, his dad was wearing a lifejacket, albeit an old one that barely supported his weight. Through sheer luck and the help of passing boaters, the pair was rescued.

“To the best of my knowledge, my father has never set foot in a canoe since,” says Banerjee.

Accidents like that occur all the time — sometimes with dire outcomes. Each year, more than 160 Canadians drown while boating, according to the Red Cross. But, as in this case, the simple act of wearing a lifejacket can help prevent a tragedy — as can a change in attitudes, says Shannon Scully-Pratt, water safety program representative at the Red Cross in Central Ontario. To begin with, she says, adults need to apply rules they enforce with their children to themselves. That means wearing lifejackets or personal flotation devices (PFDs) when boating or using pleasure craft. Taking steps to be safe in the heat through careful food storage and not taking chances in overheated vehicles are other ways to reduce risk.

Be safe around water

  • Teach kids about water safety. “Have your child ask permission to go in or near the water,” says Scully-Pratt. “Or tell children they can only go in if an adult is around. Guide them to make wise water decisions.”
  • Protect kids around water. Popping water wings on young children and heading off to relax on the cottage deck isn’t a good idea, says Scully-Pratt. Instead, have your child don a lifejacket or PFD if playing alongside or heading into the water. She suggests choosing red, yellow or orange personal flotation devices for young kids so that if they do fall into the water, they can be seen easily. And always keep within arm’s reach of a child near water.
  • Know the water. Water conditions can change year to year. Even if you think you’re familiar with the lake at your cottage, always check it first to ensure that water levels haven’t dropped, rocks haven’t been dislodged or debris such as fallen trees hasn’t appeared suddenly below the surface.
  • When boating, take precautions. Always have one lifejacket for every person in the boat, says Scully-Pratt — it’s the law. And be aware of weather changes. At the first sign of a looming storm, head for the shore directly. “Don’t wait until the storm hits,” she says, when getting to land safely may become difficult. As well, make others aware of your destination if you’re heading off in a boat. “Letting someone know where you’re going and how long you’ll be out can help to narrow down the possibilities, should the unpredictable occur,” says Lewis Smith, communications and media program co-ordinator at the Canada Safety Council in Ottawa.

Keep the heat at bay

  • Don’t leave kids or pets alone in your car. “Often, people are aware that cars can heat up quickly, but what they fail to realize is exactly how quickly that can happen,” says Smith. For example, the Canada Safety Council says that on a day of 35°C, a car exposed to the sun can hit temperatures as high as 50° C within 20 minutes. Smith says parents should never leave anyone in the car, even if they’re dashing into the corner store. Three minutes can easily become 20 minutes.
  • Protect your food. If you’re planning a picnic, hike or outdoor meal, ensure that your food is kept as cool as possible, or consumed quickly. Illness-causing bacteria such as salmonella can flourish when temperatures rise, so make sure to store meat or dairy-containing foods in coolers, insulated bags or on ice, or eat them quickly. (Find out more about summer food safety from Health Canada.)
  • Don’t ignore the sun. While sunburn can be a big concern — especially for your kids — beat stroke can be even more deadly. A condition brought on by high temperatures and too much sun exposure, it can cause nausea, dizziness, extreme thirst and headache, or worse. Wear a hat, stay in the shade as much as possible, drink lots of water and head to a cool place like a pool, mall or library if you don’t have air conditioning at home.

For more smart tips, read:

Original Source: Stay Safe This Summer, By Anna Sharratt, BrighterLife.ca

©Sun Life Assurance Company of Canada, 2015
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