This document is probably the most important one you could ever fill out. It’s the first step to planning a secure future. Click the image to download now.
As COVID-19 transmissions increase, extraordinary and escalating measures (and unexpected impacts) are now rapidly coming into effect across all levels of society, business, industry, and leisure, in Canada and worldwide.
While the Public Health Agency of Canada is still assessing the public health risk associated with COVID-19 as low for Canada for now, new developments related to the spread of the coronavirus worldwide and in Canada, beyond the rapid increase in the number of infections, include:
- additional restriction on all non-essential travel by many organizations (including Sun Life, Manulife, PwC)
- the cancellation of numerous events in all sectors of the economy
- the recommendation by the Canadian Public Health Agency, some provincial governments and health agencies/chief medical officers of health to:
- restrict out-of-province and out-of-country travel
- self-isolate for two weeks after out-of-country travel, and
- cancel large indoor events over 250 people (Canada, Ontario, Quebec and Alberta to date)
- Parliament has adjourned until April 20 and the federal Budget scheduled for March 30 has been postpone).
Almost all insurance companies have initiated changes to work practices – including remote work wherever appropriate, postponing conferences and educational events, restricting meetings or gatherings of more than 25 people, and encouraging the use of virtual technologies to ensure business is moving as usual.
As you may know, I am currently on the Board of Directors for CALU, the Conference for Advanced Life Underwriting, which represents the interests of the financial and insurance planning community to Members of Parliament and officials of key federal government departments, in particular, Canada Revenue Agency and the Department of Finance. We have decided to cancel the 2020 Annual General Meeting planned for Ottawa May 3-6 in an effort to reduce the spread of COVID-19.
For more information about COVID-19 impacts in Canada, you are encouraged to visit the following sites: The Public Health Agency of Canada; Infection Prevention and Control Canada and the WHO. You may also find of interest this article by our 2020 CALU AGM speaker and health columnist with The Globe and Mail, André Picard.
Our office is well equipped to continue working on your behalf. My staff will be working remotely from home until further notice. We will also be postponing any face-to-face appointments for the next two weeks.
As a reminder, let’s stay healthy and do our part to limit the spread of COVID-19 by following the recommended precautions when out in public places. If you have travelled outside of Canada, please self-isolate for at least 14 days from the day you arrived back. If you feel sick, please stay home. If you have an underlying health condition or feel you are in an at risk population, please stay home. Here is an infographic to print and post in your offices as a visual prompt.
These are complicated times, things are changing quickly and we’re committed to keeping you informed.
Cindy David, CFP, CLU, FEA, TEP
President & Estate Planning Advisor
Cindy David Financial Group Ltd.
Read the full report here.
The coronavirus Covid-19 presents the global economy with its greatest danger since the financial crisis, according to the OECD’s latest Interim Economic Outlook.
Covid-19 is spreading from China to other regions causing human suffering and economic disruption. It is raising health concerns and the risk of wider restrictions on the movement of people, goods and services, falls in business and consumer confidence and slowing production.
The Interim Outlook presents both a best-case scenario in which the extent of the coronavirus is broadly contained and a “domino” prospect of contagion that is more widespread.
In both cases, the OECD calls on governments to act immediately to limit the spread of the coronavirus, protect people and businesses from its effects and shore up demand in the economy.
Map created by John Hopkins University.
An equal world is an enabled world.
With 30 years of experience, I’ve kept looking for ways to grow my voice and my platform so other women can join me in the world of entrepreneurship. The success of other women I mentor (two of whom have gone on to launch successful businesses here in Vancouver) inspires me to keep climbing higher.
My vision statement, that grounds me and reminds me what I’m aiming for, is:
My goal is to lead people who are passionate, skilled, and looking for more. Together, we will transform the landscape of finance. I want to show that people who work hard, and who are passionate and smart, are fit to be leaders, no matter what.
Competition is healthy, especially when it makes you level up, re-focus, and find a new way to guide yourself to success.
Reliability. We all know what it means. But how do you ensure your team builds reliability into their ethos? I have one trick I always use…
Trust is so key in my industry, and building it has been essential to the success of my business. How do you get to trustworthy with your clients, especially in financial services?
As a professional woman in finance, I’m defined by the word “driven” and I believe it’s helped me build my brand. I’m driven to provide trust, reliability, and competence to my clients. What is the one word that describes you when it comes to your #career or #business?
In the Spring of 2017, we blogged about the use of Alter Ego and Joint Partner trusts (‘Trust(s)”) for those over 65 as excellent estate planning tools. We mentioned that benefits range from probate savings to protection from wills variation litigation. A recent BC Supreme Court Decision has confirmed that when properly constructed and executed, Trusts are a strong defence against family litigation claims.
However, before we get to the decision, it may be useful to quickly summarize the benefits of a Trust.
Benefits of a Trust
There are 4 primary benefits:
Privacy – a Trust is a private document, whereas a will is a public document.
Probate fees – savings on probate fees of $14 of tax for each $1,000 of value. $10M of value saves $140K in probate fees. This can pay for a lot of legal and trustee fees.
Tax treatment – The transfer of assets to this type of Trust is tax deferred and any gain in their fair market value is deferred until death (Alter ego) or second to die (Joint Partner).
Litigation risk – Protection against family and other disputes. Done properly, there is nothing to argue about with regards to your will as you are – sarcastically – NSF. The Trust owns everything of value and your will has at best, your personal effects.
The case of Al Soucie
Al, a widower passed away in 2013 at the age of 78 with a significant estate. He and his wife raised three children in BC’s interior. Al also had a daughter from another relationship, Shirley. Shirley didn’t find out that Al was her dad until she was an adult, and even after, Al and Shirley were not close.
Al didn’t want any fights between his children. So, shortly after his wife’s death he engaged a seasoned trust and estate lawyer, Geoffrey White of Kelowna, to help him plan his affairs.
Geoffrey, through extensive discussions with Al and in-depth analysis of Al’s assets concluded that a Trust would best suit his needs. In effect, Al would transfer his assets to a Trust that Al would control throughout his life. On his demise, the Trust would contain provisions for the three children he raised. There would be no provision for Shirley.
Documents were drafted that included the Trust, bare trust agreements for land transferred to the Trust, etc. and then executed on October 18, 2018.
Al passed away 4 days later on his way to a long-planned vacation with a close friend. The three children soon engaged lawyers to deal with their father’s estate and the Trust. Shirley was not part of this process.
When Shirley found out about her father’s death, she ultimately commenced litigation to get Al’s will varied and to secure what she believed she was entitled to.
After a 9-day trial the judge concluded that Al had effectively transferred his assets to the Trust and the Trust and its terms were valid. Left in his estate was app. $6,000 in CPP, WCB and IOUC death benefits. Al passed away NSF – there was nothing for Shirley to argue about.
Where can it all go wrong?
A Trust can minimize litigation risk, but for the Trust to work as intended, the trustee(s) must take steps ensuring it is administered properly. As an example:
- Time to mature – Al’s Trust only had the benefit of 4 days. In our view, it’s best to have a Trust in place for several years.
- Have a separate bank account for the Trust – often a Trust account is set up and then ignored. Don’t use a personal bank account to deposit funds and pay bills ignoring the Trust’s account.
- Have quarterly or annual meetings of the Trust’s trustee(s) with minutes prepared and signed. These meetings should deal with the Trust’s income and capital distributions, expenses of the Trust, etc.
- And finally – consider independence. An independent trustee can help ensure that the Trust is administered properly and that its intended objectives are met.
As Al (and Geoff) proved, Trusts are an excellent estate planning tool if properly planned, executed and administered. The price of doing it right pales in comparison to the cost of not. As Red Adair said:
“If you think it’s expensive to hire a professional to do the job, wait until you hire an amateur.”