There are two major developments that impact life insurance contracts, may affect you directly and warrant a conversation. Let’s take a quick look…

First, on March 22, 2016, the federal budget proposed to change the tax rule governing the transfer of ownership of a life insurance policy to a corporation.  The change reduces the benefit that was previously available.  With that in mind, if you transferred a life insurance policy into your corporation at any time, please contact us so that we can review your situation.

Second, effective on January 1, 2017, the tax rules governing all permanent life insurance policies will change significantly for the first time in 35 years.  Of greatest importance is a reduction in the amount of cash value that can accumulate in policies purchased after January 1, 2017.  If you want to take advantage of the current rules which allow for more tax-free cash value growth in a life insurance policy, please come in and see us.  Policies in place prior to January 1, 2017 will be “grandfathered” and not be affected by the new tax rules.  This is a time-limited opportunity.

While there was a lot more in the federal budget than this, these key items may have a real impact on you and your heirs. To see a more detailed review of the budget, take a look at the summary by CALU (Conference for Advanced Life Underwritng) in the attached link.

http://www.calu.com/securefiles/CALUSpecialReport/CALU_Special_Report-March…

We’re here to help, so feel free to reach out.

Here are a few ways we see our clients showing that they care:

• They make sure they’re in a productive conversation about wealth with their family, long before it transfers
• They share their aspirations and the thinking behind them for how their legacy will be stewarded into the future
• They ensure that their children know the family’s advisors
• They put measures in place to protect their family when they pass away
• They share the wealth, and not just the cash – the know how, values and thinking that produced it
• They don’t play tactically, the operate strategically ( that means having a vision for the future, clear goals, and a clear plan to get there)
• They give to what matters to them, and involve their family in the experience.

Family wealth isn’t just about the money, it’s about what truly gives the feeling of wealth – inclusiveness, relationships, clarity, and confidence are just a few of your real assets.

Savour them and each other on Valentines Day.

First, goals are great, but vision is better. The reality is that vision, a clear picture for a desired state in the future, always finds a way. Goals are steps to get there, but the “there” is the powerful thing. Vision compels us, drives us, and pulls us forward even when we don’t feel like pushing ourselves. So, take some time to consider what you really want for the future, or take some time to review what you’ve been thinking. Get clear. Lock it in. Let it be the force that moves you.

With that clarity, it becomes a great time to take a fresh look at your goals and ensure they’ll contribute to that vision. Many people’s goals are more like “to do lists” than goals. Goals should require a bit of a breakthrough of some kind. They should call on you to be different than you have been before, or even better than you’ve been before. Goals are about stretching so that we be, do and have the things in our lives that will take us toward our vision.

These conversations aren’t always easy, but they’re important. Want some help? We’re happy to be in the conversation with you. But regardless of your vision for the future, make sure it’s one that inspires you and one that you act upon. Welcome to a new year.

• Insurance contracts pay at a time when assets are typically transferring to the next generation. This can bring some real advantages, especially when taxes become due and there are cash demands.
• Estate equalization can be a difficult landscape, especially if there have been multiple marriages, children involved in the business, or family risks and challenges along the way. Insurance pay-outs provide a great deal of liquidity (a.k.a. “flexibility”) at a perfect time.
• Funding transfers of wealth within a family, addressing taxes, and charitable gifts can require the sale or dismantlement of other assets that typically have imbedded tax issues and valuation discounts, if they’re sold at a discount.
• The design of an insurance contract can include asset protection and privacy features that other assets may not be able to deliver.
• The cash value of most insurance policies grow on a tax sheltered basis, similar to that of an RRSP.
• Small business corporations enjoy a notional account called the Capital Dividend Account (CDA) greatly enhances the use of life insurance in a corporate setting.
• This isn’t a definitive list, but it’s important to know what a tool can do, not just what it’s called.

Given the upcoming changes we thought it would be an ideal time to have a session outlining the benefits and opportunities that life insurance offers families and businesses before the rules change. We are excited to host this session Nov 26 at noon at the Glencoe Club. We know you will benefit by attending and hope to see you there! Please RSVP to debbie@familywealthcoach.ca.

Similarly, if you’ve ever been handed a math problem, you might have noticed that you don’t have the same sort of experience. Odds are you slowed down, recognized whether or not you’ve seen this kind of problem before, considered what approach you might use to solve it, and maybe started looking for a pencil and paper. It’s not intuitive or instinctive – you’re slowing down and deliberately taking some action.

The first example is fast thinking (or System 1 thinking), and the second example is called slow thinking (System 2 thinking, if you’re in the psychology world). System 1 thinking requires no effort on your part, but System 2 thinking requires attention and effort. If you don’t pay attention, you will not perform as well.

What’s the point?

When people apply Fast Thinking to Slow Thinking Problems, things don’t go so well. An intuitive answer to a mathematical problem only works if you’ve solved that kind of problem so many times that you actually have some intuition about it. Otherwise, it’s a major gap in judgement.

When you think about your wealth – how you’re building it, what you want to do with it, how you want it to be regarded in the future, how you want future generations to work with it – it is a System 2 Slow Thinking exercise. Our brain is prone to taking the easy way and doing the least amount of work.  But don’t be rushed into decisions where someone hasn’t helped you take the time to pull apart exactly what you want to do, and why you want to do it; what’s motivating it. Big decisions leave a big ripple, good or bad.

It’s nice to get some good news.

Some of the questions are obvious, like, Do you have a plan? Or know what your options really are? This is a time to get good clarity so that you’re deliberate in your approach and successful in your result.

We use a tool called the Business Exit Readiness Index to help you assess your readiness for your future business departure. It’s a simple, 20 question survey that will help you to see what some of your options are, and what a possible timeline for your transition could be.

To leave your business requires more than a buyer; it demands both mental and financial readiness. The BERI™ assessment will help you assess both.

If you’re interested, click the link below and take our customized Business Exit Readiness Index™ (BERI™) Assessment.

http://berireport.com/Survey/Register/5C08A737_6047

When you are finished answering the twenty (20) questions, a six (6) page, detailed BERI™ Owner’s Report will be emailed to you. (NOTE, if you want this report to avoid workplace e-mails where others track and monitor your traffic, you may choose a personal e-mail address to receive your Report).

The answers to your twenty (20) short questions will only be shared with us if you select the box on the initial page.  All of your information will be kept confidential and will not be shared with anyone outside of our business.  And, if the BERI™ Assessment and Owner’s Report really gets you thinking and you want to continue the conversation, please contact us to schedule a meeting to discuss an additional BERI ™ Exit Options Report which accompanies the Owner’s Report.

If you’re contemplating your business departure or transition, take a look at the BERI™ report. We think you might find it quite useful.

Perhaps that’s why so much attention is focused on New Year’s celebrations: it marks both the end of one year and the beginning of the next.

While the work we did and the decisions our clients made in 2014 were anything but indifferent, there are a few things that we’re celebrating.

First, we have incredible gratitude to our clients. Our greatest pleasure comes from helping each of our clients make very specific, customized and important decisions about how to best employ and steward their wealth.

We’re also very grateful for our team. Debbie White and Kim Bayne help make everything move and provide immense support to helping us stay focused, on track, and free to keep thinking about our clients and their needs.

We also celebrate that Andrea Holmberg received her CPA designation this year. It’s a significant achievement and serves to expand the depth of our team even further.

January offers a new year and a new beginning for all of us. We look forward to sharing the year with you, and wish you all the best for 2015.

Knowing “what” you want is important, but knowing “why” you want it creates power. So the question is, how do you know what matters to you? One of the starting points is to clarify your values.

“Values” is a loaded word and many people have a preconceived idea of what they are. Honesty, integrity, community, hard work, and family are common values, but they are not necessarily the values that really move people – they are social values more than lived values.

What do we mean by “lived values?” Think about it this way: there are rules running in the background of your thinking. They tell you what’s important and what’s not, what’s allowed and what’s not. When someone violates one of those fundamental rules, you’ll likely find yourself really upset. When someone honours one of those values, you’ll find yourself feeling proud of them or having respect for them.

Values behave like active decision-making rules.

Now imagine this – you create a goal and someone develops an action plan that either violates, or at least rubs up against one or more of your values. It might be an excellent plan, but will you follow it? Probably not. The big challenge is that many of us haven’t taken the time to fully articulate our values, so it’s hard to know when they are being rubbed up against.  We might have an “off” feeling, but not necessarily a clear idea of what’s happening. That’s why we start by taking our clients through a process to become laser-clear on what they value. Then we build a plan that honours those values and serves the goals.

When you know what’s really important to you and why, you won’t just build a financial plan, you’ll build a legacy.

It’s FEA, and it stands for Family Enterprise Advisor.

It’s a relatively new and quite distinguished designation that comes from completing a professional development program through the Institute of Family Enterprise Advisors (IFEA). The program, originally founded by UBC Sauder School of Business, has traditionally been offered only in Vancouver. Now, through partnerships with Ivey School of Business and the Alberta School of Business, this outstanding program is being offered in Toronto and Alberta.

This may seem like a strange piece of information for us to be sharing with you, since financial advisors like ourselves would be the most obvious candidates for the course.

But the beauty of the program is that it’s not just for financial advisors. It’s also for family members who manage or lead their family enterprise, and for any other advisors who work with family enterprises such as lawyers, bankers, accountants, board directors and non-family executives.

For you and your family, the program’s Alberta course schedule is an opportunity to augment your knowledge about navigating family dynamics, understanding how to foster trans-generational wealth, exploring the “human” side of succession planning and best practices in family governance.

While professional advisors certainly have a lot to gain from the program, the real beneficiaries could be you, your family members who work in the business, your successors, etc.

Put simply, continuity in wealth requires continuity in education.

If you would like to discuss this further please give us a call or go to the IFEA website at www.ifea.ca.