I spend a lot of virtual ink typing out ideas and strategies to help Canadians take care of their families when the time comes to transfer their estates in an efficient manner.
If you are reading this article, it is likely that you are in the second half of your life, you have perhaps accumulated some sort of nest-egg and that you would like to pass some of that nest-egg on down to the next two generations. You want them taken care of financially and have probably earmarked a portion of your assets for that purpose.
You want your wealth to outlive you so that it can benefit your next generations. Generational wealth.
The arena of estate planning and final expenses can be an overwhelming and confusing place, but you can be sure as can be, that anywhere in Canada, taxation will be part of the equation.
One issue that will often arise for non-registered investments (accounts that are not RRSPs, RRIFs or TFSAs, etc…) is that the account growth will be eroded by taxation, and much more so if you leave it in your estate.
One way to deal with this, and also ensure that the benefits of your nest-egg extend all the way to your grandchildren, while still benefiting your own children is a tax-free permanent life insurance policy.
Generational Wealth Transfer Using Permanent Life Insurance – Here’s How:
Consider taking out a permanent life insurance policy on your adult children. The investment growth in these plans is not subject to annual taxation, which will increase your own overall wealth. As the owner of the plan, you will control the money growing inside the plan, and can access it during your lifetime, if you need to.
Your Child: Life Insured
When you purchase the plan and insure your own child, they will have a valuable asset right away: life insurance protection. You can easily transfer the policy to them at any time tax free, however most people will transfer the policy at the time of their passing. This is done seamlessly by naming them as a contingent owner on the plan. As the new owner, they now have access to all the money that is growing inside the policy.
This money can be used to help buy a home, supplement their retirement or help fund their child’s (your grandchild’s) education.
Your Grandchild: Beneficiary
By naming your grandchild or grandchildren as the beneficiary on the policy, you have helped put a foundation in place that they can build on. As the named beneficiary on the policy at the time of your adult child’s death (hopefully well into the future), your grandchild will receive the proceeds of the life insurance policy tax-free.
If you would like to talk about your own nest-egg and what options are available to you today and in the future, book a free call here: 15-MINUTES FREE
As always, I wish you health and happiness.
THIS ARTICLE IS PROVIDED AS A GENERAL SOURCE OF INFORMATION ONLY AND SHOULD NOT BE CONSIDERED TO BE PERSONAL INVESTMENT OR LEGAL ADVICE. READERS SHOULD CONSULT WITH THEIR FINANCIAL OR LEGAL ADVISOR TO ENSURE IT IS SUITABLE FOR THEIR CIRCUMSTANCES.