Kathy Findlay - Markets at a Glance

Don’t miss this informative seminar. By planning for tomorrow today, you can retain more of your assets, protect your estate and leave a lasting legacy for your family. Young or old, wealthy or middle class, an estate plan can reduce the taxes and expenses of an estate, simplify and speed the transition of assets to the next generation, ensure that beneficiaries are protected and that the people you have chosen receive your assets.

A common misconception of estate planning is that it is only for affluent persons and those in the later stages of their lives. What needs to be recognized is that all persons should develop an estate plan no matter what age or economic status. This misconception can result in significant unnecessary costs to the estate and additional burden to survivors. In fact almost everyone can benefit from the development of a good estate plan. If you do not plan your estate then provincial law determines who gets what. In some cases CCRA can be the major beneficiary.

There are a few basic steps that should be followed when putting together your estate plan. Some of the considerations are: providing support for your immediate family, minimizing taxes and probate fees, determining when a certain beneficiary receives an inheritance, and deciding whether to leave something to a charity. An estate plan will vary from individual to individual. The complexity of your plan will depend on the size of your estate and the stage you are at in your life.

The goal of our Estate Planning Seminar is to provide an overview of the estate planning process, addressing the main elements of the plan and providing some helpful tips for you through the process. From there you can decide whether a one on one complimentary consultation with a financial planning consultant would be useful for you.

The seminar will be offered at two separate times to ensure that everyone interested in this event can make it. Our guest speaker will be Bruce Hirtle, C.F.P., CLU, CH.F.C., of RBC Dominion Securities Financial Services Inc. Bruce is a graduate of the University of British Columbia with over thirty years of experience in the financial services industry. He has extensive experience and knowledge in estate planning for individuals as well as all sized businesses, including family succession planning and outright sale of the business. Bruce developed and headed the Financial Services Division of Pemberton Securities before the merger with Dominion Securities and later the Royal Bank.

We encourage you to bring your spouse or a family member that may be instrumental in assisting you with your plan. Please RSVP to either myself at 604 257-7055 or my associate Jas Salh at 604 257-7359 as seating is limited.

Thursday November 7th at 3:00 pm
31st Floor Boardroom
666 Burrard Street
Refreshments will be served.

The province reset the coupon rate on all outstanding variable BC Savings Bond issues to 2.7% from 2.5% for the period of October 15, 2002 to April 15, 2003.

As mentioned in the August issue of “Markets @ A Glance” I recommended that clients consider redeeming their variable BC Savings Bonds and reinvest the funds into either a fixed rate bond, units of an income trust or a liquid money market security. The choice will be unique to each individual.

Clients should only hold onto these variable bonds if they want a six-month term investment within their portfolio and do not require any liquidity between now and April 15, 2003. On April 15th these bonds can be redeemed at par plus accrued interest.

The deadline for getting your redemption orders in is October 7, 2002 if you wish to have your cash available on the 15th. You can still redeem your bonds up to October 11, 2002 however your funds will not be available until October 21st for these late redemptions.

If you have not spoken to me about your BC Savings bonds please call me directly at 604 257-7055.

Registered Education Savings Plans are deferred savings plans to which contributions are made by a subscriber. Income generated within the plan is not taxed until it is withdrawn.

RBC Dominion Securities offers a Family Education Savings Plan. These plans can name multiple beneficiaries provided the beneficiaries are either the children and/or grandchildren of the subscriber. The advantage of setting up a family RESP is that the funds in the plan do not have to be shared equally by each of the beneficiaries. This is useful if one beneficiary has a significantly higher education cost than another.

Unlike an RRSP, there are no restrictions on what the funds of an RESP can be invested into. Contributions to the plan must be made within the calendar year and cannot be carried forward. The contributions are limited to $4,000 per beneficiary, per year up to a lifetime maximum per beneficiary of $42,000.

The Canadian Education Savings Grant is a grant that will provide a 20% match on the first $2,000 contributed to an RESP per eligible beneficiary, per year. The maximum life of an RESP is 25 years and contributions can only be made during the first 21 years of the plan. For more information on Family RESP Plans please contact me at (604) 257-7055.

Alter Ego Trusts – In simple terms a Trust provides an intermediary between yourself and your intended heirs. It is a legal entity separate and apart from yourself and your estate that functions as a means to transfer assets to your beneficiaries. An Alter Ego Trust is a special type of Living Trust that allows the Settlor to settle assets into a trust without triggering capital gains. Unrealized capital gains will ultimately be realized upon the death of the Settlor and will be payable by the Trust. However by transferring assets into an Alter Ego Trust, probate taxes will be avoided on these assets. In BC, for an estate of over $50,000, probate taxes are 1.4% of the value of
the estate. To qualify as an Alter Ego Trust the Settlor must be over the age of 64. Only the Settlor may receive income or capital from the Trust during his or her lifetime. To find out more on how to set up an Alter Ego (or Joint Spousal) Trust or whether it would be beneficial vehicle for you please contact me at 604 257-7055.

Key Market Facts