In times of old, a Strongroom was a secured vault where important legal documents and family heirlooms were stored in the homes of royalty and noble class families. Today, the assets of modern wealthy families are protected by skilled estate planners who shield the estate by enacting strategies to minimize tax and ensure the proper management of investments. Equally important, estate planners help bequeath a family’s legacy to the next generation, thereby giving purpose to a lifetime of achievements.
We craft your Strongroom to safeguard your significance. It sits at the very center. Your life plan, legacy plan, legal plan and tax plan surround and protect your significance, with strength and purpose. These five components working in harmony together are how MacMillan approaches the design and implementation of your Strongroom.
Your life plan is the driving force of your estate plan. As such, we start by forging this plan to ensure your significance is protected, preserved and enjoyed during your lifetime. We then turn our attention to your legacy plan. If we have done your life plan properly, your legacy plan will naturally flow from it.
Your legal plan and tax plan are essentially the technical tools used to enforce your life and legacy plans. They are there to help support and inform your objectives, not define them. Having the technical elements work effectively together is extremely important, which is why we have legal and accounting in-house.
Your significance is what is most important to you today. Protecting it is a moving target throughout your life. What is significant right now may change and evolve as your life unfolds. In your younger years, your significance may be your family, later it might be your career or business, and in retirement, it may be enjoying the spoils of your labor by travelling, engaging in charitable work or gifting to your loved ones. Your significance matters, and you deserve the right to protect it for you and your family’s benefit.
A life plan is about giving definition to what you want from your life going forward. In its simplest form, it is bucket list of all the things you want to achieve, and how you plan to make them a reality. Good estate planning should focus on your life, which is why we make it the main facet of your Strongroom.
People today are living longer than ever before, many spending more years in their retirement than they did in their working lives. Currently in Canada there are over 48,000 people that are 100 or over, and that number is growing. It is also the first time in mankind’s history that there will be more people over the age of 65 than under. If you are one of the fortunate people who lives to be 100 or over, you need to make sure market volatility, taxation, health issues and the cost of the care in your latter years are properly accounted for, so you are protected for the decades ahead.
The secondary plan that unfolds from your life plan, is your legacy plan. If you plan and protect yourself properly in retirement, you will naturally protect your family and charities as part of your legacy. MacMillan will help you to transfer your vision, wisdom, and belief systems to the next generation, ensuring your legacy will resonate and endure.
Making a charitable donation as part of your legacy plan is an admirable way to make a lasting impact, as well as an effective way to lower your tax expense. Normally, up to 75% of a taxpayer’s net income can be claimed as eligible charitable donations. In the year of death, up to 100% of your net income can be claimed. This creates a substantial tax saving opportunity, while also allowing you to support your charity of choice or begin a legacy by creating a charity or bursary program. If the donation is substantial enough to eliminate all taxes owing in the year of death, there is also an option to carry the credits back, up to one year, creating additional tax savings.
A legal plan typically consists of a last will and testament, a living will, a health directive and some trust planning. Most people think that if they have a will, they have an estate plan. A will facilitates the distribution of your assets to the next generation.
However, a last will and testament is not a tax plan, nor does it offer any bloodline protection. If your net worth is more than a million dollars, you may have outgrown a will, and should consider the more sophisticated methods that trust law affords.
Your tax plan is an important technical tool used to protect your life and legacy plans. It should not control your planning, but rather support your goals and objectives. Each year, countless individuals pay an excessive amount to the Canada Revenue Agency (CRA). Although paying taxes is an unavoidable reality, even in a well-designed estate, using the right tools and knowledge can significantly reduce or defer this sum. A proper tax plan should account for both domestic and international issues. Many families are unaware that internationally held assets, such as property or investments resident in the United States, are liable to both US and Canadian estate taxes. Failure to structure these assets within a larger tax scheme will inevitably cause their real values to be reduced.
Foreign assets can also legally create multiple estates. For instance, by owning property in the USA, you possess both an American and Canadian estate. Upon an individual’s passing, these two estates will need to be settled, adding considerably to the amount of time and money required. Our contemporary understanding of domestic and international legislation enables us to devise the most innovative means of minimizing the workload surrounding an estate while maximizing your total net worth.