The latest 2021 Canadian census data brings into sharp focus the fact that people are living longer. In fact, you will likely live more years during your retirement than you will in your working life.
Protecting your wealth throughout your retirement years, and beyond has become a lot more difficult than it once was. A volatile world coupled with increased life expectancy means that retirees need to now put together a comprehensive plan that is robust enough to withstand the many eventualities and unknowns that may occur throughout a lifetime that may last 100 years or more.
Fortunately, there are numerous estate planning strategies built to protect retirees for the years ahead.
One simple strategy we recommend all retirees consider is how they approach the concept of ‘downsizing.’ When preparing for our elderly years, many people think that they should downsize their primary home because society has told them they should.
However, if you are downsizing to reduce your workload, we recommend not downsizing mathematically because you are downsizing a potentially very lucrative tax exemption. So, instead of buying the third floor flat, buy the penthouse. Your primary home is an asset that is growing tax free through both you and your spouse’s lifetimes. Then, if you need elder care, you can sell this tax-free asset to pay for it.
An Investment Trust is another very effective strategy for helping retirees to protect their wealth for the decades ahead. By holding investments in the traditional way via the Bank Act, retirees are exposed to all the ups and downs of the market. Trust Law via the Insurance Act offers a safer option where retirees have more protection and predictability - two qualities that are worth their weight in gold, especially in today’s world. In particular, Investment Trusts that are governed by the Insurance Act are principal guaranteed, thus withstanding short to medium-term falls while benefitting from market upturns when you can lock in new values.
These are just a couple of the many solutions available.
MacMillan Estate Planning’s team of in-house lawyers, accountants and financial planners have an arsenal of innovative solutions and tax minimization strategies available to families, helping to protect and preserve your wealth. If you are worried about the future, please take advantage of our complimentary consultations; call us or email us: 1-833-266-6464 / email@example.com to learn more.