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Estate Bonds

Would you like to give more to your family and less to the government?

If your answer is “yes,” you might want to consider an Estate Bond®.

Here’s the problemHand isolated on white

Like many Canadians, your financial plan may include an element of savings that you never plan to spend. You have invested some money that you intend to pass on to those you care about most.

The problem is this strategy’s success is largely based on the investment’s rate of return, the more tax you pay. This means your estate may end up smaller than you’re anticipating.

What are your options?

You can continue to pay tax on the income earned from your savings or you can invest the funds using a financial planning strategy known as an Estate Bond.

This attractive alternative to taxable investments offers:

  • A large, immediate estate value
  • Tax-sheltered growth of cash values
  • A tax-free maturity value at death
  • Reduced estate settlement costs, if you’ve named a beneficiary
  • Potential for creditor protection, if you’re made an appropriate beneficiary designation
  • Liquidity, if you require it

The Estate Bond Solution

The Estate Bond moves savings from a tax-exposed investment to exempt life insurance policy. InnoVision, Manulife’s premier universal life insurance policy, provides immediate life insurance protection and an investment within the policy that accumulates on a tax-deferred basis. When you die, your heirs receive the proceeds tax-free.

When you take advantage of the Estate Bond financial planning strategy, you not only increase the size of your estate, you also reduce the amount of tax you pay.

Here’s the problem

When you die, your assets can be transferred tax free to your spouse. But, when your spouse dies and the assets are passed on to other heirs, 50% of the increase in the value of some assets will be subject to tax. So, assets like your cottage, stocks, company shares and other investments left to your heirs may be subject to capital gains tax. And this tax is paid before your heirs get anything. Are you prepared for the Government to claim a large portion of your financial legacy?

It’s a tax time bomb that most people are unaware of and don’t plan for.

What are your options?

Creating an effective estate plan means making sure your beneficiaries are looked after. There are a number of ways to help pay this tax, but which one is best for you?

The alternatives:

  • You or your family can start saving today,
  • Your heirs can borrow the required funds from bank,
  • Your estate can sell assets, or
  • You can purchase life insurance to cover the growing liability.

The best solution

Life insurance can be the most effective estate-planning tool to fund the tax liability. Manulife’s premier universal product, InnoVision, can provide you with tax-free cash exactly when it is needed to pay the future tax obligation. It ensures that your heirs don’t lose their inherited assets because of a large tax bill. Your heirs get the property you intended them to receive and you get the peace of mind that comes from knowing this wall happen.

Source: Manulife


Disclaimer: Insurance, Investment and Mortgage products & services are provided by Devangkumar Shah.
Mutual Funds license sponsored by Shah Financial Planning Inc.
Lotus Loans and Mortgage ltd. is the principle mortgage broker.