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Often they are too busy looking after customers, suppliers, shareholders, partners, employees, bankers, family and others leaving no time to properly look after their personal planning. They have excellent professional advisors who are experts at solving problems but no one is looking at their estate and risk planning from a 30,000 foot perspective using a comprehensive, holistic approach.
Mark Halpern is a Certified Financial Planner (CFP), Trust and Estate Practitioner (TEP) and widely recognized as one of Canada's top life insurance advisors.
As CEO of WEALTHinsurance.com® and illnessPROTECTION.com® Mark leads a team that provides special expertise and insurance strategies for business owners, entrepreneurs, professionals and high net worth families.
Mark works closely with lawyers, accountants, bankers and financial advisors to provide their clients with unique insurance products and comprehensive estate planning solutions.
They didn’t need the CPP money to live on. They planned to just pay the taxes on the benefits received (at 54% in Ontario) and reinvest the difference. They wanted to pay less tax and leave a charitable legacy for their family.
They would have continued paying taxes on the CPP benefits received and their estate would be left with a $700,000 tax liability payable when the second of both spouses dies.
We used the CPP Philanthropy™ strategy and by just using their CPP benefits, we created a $1.4 million gift to charity for them. This also saved their estate $700,000 in taxes. They will now be remembered for their generosity, not paying more taxes.
Mr. and Mrs. M, aged 72 and 68, both retired, are the custodians of a Holding company with real estate, equities and fixed income investments totaling $20 million. The entire portfolio is "never spend money" as they plan to pass it along to their children and grandchildren. They pay income tax every year at over 50% on the business investment income. They wanted to leave more for future generations and less to the tax department.
The growth of the "never spend money" would continue to be impaired by high taxes each year and would be taxed again when withdrawn from the company for their heirs.
The couple no longer gives up half of the annual business investment income to the tax department, so the ‘never spend money’ now grows much faster, unimpaired by annual taxation. We used a portion of it to purchase a tax-exempt, joint last-to-die life insurance policy, with premiums payable for only 10 years. The policy is fully guaranteed and now provides an equivalent return of 11.5% at death on the 'never spend money' with no market risk or interest rate risk. When the second of both spouses dies, their beneficiaries will receive the insurance proceeds tax-free and the company will distribute the insurance to them without taxation.
We were contacted in 2005 for information about Critical Illness Insurance. The first meeting uncovered an urgent need for comprehensive tax planning and estate planning. The husband owned a few life insurance policies purchased many years before, but no one had ever looked at the big picture, complicated by the tax implications for his wife, a U.S. citizen and permanent resident of Canada.
His family would have been forced to liquidate a large chunk of the real estate portfolio to pay the taxes.
We structured a solution that included life insurance, wills, powers of attorney, family trusts and tax planning for each of his children. This complex case was examined in detail for an article published at Canada's website for Financial Professionals. Read it HERE
A married, 55 year old real estate developer with a net worth of $50M hates life insurance. He will have estate taxes due on the second to die of him and his spouse but has never purchased insurance because the premiums are too expensive and he can do much better investing his own money in real estate
His estate would have been liable for more than $15 million of income taxes. His family would have been forced to sell assets under pressure to pay the tax bill.
His final estate tax liability of more than $15 million was eliminated by the placement of his new Life Insurance policy. We structured an Immediate Financing Arrangement with a leading financial institution to preserve his cash for his business activities and reduce the effective cost of his life insurance to 5% of the total premiums.
Mrs. B, is a 70 year old widow with 2 adult children. Her $20 Million estate is comprised of real estate and other fixed income investments. She wanted to eliminate estate taxes and leave a charitable legacy.
Mrs. B's family would have liquidated most of her investment portfolio and some of the properties to pay $5 million in taxes.
We helped her create a $10 million gift to a private foundation through insurance, so her family will no longer be required to pay a $5 million tax bill when she dies. She will be remembered for leaving a $10 million gift to charity instead of a $5 million payment to Canada Revenue Agency.
Mr. G, a 65 year old business owner, sold his company for $40 million. He wanted to eliminate estate taxes and get guaranteed retirement income.
Mr. G's retirement income would be cut in half, and his estate would have owed the government $18 million of taxes. His family would ultimately be left with a much smaller estate after paying the tax bill.
His family will be left with an additional $18 million because the estate tax liability was eliminated using a life insurance policy and his retirement income increased by 50% on a guaranteed basis, with no market or interest rate risk.
J is self-made, married, with 2 young children and no life insurance. He was recently diagnosed as pre-diabetic and anxious to protect his family. All of his corporate assets are used to secure the bank loans used to finance company growth.
His family was at financial risk if something happened to him. His growing estate would have a large tax liability upon his death.
We reduced J's tax liabilities by $2 million by arranging a personalized life insurance plan. This provided his family with much needed security. By structuring an Immediate Financing Agreement (IFA), we enabled him to continue investing in his business, not insurance premiums.
R & H own and operate a growing chain of automobile dealerships. The business is very profitable and now has 70 employees. No Buy/Sell Agreement is in place and no insurance was arranged to properly fund a buy-out. Both partners are underinsured and paying tax at the highest rates.
The family of each partner was at financial risk if something happened to either of them. Surviving spouses would require continuous income and the company would need to fill the void of the former business partner while finding a suitable replacement. The added burden of paying off a surviving spouse through earnings could cause the business to collapse financially. Estate would be left with a large tax liability upon death. Personal holding companies would continue paying tax at more than 50% on investment income.
We eliminated a $4 million tax liability which would have been owed by the families using a comprehensive estate plan developed for both partners. Life insurance and critical illness insurance coverage was arranged to fund their Buy/Sell Agreement in the event of a partner's death or disability. Premiums are paid by the company tax-efficiently. The partners and their employees are now protected by the customized benefit plan we implemented.
A one-man plumbing operation grew into a profitable enterprise worth $4 million . The company is debt-free, with 10 employees, a small piece of commercial real estate and fleet of 6 trucks. W has always re-invested the earnings back into his business, has very little savings, no life insurance and pays income tax at the highest marginal rates.
His young family was at financial risk if he became sick, disabled, or died prematurely. He had no will or powers of attorney and his wife wouldn't know where to locate all of his important documents, bank accounts, or digital passwords.
His ultimate tax liabilities immediately reduced by more than $1.5 million with comprehensive tax and estate planning and placement of appropriate Life Insurance. Premiums are paid by the company tax-efficiently. We protected his income with Disability Insurance that will provide him with $15,000 per month, tax-free, and Critical Illness Insurance that will pay a tax-free lump sum of $1 million if he gets diagnosed with cancer, stroke or a heart attack - and return all the premiums if he stays healthy. His new Personal Health Spending Account allows him to deduct all family medical expenses, including orthodontics for his children. The Estate Directory available free at this website protects his family from unnecessary professional fees.