Is your estate waiting to explode?
When you die, you can transfer your assets 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 - a tax must be paid before your heirs get anything!
Most people don't know about this devastating time bomb. But a Horizon plan can help you protect more of what you've worked for.
What are your options?
Creating an effective estate plan means ensuring your beneficiaries are looked after. There are a number of ways to help pay for this tax, but which one is best for you?
Some choices:
- You or your family can start saving today.
- Your heirs can borrow the necessary funds from the bank.
- Your estate can sell the assets.
- 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. We design a plan to provide you with tax-free cash exactly when it is needed to pay the future tax obligation. It guarantees that your heirs don't lose their inherited assets because of a large tax bill. What you get is peace of mind and your heirs get the property you intended them to receive.
Revenue Canada Wants a Portion of Your Estate
| Asset Type | Market Value | Original Cost | Capital Gain | Tax Payable* |
|---|---|---|---|---|
| Stocks & Bonds | $1,000,000 | $1,000 | $999,000 | $ |
| Vacation Property | $300,000 | $50,000 | $250,000 | $ |
| Art & Jewelry | $125,000 | $40,000 | $85,000 | $ |
| TOTALS | $1,425,000 | $ |
| Asset Type | Growth Rate | Future Value | Capital Gain | Tax Payable* |
|---|---|---|---|---|
| Stocks & Bonds | 8.00% | $4,660,957 | $4,659,957 | $ |
| Vacation Property | 3.00% | $541,833 | $491,833 | $ |
| Art & Jewelry | 2.00% | $185,743 | $145,743 | $ |
| TOTALS | $5,388,533 | $ |
* Tax Payable refers to assumed 50% of capital gain is taxable at a personal rate of ? %. Each Province has different tax rates and probate fees and are subject to change. Contact us or your accountant to determine your approximate taxes payable.
How Horizon Plans to Protect Your Estate
- Horizon will custom design a solution to meet your specific needs.
- You can choose from amoung many investment accounts.
- You can choose a death benefit that increases over time to match the growing tax liability.
- It creates immediate estate liquidity which can pay for the taxedeposits
- an choose the amount and number of depostits made to the plan to suit your needs.
- Your Horizon Advisor has access to tax and estate planning professionals to help with complex situations.
- You should always consult your accountant and lawyer before making any decisions.