Canadian couples rely upon Government pensions, CPP and Old Age Security (OAS) for a significant portion of their total retirement income planning, which can equal 20% to 50% or more, of their actual or projected total retirement incomes. Corporate and personal pensions (such as RRSPs and TFSAs and other savings) are other sources of retirement income from a planning perspective.
We've all read or heard about the unlucky family that is wiped out by a house fire and didn't have any fire insurance. All too often, people mistakenly believe that it won't happen to them. The reality is that bad things CAN happen and there is nothing that guarantees they will be immune from disaster. Insurance is simply an economical way to protect ourselves from the financial loss a tragedy can bring.
Joint ownership is used by millions for various reasons. When problems arise, they are usually unintentional and it can be too late to remedy them. For example:
Jane wants to avoid probate with as much of her estate as possible. She also wants her daughter, Sally, to have easy access to her cash at death to take care of last expenses. Jane thinks...she can do this by naming Sally on her bank accounts jointly.
On the surface, this looks like a quick and easy way to accomplish what she wants. It's what lies below the surface that can sink her financial ship.
Standard financial and tax planning advice for the past several decades for business owners has included the use of incorporation to both insulate Canadians from business risk and liability and for asset building and income cash flow planning.
We've all heard that life has two certainties - death and taxes. You need to know the two often coincide. While Canada does not have an official death, estate or inheritance tax, there are some postponed taxes that become payable on death. There are other obligations that need to be taken into account as well. Without proper planning, an estate may have to face large and unexpected cash shortages. Consider: