STYLUS estate planning information session may 2016 ppsx

Financial PlanEnsuring your cash flow meets your spending needs Investment Plan Ensuring your investments can meet your cash flow needs Making Plans... Tax Deferred Investment Accounts:

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2016 Information Session

Tax Planning for your Estate

STYLUS Asset Management

Welcomes You To Our

 Richard Rizzo, Bateman MacKay

 Brennan Carson, STYLUS Asset Management

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1 Financial & Investment Planning

2 Cash Flow Optimization

3 Tax Planning

4 Wealth Transfer

Agenda

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Financial Plan

Ensuring your cash flow meets your spending needs

Investment Plan

Ensuring your investments can meet your cash flow needs

Making Plans

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Financial Planning

Current Financial Picture Snapshot

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What are your assets?

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1 What is their purpose:

growth, income, lifestyle, estate?

2 What is the expected

appreciation of those assets?

3 What are the tax implications

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Personal Income Statement

Expense s:

Annual &

Capital

All Sources of Income

Not all income is

taxed the same!

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Investment Planning

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At STYLUS we incorporate two important factors into your investment plan:

• TIME HORIZON

• PERSONALITY

Investment Planning

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Immediate Needs

(Next 12 months)

Medium Time Horizon

(3-5 Years)

Longest Time Horizon

(5+ Years)

Shortest Time Horizon

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Value with Income

U.S Blended Equity

Wealth Protection

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Cash Flow Optimization

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Investible Assets

Required cash flowHoldco

Cash RRSP TFSA

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DECISION #1: Contributions

 How much to contribute?

 When to stop contributing?

Tax Deferred Investment Accounts: RRSP & RRIF

Plan Ahead!

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Read your STYLUS

newsletters!

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DECISION #2: Timing of Withdrawals

 When will you pull money from

RRSP/RRIF?

 How much will you need?

Timing and amount

determines

investment planning

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RRSPs are most efficient when your

tax rate at withdrawal is lower than

when you contributed.

RRSP Rule of Thumb

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Setting up a Bucket-ed investment plan

Preparing For RRSP Withdrawals

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“I don’t need

Momentu m

Growth

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“I don’t need

Momentu m

Growth

25%

50%

FUND ALLOCATIO

NS

25%

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“I will start

Momentum

Growth

25%

30%

FUND ALLOCATIO

NS

25%

20%

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“I will start

Momentum

Growth

20%

30%

FUND ALLOCATIO

NS

20%

20% 10%

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 Between ages 65-71

 Partial RRIF conversion from RRSP

 $2,000 per year withdrawn

tax-free via Pension Income Tax Credit

 SUGGESTION : Roll that money into

a TFSA (i.e move from taxable to

non-taxable)

 Benefit to estate planning

Tax Savings Opportunity!

RRI F

TFS A

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DECISION #3: Structure of Withdrawals

 How do I start withdrawing money to support my

cash flow requirements?

You need to know how much cash flow you require

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How do I maximize my cash flow on an after-tax basis?

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Case Study: Tax Optimization

Profile of Mr and Mrs Smith

Age 65 Newly Retired Investible Assets: $2 million Annual cash flow requirements: $120,000

Profile of Mr and Mrs Jones

Age 65 Newly Retired Investible Assets: $2 million Annual cash flow requirements: $120,000

Cookie Cutter Investments Inc.

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SMITH

$1.2 million

TFSA RRSP

JOINT ACCOUNT

$100,000

$0

Account Allocations

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SMITH JONES

Withdrawals

$45,000 each

$0

$30,000

$60,000 each

$0

TFSA RRSP

JOINT ACCOUNT

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SMITH JONES

Taxes

$10,868 each

$0

$2,778

$17,790 each

$0

$24,513 $35,580

TFSA RRSP

JOINT ACCOUNT

Tax Payable

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Where are you going to get $100,000

if you need it immediately?

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Tax Planning

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Generating the most tax efficient cash flow

Tax Planning Strategies

Capital Gains vs Dividends vs Interest Income

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 Should be a function not just of tax

implications, but also TIME HORIZON

 Interest Income (i.e Bonds) serves a

purpose – lower volatility for shorter-term cash flow needs, BUT taxed at higher level

 Cash has no volatility & no tax!

Capital Gains vs Dividends vs Interest Income

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 Capital gains distributions

 Lower interest & dividend income

 5 year comparison: net of taxes vs “generic”

funds

STYLUS Value with Income & Wealth Protection Funds

FUND (median of Canadian mutual funds)

Pre-Tax Performanc

e

Dividend Income Fund 4%

Balanced Fund 3%

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Tax Profile

STYLUS Value with Income Dividend Fund STYLUS Wealth Protection Balanced Fund

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After Tax Return: STYLUS Funds vs

“Generic” Funds

STYLUS Value with Income Dividend Fund STYLUS Wealth Protection Balanced Fund

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Wealth Transfer

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 Moving existing non-registered accounts into

Trust

 STYLUS can manage Trusts

 Income sharing with family

 Creating an investment plan

– understanding the time horizon & objectives

Trusts

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 Gifting: Contribute to a child’s RRSP /

TFSA, non-registered account, grandchild

RESP

 Put the tax in the hands of the children

 Education: STYLUS presentations,

personal financial & investment plan,

educating them on your plan

 Account minimum for children of existing

clients: $100,000

Wealth Transfer Strategies

Are there other ways to transfer wealth and help

my children?

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Estate Planning

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Joint Accounts

• Consolidating individual investment

accounts into Joint account

• Move accounts at Book Cost

– i.e no tax triggered

Estate Planning Strategies

How Do I Lower My Probate Taxes?

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Summary

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Have you agreed on your

objectives with your spouse?

Do your children / beneficiaries

know your objectives?

Do your “affiliated professionals”

know your objectives?

Setting & Communicating Objectives

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Your life will change

Your PLAN needs to be dynamic and be monitored

STYLUS will help monitor your plan to ensure that

you stay on target

Your Plan…

REVIEW MY PLAN?

JVX

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We hope you enjoyed our

presentation!

Rick, Brennan, Julianna, Matteo, Maciek, Mario & Fiona

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