1. Crafting The Memory A brief look at estate planning… Welcome to Dave’s presentation on the wise use of your assets later in life Dave Sharp, B.Sc.; CFP; EPC Certified Financial Planner Elder Planning Counsellor

2. So… now that we have accumulated these assets during our lifetimes, what do we do with them? As you might have heard, you can spend it, save it or give it away!

3. You have the option to distribute the majority of your assets to two of the following three groups. Don’t Rule Out Charitable Giving

4. Why planned giving? 1.Long Term Commitment to Charity It is our opinion and experience, there is no other single factor more important to the success of a planned giving program than committed donors. 2.Intergenerational Transfer of Wealth Another indirect reason or "trigger" for making a planned gift is the enormous accumulation of wealth in the hands of Canadians over the age of 55. In many cases, these individuals are being told by their financial advisors to consider making charitable gifts to help offset the tax "bite" on their estate 3.Desire to leave a Legacy Planned gifts are natural endowment fund builders. Why? In many cases, there is no requirement for the charity to spend a defined amount of the gift in the next fiscal period. Therefore, the charity can invest the gift and earn income which is tax free to it, yet can be used to fund the donor's wishes, or the institutions priorities forever

5. Here is one example of someone who did not pay much attention to her financial planning in terms of long term planning. Here is her scenario: At age 70, she had $450,000 in her RRIF but only took out the annual CRA minimums Upon her death at age 80, she had the following assets: Her home valued at $300,000 Her RRIF balance valued at $373,272 A TFSA balance valued at $35,000 Some non-registered assets valued at $150,000 with a ACB of $100,000 And, her annual income of $25,000 plus her minimum RRIF payment She had 6 heirs that she wanted to distribute her remaining assets to equally. She was a strong contributor to her favourite Charity but did not plan to make a donation to such in her Will or beneficiary designations as no one ever talked to her about it before.

6. Registered Assets are Fully Taxable at Death (Rollovers to surviving spouse permitted) *Assuming 48% Marginal Tax Rate Registered Assets $450,000* Estate Revenue Canada $234,000 $216,000

7. Value of Her RRIF Assets After her death at age 80, and after paying the final estate taxes for all applicable assets; each heir would have rec’d $111,136

8. But, fortunately, at her age 70; she met with Dave and made some changes to her financial plan! She opted to accelerate her minimum RRIF payments to $55,000 per year which should deplete her RRIF balance by age 80 –This freed up over $10,000 in after-tax dollars per year to do as she wished for.

9. Here is what happened to her tax situation: Under her initial plan, her total tax payments over the 10 years would have been $289,832 Under the revised plan, the tax bill would have been $237,912 - a savings of over $51,920

10. With the additional $10,000 of “freed up money”, she opted to work with Dave to increase her Estate value with the use of Life Insurance (Option #2). After final estate taxes (at age 80) for all applicable assets, each heir would have rec’d $121,878 – an increase of ~10%. Financial Concept – Use Of Life Insurance

11. Unlike many investments that result in taxable growth each year, permanent life insurance provides the opportunity to accumulate cash value without paying tax on it until you withdraw it from the policy (if you ever need to – otherwise, passes on tax-free to the heirs). This tax-advantaged growth may substantially increase the amount ultimately available for your beneficiaries. Insured Asset Transfer

12. And, last but not least, she wanted to remember her Charity The difference between no financial plan with no donation and with a financial plan with a $200k donation was less than $7,000 per heir Financial Concept – Remembering Charity

13. Your net worth cycle Consider this You may not use all your net worth during your lifetime. Does it make sense to pay income tax on the growth each year?

14. Conclusion Estate Planning takes time, effort, and expertise… … But done properly, it yields more than dollars and cents.... It yields Peace, Love, and a Lasting Legacy… Let someone help you build the legacy of your life today!

15. Dave and his associates would like to know they have the expertise to get the job done properly and effectively for you and your loved ones. Thank you!