1. Retirement, Tax and Estate Planning Wealth Matters

2. Oct-2010-Est-Pln Wealth Matters Section 1: The Big Picture

3. 1. The Big Picture Financial: Having enough money in retirement to maintain lifestyle Estate Planning: Taking care of their heirs Tax: During life and at death. Tax on investment income, on sale of business, and on the estate Top 3 Financial Concerns 72% 79% 85%

4. 1.Retirement planning 2.Tax planning 3.Estate planning - shouldn’t be for another day 1. The Big Picture Today’s presentation

5. Section 2: Planning for Retirement Wealth Matters

6. 2. Planning for Retirement Lifestyle planning Living arrangements Income security Investment strategy Physical health and care planning Wealth preservation and transfer Asset protection Incapacity planning Important causes and charitable giving What do we need to consider?

7. What does retirement look like? –Continued income from work? –Income from work ceases? Goals and interests? New opportunities? –I always wanted to… –Consider impact on spending 2. Planning for Retirement Lifestyle planning

8. 2. Planning for Retirement Home Cottage Other vacation house / condo Do you need both properties? –What are the tax considerations for Principal Residence Exemption? 2. Planning for Retirement Living arrangements

9. 2. Planning for Retirement Do you have a financial plan? Should you split your pension income? What other income splitting opportunities exist? –Do you have enough resources to maintain your lifestyle? –How much can you spend? –What do you need to earn? –Regular review to stay on track Income security

10. 2. Planning for Retirement Working with your advisor

11. Section 3: Tax Planning Wealth Matters Oct-2010-Est-Pln

12. 3. Tax Planning Income splitting to help save for or during retirement Tax planning with your business structure Income tax consequences of ownership and sale of a vacation property Reducing tax on investment income to enhance retirement savings What are your tax issues?

13. Income splitting – with a minor child Income is attributed back to transferor Capital gains realized after transfer are taxed in minor’s hands (no attribution) On transfer, any inherent gains are triggered 3. Tax Planning

14. Income splitting – with an adult child No attribution of capital gains No attribution of income On transfer, any inherent gains are triggered and taxed 3. Tax Planning

15. –Don’t forget to consider your own financial needs –How much TAX will be saved? –Caution re: triggering capital gains on transfer –Caution re: sale at less than FMV Income splitting – with an adult child 3. Tax Planning

16. Certain exceptions to attribution rules can be exploited… Income splitting – with your spouse Rollover on transfer Attribution of capital gains Attribution of income 3. Tax Planning YOU YOUR SPOUSE

17. Income splitting – with your spouse First need to calculate potential TAX savings Is the right spouse paying lifestyle expenses? “Transfer for value” or “low interest loan” to avoid attribution –“rollover” to spouse not available Tax-deferred investing could be simpler, better 3. Tax Planning YOUR SPOUSE YOU

18. Income tax consequences –Capital gains on sale during life or deemed disposition at death Use of Principal Residence Exemption (PRE) –Family unit may only designate one property in respect of each year –PRE deemed to be claimed for all years if gain not reported –PRE may be used to offset Canadian gains from US property, but different issues arise Own 2 properties and doing something with either one? Income tax and your vacation property 3. Tax Planning GET TAX ADVICE

19. Saving through use of corporate tax deferral –2011 NS corporate active business income tax rate: 15.50% –Compare to 50.00% max rate on personally earned income –An incentive to save cash in your corporation Tax planning with your business structure Opco Business Owner Business Owner 50.00% rate 15.50% rate Cash accumulates 3. Tax Planning

20. $750,000 capital gains exemption Tax planning with your business structure Opco Business Owner Business Owner –Saving excess cash in operating corporation likely to prevent shares from qualifying –Purification – possible use of holding company Holdco Cash 3. Tax Planning

21. “Freeze” structure –to split income –to defer/reduce capital gains tax –multiply access to $750,000 exemption Tax planning with your business structure Opco Holdco Trus t 3. Tax Planning Business Owner Business Owner

22. $10,000 of:Tax paid Remaining after tax Interest Income50.00% or $5000$5000 Dividend (eligible)35.63% or $3563$6437 Capital Gain25.00% or $2500$7500 The difference in the after-tax value of $10,000 in income from interest, dividends, and capital gains: Investment income: Why is tax efficiency important? Investment success = portfolio performance? What about the tax you pay? 3. Tax Planning

23. Seek tax-preferred treatment as dividends and capital gains –even if portfolio includes exposure to interest, foreign income –increase your after-tax income Seek to defer income by minimizing distributions (tax slips) –deferral of tax results in absolute savings over time Seek ability to switch (“rebalance”) investment strategy without incurring tax Corporately held investments: Seek to defer distributions of highly-taxed income to the corporation Investment income: Don’t forget the tax 3. Tax Planning

24. 1.Maximize asset values 2.Minimize tax now and later 3.Minimize risks in event of untimely death, disability, incapacity 4.Ensure wealth is ultimately transferred efficiently and effectively 5.Avoid family disputes, costly estate litigation Why Wealth Planning? 1. The Big Picture

25. Wealth planning is more than investments. It is a process to maximize what you have, provide for your future, and effectively pass it on. Wealth planning is not just for the “wealthy”. It is something that everyone should do. It is never too early or too late to plan. Wealth planning provides a financial framework for your life and beyond. It is personal. It is customized. And it works.

26. Important Disclosure This material is general in nature and subject to change without notice. Every effort has been made to compile the information from reliable sources however no warranty can be made as to its accuracy or completeness. Before acting on any of the information contained herein, please seek professional advice based on your personal circumstances. Assante Capital Management Ltd. (“ACM”) and Assante Financial Management Ltd. (“AFM”) are indirect, wholly-owned subsidiaries of CI Financial Corp. (“CI”). The principal business of CI is the management, marketing, distribution and administration of mutual funds, segregated funds and other fee-earning investment products for Canadian investors through its wholly-owned subsidiary CI Investments Inc. If you invest in CI products, CI will, through its ownership of subsidiaries, earn ongoing asset management fees in accordance with applicable prospectus or other offering documents. Services and products may be provided by an Assante Advisor or through affiliated or non-affiliated third parties. © 2011 United Financial, a division of CI Private Counsel LP. All rights reserved.