TFSA Beneficiary Designations

In 2009 the federal government introduced the Tax Free Savings Account concept to Canadians. For anyone 18 years or older the TFSA has been whole-heartedly embraced as a tax-efficient vehicle to save money for short and long-term needs.

However, many people do not fully understand the importance of proper beneficiary designations and subsequently, they miss additional tax planning opportunities.

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Dealing with Inflation and Your Finances

On February 24th, 2022, Russia invaded the Ukraine, setting off an inflation spiral not seen since the early 1980s. As Russia is the 3rd largest producer of oil and natural gas (behind Saudi Arabia and the USA) the impact of declining reserves was immediate in the prices we paid at the pump this last Spring.

The rise in oil and gas prices in turn escalated the cost of all consumer goods, services, and food items so that the rate of inflation for June 2022 was 9.3%.

What exactly is inflation in economic terms?

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What is a Representation Agreement and why is it important?

Surprisingly less than 55% of Canadians have a current and valid Will, and even less have a Power of Attorney (to handle financial affairs) or a Representation Agreement. All three of these documents are necessary in British Columbia for complete coverage in the estate planning process.

A major accident or a long-term mental health illness (such as Alzheimer’s or Dementia) may suddenly eliminate an individual’s capacity to make informed decisions on their financial and/or health care needs.

A Power of Attorney gives the chosen individual(s), such as a family member or friend, the legal authority to make financial decisions on your behalf.

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Estate Planning using Segregated Funds

It has been estimated that close to two trillion in intergenerational wealth transfers will occur in Canada over the next decade as Baby Boomers glide through their “golden years”.  A massive shift of capital will flow through to the “Boomers” and then again to their children or another family member at death.

The key to maximizing any inheritance (either to be received or to be gifted) is to ensure taxes and estate administrative costs are kept to a minimum, specifically by avoiding the process of probate if possible.

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The Benefits of Charitable Gifting

We all want to make a difference in our lives and supporting our favourite charity with an annual donation is a wonderful start. The charity gets our cash donation, and we get a Tax Credit reducing our income tax liabilities – everyone wins!

Canadians can support a registered charity, foundation, non-profit, museum, educational institution, or religious group of their choosing. If you wish to make a meaningful contribution here are six ways to do so, regardless of your budget.

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The Disability Tax Credit

The disability tax credit (DTC) is a non-refundable tax credit that those with disabilities, or the people who support them, can claim to reduce the amount of income tax owed. Individuals may claim the disability amount on their annual income tax return once eligible for the DTC.  

The purpose of the DTC is to provide for tax equity by allowing some relief for disability costs since these costs are unavoidable expenses.

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Avoid these 6 TFSA Mistakes in 2022

In December 2021 the federal government announced that the 2022 annual TFSA limit will remain at $6,000. This means the cumulative tax-sheltered lifetime limit is now at $81,500.

As I have explained to many clients, there is no “downside” to owning a TFSA, any TFSA is better than no TFSA. However, many people make mistakes with the accounts which can cost them in the long term.

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Private Health Services Plans

Over the last decade traditional group insurance premiums have increased an average of 10% per year. Provincial governments downloading once-covered expenses such as chiropractic, physiotherapy, and vision examinations, have had much to do with escalating costs. Drug costs for new medications and annually adjusted dental fee guidelines, have also made a large impact on increased premiums.

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Succession Planning for Business Owners

Business owners deal with a unique set of challenges. One of these challenges includes succession planning. A succession plan is the process of the transfer of ownership, management and interest of a business. When should a business owner have a succession plan? A succession plan is required through the survival, growth and maturity stage of a business. All business owners, partners and shareholders should have a plan in place during these business stages.

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