Feeling confident about where you are and where you’re going is an important part of your financial journey. That’s why we make every effort to ensure our clients have both the knowledge and tools to invest, budget wisely and avoid common mistakes. Our Living Richer Podcast is one of those tools. In this podcast, Mark explores various personal finance topics and breaks them down into easy-to-understand terms. Have a listen.
Episode #16: Understanding Wills
1. Why a Will is the cornerstone of a good estate plan.
- Get to dictate where assets go, guardian of children, who administers estate
- Without a Will, the law decides who gets assets and it’s not necessarily all to a spouse
- Streamlines estate administration and can help to reduce taxes/fees on death
2. What makes for a good Will?
- Revokes previous Wills
- Names executor and alternate
- Disposes of household items
- Residue – no missing pieces
- Administrative provisions – a few pages at least
- Signed and witnessed
3. Beyond the Will, what should someone pay attention to when creating or updating their estate plan?
- Assets, family situation, contractual or support obligations
- Executor and an eye to the administration of the estate
4. What should someone consider when naming an executor?
- Should be ideally in province, definitely in Canada
- Financially savvy, time, age
- Relationship with beneficiaries, potential for conflict
- Consider professional executor
5. What are some of the main issues that can complicate estate planning and administration
- Poor Wills, Will challenges (undue influence)
- Joint assets – who actually owns them?
- Conflict – siblings; blended families
- Accusations against executor
6. What is probate and how can it be avoided or minimized?
- Probate is a court process to get court’s stamp of approval on the Will
- Probate fees approx.. 1.5% of the estate values
- Planning techniques: assets joint with spouse, beneficiary designations, gifting during life
- Each of the above has complications and pitfalls so important to be done holisticall
7. Why a trust can be an important part of an estate plan.
- Trusts – give someone benefit of money, but trustee controls
- Terms can be very flexible – from discretionary to set; can end at a certain age or continue, can have one or more beneficiaries
- Generally used to protect vulnerable beneficiaries – minors, disabled (ODSP), spendthrift, vulnerable spouse
- Can sometimes be used to provide some income splitting, but less so now with changes to trust taxation
- Need a trustee who knows what they are doing, trustworthy, time, objective
Episode #15: What to Expect When You're Expecting - The Money Edition
Our Living Richer Wealth Management team works with clients to help them navigate many different life transitions, and there are few things more life changing than becoming a parent.
This week, I’m happy to welcome Carolina Da Silva, a Living Richer team member and expectant mom, to discuss all the things you need to know, and do to prepare financially for this new beginning.
In this episode we’ll cover:
- Details on government benefits, who can qualify and how to get them.
- What you need to know about your health benefits from work.
- Budgeting for a new baby and how to prepare in advance.
- How to save money by getting free stuff and store discounts.
- Understanding how daycare costs may impact your planning.
- Estate and life insurance planning.
- Education planning through an RESP.
If you are expecting a baby or even thinking about starting a family, don’t miss this episode!
Parental Leave Benefits
Canada Child Benefit
CRA Guide to Child and Family Benefits
The Ultimate First Year Baby Budget
What to Expect When You’re Expecting Blog Post
Five Ways to Prepare Financially for a New Baby Blog Post
Episode #14: Insurance Strategies for Income Generation, Tax Savings and Estate Planning
When most people think about insurance, they think about it in terms of risk management. And that’s what the majority of the insurance is designed for. Car insurance covers you in case you get in an accident. You might get critical illness insurance, disability or life insurance to protect you and your loved ones from those risks.
What most people don’t know is that insurance can be used strategically, not only in risk management but for complex estate planning, income generation and tax minimization.
In this episode, the final of a three part mini-series, our estate planning specialist Greg Jizmejian and I do a deeper dive on some of these lesser-known insurance strategies.
- How to use insurance to plan for taxes on assets like a cottage
- Using insurance to help with income generation in retirement
- Utilizing a strategy to fully deplete the money in your RRSP with an annuity while preserving your capital for an estate
- How business owners and professionals with a corporation can use insurance to get money out of their holding company in a tax-effective way
- How to turn taxable dividends from a holding company income into tax-free dividends
- Utilizing insurance to meet your philanthropic goals by diverting money that would otherwise go to the CRA and instead directing it to your favorite charity
Resource: Corporate Owned Whole Life Insurance
Episode #13: Insurance Strategies to Reduce Taxes and Build Wealth
In this second of our three-part series on insurance, I continue my conversation with Raymond James Ltd. estate planning advisor Greg Jizmejian.
In this episode Greg explains the difference between term and permanent insurance and when they should be considered. We also look at why people in the 40-60 age range should consider insurance and how it can be used to help build wealth, reduce taxes and aid in intergenerational wealth transfer.
Finally, we discuss how business owners and professionals, like doctors, dentists and lawyers can leverage permanent insurance as part of a business growth strategy and to access funds within their holding company or professional corporation tax-effectively.
Episode 12: Are you too Young for Insurance?
In this first of a three part mini-series, I interview estate planning advisor Greg Jizmejian to discuss the insurance needs of younger individuals and families; broadly speaking, those between 25 - 40 years old. We discuss what risks are most prevalent and what types of insurance should be considered.
Unlike other products, insurance is something you buy when you don’t need it. It's like a redundancy plan. It provides you with the comfort of knowing that it will be there as a backstop if your main plan falls apart. For example, although many people believe that the biggest reason for home foreclosure is the loss of a job; it’s actually not, it’s disability. In addition to long term disability insurance, we also look at critical illness insurance options and how they compare. It's important to understand the distinctions between different types of long term disability because there are so many grey areas. We discuss why and how as an employee, your company’s group benefits plans would differ from the long term disability insurance you get on your own. Of particular interest to professionals is understanding what type is best suited for them.
Greg goes on to compare critical illness insurance to long term disability insurance. What CI pays, when it pays, what you can use it for and also how Covid-19 impacts critical illness. Doing a proper needs analysis is key to determining the types and amounts of coverage that make sense for each individual. It should be customized. And the good news is, a needs analysis really doesn’t take a lot of time or effort to do.
Contrary to popular belief, Greg discusses why a young person with no debt and no family might need to get life insurance. He uses his own daughter as an example. What some of the benefits are when buying insurance for children. How insurability can be impacted not just by health but also occupation and where you live or work.
For those with mortgages, you’ve likely been introduced to the concept of mortgage insurance. Greg compares taking out insurance at the bank vs on your own. He discusses why he thinks that these types of insurance are not the best in most cases.
Links Protecting All That Is Yours
Episode 11: Understanding Registered Accounts
With so many different types of accounts and confusing acronyms, trying to navigate the maze of account options and create a strategy that makes sense for you can be overwhelming. In today’s show we’re going to put an end to that.
For the most part, in Canada all accounts are divided into two categories -- registered or non-registered. The major difference is that government-registered plans and accounts let you grow your savings tax-sheltered. Non-registered investment accounts like cash accounts don’t.
In this episode we’re going to focus in on the major types of registered accounts as opposed to non-registered. These will include different types of RRSPs and RRIF’s, Tax-Free Savings Account (TFSA) and Registered Education Savings Plans (RESP).
You’ll learn what these plans are, how they work and who they benefit. I’ll also let you in on some key benefits you may not be aware of and little-known tips on how to make them work even harder for you.
Below are my four biggest takeaways from today’s podcast:
- In my opinion, the most ideal situation would be one in which an investor owns both registered and non-registered accounts. This allows you to max out your registered accounts - RRSP, TFSA and RESP and then if you still have funds left over, you can invest within a non-registered account.
- If you’re a young person with an entry-level salary it’s usually best to maximize your TFSA before contributing to an RRSP (except in a scenario where you have an employer-matching pension plan or group RRSP to take advantage of). Unused RRSP contribution room can be carried forward, so let the RRSP contribution room build up and then, when you start making more money and are in a higher tax-bracket, contribute to the RRSP. If the funds aren’t available, the money in a TFSA can be used for RRSP contributions.
- Once you have children, open an RESP as soon as possible to start collecting those RESP grants. The government is giving you free money. And who doesn’t like free money? And if you have more than one child, set up a family RESP with all kids as beneficiaries.
- Finally, be sure to designate a beneficiary for each of your registered accounts. RRSPs, TFSAs and RRIF’s can all rollover tax-free to a spouse or common-law partner.
Episode 10: All About RRSPs
In today’s episode, we’re going to talk about Registered Retirement Savings Plans (RRSPs). While many people regularly contribute to their RRSP, they don’t always know all the benefits of having one, or other ways they could be leveraging it. So today, I’m going to break it all down for you. We’ll cover:
- What they are
- How they work
- Who they benefit, and
- Why you should consider one.
I’m also sharing some smart ways you can leverage an RRSP that you may not know
- Using your RRSP to help pay for your first home.
- Using your RRSP to help pay for your education.
- Using your RRSP to allow incoming-splitting in retirement to reduce taxes.
- Why using your RRSP refund to contribute to your TFSA is a smart strategy.
- When it makes sense to carry forward your RRSP contribution room.
- In the year you turn 71 you need to convert your RRSP to a RRIF. If you're still working, it may make sense to overcontribute to the RRSP and pay a penalty when it will create an additional tax deduction.
Helpful tools and resources:
Who can participate in a Lifelong Learning Plan link
Rules for using unused RRSP contributions link
My latest blog post about RRSPs link
10 ways to grow your RRSP link
Episode 009: Money and Marriage
In today’s episode we cover a wide range of topics as they relate to how someone’s relationship with money can impact their relationships with others. When it comes to a friendship, differences in attitudes towards spending and saving may not be a deal breaker. But when those differences arise in a couple, they can be. Topics we look at include:
- Why people find it so difficult to talk about money.
- Why money is a leading cause for divorce
- Tips on mistakes to avoid
- What you can do to ensure healthy conversations about money
A major reason couples don’t talk about money has to do with the shame attached to it. Shame can come from:
- Financial mistakes made in the past.
- Carrying a lot of debt
- Big differences in income
Money plays such a big role in so many parts of our lives - where we live, trips we take, cars we drive, the jobs we take and the way we spend in general. The differences in how people view money can be a major stressor and far too often it boils down to a lack of communication. People talk about so many other things before talking about money. Couples need to make money conversations a priority and we provide a discussion guide to help. In the episode we use a real life case study of a couple in their early thirties we worked with. We delve into how their different upbringings resulted in friction in their relationship.
The first step we took was getting them to talk about the concerns they had. We had them focus on priorities and life goals rather than finances and budgets. By focusing on shared priorities, it’s easier for each person to determine the areas they are willing to compromise on. It’s also important for both people in a relationship to know what the scope of their finances are. Clarity provides comfort.
Tips to make the conversations easier:
- Don’t dive into a money talk right off the bat
- Start with a broader conversation about goals, values and future plans. Talking openly about the type of lifestyle you want will help to ensure you’re both on the same page for the long term.
- Take a step back and commit to listening to your partner and finding a middle ground.
- Focus on one shared goal at time.
- Consider a money coach or financial advisor to help facilitate the conversation and clarify goals.
- Don’t keep secrets.
- Don’t expect your partner to have same goals
- Agree on shared goals and figure out how to reach them together. This takes the conversation away from dollars and towards something with a deeper meaning.
A financial discussion guide for couples. LINK
Episode 008: Considering Divorce? What you should know
In this episode, Mark interviews divorce mediator, Rosanna Breitman. Rosanna recently wrote an eBook titled The Seven Crucial Steps to Take Before Saying I Want a Divorce. Mark and Rosanna discuss both the financial and emotional impacts of divorce, how media works and why the holistic process she utilizes benefits divorcing couples and their children.
eBook: The Seven Crucial Steps to Take Before Saying I Want a Divorce
Email - Rosannabreitman@gmail.com
Episode 007: Ten resolutions for 2021
As we move into 2021, it’s a tradition to come up with resolutions. But instead of hauling out those familiar New Year’s resolutions about eating less and exercising more, Mark discusses steps to improve your fiscal health. He provides ten suggested resolutions that, if followed, will go a long way toward helping to ensure that your later years will be financially secure.
Episode 006: Get out of debt in four (or five) easy steps
In this episode Mark starts by looking at debt in general and explains the difference between good debt to bad debt. Mark then takes listeners through the steps to get out of debt and stay that way.
Dave Ramsey – Snowball method
Debt service ratio calculator
Episode 005: Budgeting is not a four letter word
Having a budget (or detailed spending plan) is the most effective and arguably the quickest way to make your money goals a reality! Whether your goal is to get out of debt, build an emergency fund, save for retirement, or if you’re like most people, there are several goals that you’re working towards, a budget can help you get there. Whether you’re just starting out or you’re in retirement, creating a budget will allow you to take control of your finances and will set you on the path to achieving your goals. In this episode, Mark will take you through the steps to get started – it’s a lot easier than you might think.
Resource: Your detailed budget worksheet
Episode 004: A Financial Plan in Six Easy Steps
In this podcast, Mark walks you through 6 steps to help you create a financial plan that will turn your goals into action. It is equally valuable for those just starting out as it is for those nearing retirement or already in retirement. The goals may be different, but the process is the same.
Episode 003: Financial Discovery
In this episode, you’ll learn how to marry your goals, hopes and dreams with your current and expected financial situation to create a roadmap for the future. Mark covers things like:
- How to accurately evaluate your current financial situation
- Understanding assets and liabilities
- Calculating your net worth
- Creating a personal income statement
- How needs and wants fit into your plan
- Filling in the financial gaps
- Build your financial plan LINK
Episode 002: Goals Discovery
In this episode, Mark explains why it’s so important to have a plan at any stage and how to get started. He talks about why retirement planning calculators don’t work. He provides an overview of the 3-D financial planning process used at Living Richer Wealth Management. And in easy-to-understand terms, he’ll walk you through the first steps to building your own plan – the same steps he takes his own clients through.
If you want to create a financial plan but don’t know where to begin, or if you have a plan that you worry isn’t going to get you to where you want to go, this episode is for you.
Link to Values Map
Episode 001: Introductory Episode
In this introductory episode, Mark will tell you a little more about the Living Richer podcast and what to expect in future episodes. He’ll explain how knowing ‘your why’ is the starting point to any successful financial plan and give you tips to get started on your own. Have a listen, we hope you’ll like what you hear.
Simon Sinek video https://www.youtube.com/watch?v=IPYeCltXpxw