Skip to content

Posts from the ‘Corporate Insurance’ Category

12
Dec

The Corporate Estate Transfer

If you are the owner of a successful company it is likely that you have retained profits or surplus cash in your corporation.  If this is the case, chances are also good that this invested surplus is exposed to a high rate of corporate income tax.  If this describes your company then you may be a candidate for the Corporate Estate Transfer.  This strategy provides tax sheltered growth as well as maximizing the estate value of your company upon your death.

What is a Corporate Estate Transfer?

The Corporate Estate Transfer is an arrangement in which the company purchases a tax exempt life insurance policy on the life of the shareholder using corporate funds that are not needed for immediate business purposes. In doing so, the transferred surplus grows tax-deferred while the death benefit of the life insurance policy increases the value to the estate when the shareholder dies. Read more »

Facebook Twitter Email Linkedin
15
Aug

Family Business Planning Strategies

67% are at Risk of Succession Failure

If you are an owner in a family enterprise, the chances of your business transitioning successfully to the next generations is not very good.  This has not changed over the years. Statistics show a failure rate of:

  • 67% of businesses fail to succeed into the second generation
  • 90% fail by the third generation

With 80% to 90% of all enterprises in North America being family owned, it is important to address the reasons why transition is difficult. Read more »

Facebook Twitter Email Linkedin
9
May

The Clock is Ticking!

Don’t Put Off Your Decision to Buy Life Insurance

2016 is an opportune year to buy life insurance.  New laws affecting the taxation of life insurance come into effect on January 1, 2017. After this date new policies will not perform as well as they do currently.

The good news is that the proceeds of life insurance policies paid at death still remain tax free.  What has been affected is the amount of cash value that may accrue in a policy and the tax-free distribution of death proceeds from a life insurance policy owned in a corporation.

How will this impact your existing and future policies?

Adjustment to the Maximum Tax Actuarial Reserve

Whole Life and Universal Life policies are valuable vehicles in which to accumulate cash value. The limit of how much can be invested is governed by the Maximum Tax Actuarial Reserve (MTAR).  If the cash value ever exceeds the MTAR limit, the policy is deemed to be “offside” and will be subject to accrual taxation. Read more »

Facebook Twitter Email Linkedin
10
Jun

Get Your Corporate Dollars Doing Double Duty

Owners of very successful private corporations are intimately aware of the importance of cash flow.  Many are very protective of how they allocate corporate capital so that business ventures are adequately funded and investment opportunities are not missed.  An Immediate Financing Arrangement offers an opportunity to provide life insurance coverage and accumulate wealth on a tax-advantaged basis without impairing corporate cash flow.

What is an Immediate Financing Arrangement (IFA)?

An IFA is a financial and estate planning strategy that:

  • Combines permanent, cash value life insurance with a conservative leverage program allowing the dollars allocated to the life insurance premiums to do double duty by still being available for business and investment purposes.;
  • In the right circumstances and when structured properly so that all possible tax deductions are used, an improvement in cash flow could result. Read more »
Facebook Twitter Email Linkedin