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Daren Givoque, Financial Advisor O’Farrell Wealth & Estate Planning | Assante Capital Management Ltd. As a Financial Advisor I help clients with estate planning, which includes identifying their assets and determining how the assets will be transferred to their heirs when they pass away. Recently, I was helping one of my clients, Brian, gather the items he needed to build a solid plan for his estate. While reviewing his assets, Brian mentioned that he had money tied up in cryptocurrency. He wondered how to ensure these assets would be transferred to his wife and kids. Cryptocurrency has been on the market for the past decade, starting with Bitcoin in 2009. According to capital.com there are over 3000 types of digital currencies in existence, grouped into three categories: altcoins, tokens, and Bitcoin. Simply stated, cryptocurrency is an internet-based financial transaction between two parties, using digital cash. Once a cryptocurrency account is created, a private digital key is generated. Only the owner has access to the key and the funds in the account. Storing the key safely is essential for maintaining the account’s security and ensuring the owner continues to have access to the funds. I told Brain that we could address cryptocurrency in his estate plan in two ways: Treat cryptocurrency like any other digital asset (online trading accounts) and draft authorization in the will/POA for the executor or attorney to deal with the account; or Create a separate memorandum identifying the type of cryptocurrency held, and where it is stored. I recommend this route because, if the private key information is in the will itself, it becomes part of the public record through the probate process, potentially exposing sensitive information that could put the asset at risk. Since anyone with the private key can access a cryptocurrency account, it is important to store it securely. I recommended that Brian use a third-party service to manage his private key, entrust it to a family member or advisor, or keep it on a thumb drive in a safety deposit box to ensure the cryptocurrency can be accessed by executors, attorneys and/or heirs. A more unconventional option is something called a “dead man’s switch”— an automated program that emails the user at specific times. If it doesn’t hear back, it will check death records and, if you have died, will transfer the value of your cryptocurrency into a specified account. This can be anyone but is often the account of the executor, who will oversee the distribution of the estate to any heirs. Cryptocurrency is a unique asset and I understand the nuances and complexities of planning how to pass it on to the next generation safely and effectively. I was able to work with Brian to create a plan that he was comfortable with and that would ensure the value of his cryptocurrency will be transferred to his loved ones.

Sarah Chisholm, Financial Advisor O’Farrell Wealth & Estate Planning | Assante Capital Management Ltd. Grab your favourite cup of tea or coffee and let us protect your Wealth Plan. In addition to building assets and reducing debts, a comprehensive Wealth Plan should provide risk mitigation. Your wealth is growing – you are building your retirement equity in RRSP, TFSA, rental properties, business ventures and perhaps workplace pensions. You have an income that supports your lifestyle expenses including mortgages, car payments, vacations, and retirement savings. Have you considered what happens if you become sick or injured? How do you continue to fund your lifestyle and grow your wealth? If you are currently 35 years old and are making $50,000 per year, you will be generating $1,500,000 of income over the next 30 years! Is your ability to earn an income protected? The good news is that you may already have some level of protection against illness or injury. In Ontario, the Workplace Safety Insurance Board provides coverage for work-related illness and injuries, providing income replacement until you can return to work. Not all industries, however, are covered through WSIB. Employment Insurance may also be an option. If you meet the required number of hours in the 52-week timeframe you could be eligible for 15 weeks of taxable benefits after a 2-week waiting period. EI comes in as a taxable benefit and is based on a percentage of your income. You would receive 55% of your weekly paycheque, up to a maximum of $595 per week. For the self-employed there are very specific requirements to meet to be eligible for EI. Canada Pension Plan Disability Benefit is a monthly payment available to those who have a severe and prolonged disability. A doctor must sign off on a portion of the application. The candidate must also meet CPP contribution requirements based on a six-year timeframe. The maximum monthly payment in 2021 is $1,413; however, the amount received is based on past CPP contributions and the average received is only $1,031. You may also have coverage through other plans including creditor insurance, auto-insurance, critical illness policies. Finally, you may also have coverage through a group disability insurance policy or an individually owned disability policy. Depending on the specific policy, multiple factors could change; your start date for coverage, is your coverage taxable or non-taxable, how long does the coverage last, does the coverage exclude any conditions, and is there a refund of premium option. The possibilities may seem overwhelming, but your Financial Advisor can help you explore all the options, identify any gaps in your plan, and provide recommendations on how to strengthen the risk mitigation portion of your Wealth Plan.

Cyndy Batchelor & Sarah Chisholm, Financial Advisor O’Farrell Wealth & Estate Planning | Assante Capital Management Ltd. Q: What is the difference between Term Life Insurance and Whole Life Insurance? A: Term Life Insurance is insurance you take out for a specific term and cost. Once the term expires, the cost of term insurance increases or you can choose to let the policy expire. Whole Life or permanent insurance does not expire if you continue to make your premium payments. With Whole Life insurance, some of your premium goes towards purchasing an investment component held within your policy. Depending on the type of Whole Life insurance you purchase, this can increase the value of your death benefit. Q: In what instance would Term Life Insurance be a good choice for me? A: Term insurance can be a great value for your money. Scenarios in which you would want term insurance would be for mortgage coverage, child support, or income replacement. Term Insurance helps to pay out your liabilities and debts should the unthinkable happen. Term products available include Term10, Term20, Term30, and Termto65. It is important to review these options with your Insurance Advisor who will complete a Needs Analysis to determine an appropriate amount of coverage and length of term. Q: I have heard about Whole Life Insurance helping with tax savings. How could this help me? A: In Canada insurance proceeds flow through to your beneficiaries’ tax free. Outside of spousal rollovers, the only other assets that pass tax free to your beneficiaries are your primary residence and your TFSA account. Like a TFSA, the cash value in a Whole Life policy grows tax free, so you can use insurance premiums to shift investable assets from a taxable account into life insurance. Is your TFSA is maxed out, do you have sizable RRSPs, a pension and outside Non-Registered Investments? When you and your spouse begin collecting CPP and OAS you will likely face an OAS claw back due to your income levels. A Whole Life Estate strategy can help to preserve your assets in a tax-sheltered investment, allowing you to smooth your income, save your OAS, lower your annual taxes and at the last death, lower your estate taxes. Your Advisor can work with you to review your Wealth Plan and determine if Whole Life Insurance is a fit for you. Insurance products and services are provided through Assante Estate and Insurance Services Inc.

Sarah Chisholm, Financial Advisor O’Farrell Wealth & Estate Planning | Assante Capital Management Ltd. Grab your favourite cup of tea or coffee and let us look at Wealth Plans. A comprehensive Wealth Plan should incorporate all your assets, liabilities, and sources of income, not only your investment accounts. Your wealth portfolio can include any of the following investment accounts: RRSPs, TFSAs, and Non-Registered Accounts. These types of accounts are typically invested in mutual funds, ETFs, stocks, and/or bonds with the goal of using the funds for retirement or major expenses. When was the last time you reviewed your portfolios? Next, let us look at other potential sources of wealth. Rental properties should be included in your Wealth Plan. While income properties come with tenant challenges, increased debt obligations, and maintenance requirements, an income property can generate consistent cash flow and long-term equity growth. As your equity in one property grows, you may consider leveraging that equity to purchase a second or third rental property. It is important to note that the growth on your income property is considered a taxable capital gain. Have you built those taxes into your Wealth Plan? For farmers, the land can also be used as a source of wealth with cash crop or rental income and growing equity. If you wish to pass the land to a child, make sure to work with your Financial Advisor and an accountant on Wealth Plan. They can help implement strategies to make the land eligible as qualified farm property instead of just rental land. This is important because Qualified Farm Property can be eligible for a tax-free rollover which defers the taxes payable to the next generation. For business owners your biggest assets are the ability to generate profits in your business and future growth of the company. If you are re-investing most of your profits, make sure your business is well positioned for an eventual sale. Your Financial Advisor can help you determine how to maximize the value of a sale to a third-party, pass it on to a child in the most tax effective way and the tax liabilities surrounding the sale. As you are growing your business, it is important to plan for your exit. If the future sale value of the business is negligible, make sure you are drawing enough income out of the business to fund your retirement. Finally, you cannot build your wealth if you are burdened by consumer debts. Credit cards charge exorbitant interest rates. Get serious and implement strategies to pay down your debt and help grow your overall wealth. Building all these assets, strategies, and liabilities into your Wealth Plan will give you a clearer picture of where you stand currently and allow you and your advisor to make a plan for your future wealth.

Cyndy Batchelor, Financial Advisor O’Farrell Wealth & Estate Planning | Assante Capital Management Ltd. If you have managed to save some money over the past year and want to know where to invest it in tax efficient manner, here are a few things to consider before making that decision. Q: If I have not contributed to a TFSA in the past how much can I put in today? The TFSA limit for 2021 is an additional $6,000 for a total of $75,500. If you have never contributed, you may contribute the entire $75,500 (if you were born before 1991). If you have contributed in the past and made withdrawals prior to 2021, you may contribute any unused room you have plus any withdrawals you made – to confirm the amount, you can verify with your MyCRA account or TIPS at 1-800-267-6999. Q: Do the Investment Income and Earnings in my TFSA affect my contribution room? A: No, investment income and changes in the value of your TFSA do not affect the contribution room of your TFSA. Q: When will I need the money? A: Are you investing this for a short-term goal, like buying a car or a vacation next year or is this part of your overall retirement plan? A great advantage of a TFSA is it’s tax free status – so if you are able to use it as a long term retirement strategy, there are potential tax savings in other areas of your financial plan. Q: What can I invest my TFSA in? A: Like an RRSP, you are able to invest your TFSA in just about anything, including mutual funds, stocks, bonds, ETFs and cash or high interest savings products. Your TFSA is not necessarily just a “Savings Account”. Depending on your risk tolerance and your overall wealth plan you and your financial advisor can determine the best investment strategy for your TFSA funds.

Cyndy Batchelor, Financial Advisor O’Farrell Wealth & Estate Planning | Assante Capital Management Ltd. Q: What is an RRSP? A: An RRSP is a Registered Retirement Savings Plan. A deposit into an RRSP will reduce your taxable income for the year while allowing you to build your own personal “pension plan” for retirement. Q: How much can I contribute to my RRSP? A: Up to 18% of your income to a maximum of $27,830 for tax year 2020. However, if you did not max out your contributions in previous years you can catch up. Your Notice of Assessment will tell you your RRSP limit. Q: Should I use a RRSP or a TFSA? A: One of the differences between an RRSP and a TFSA (Tax Free Savings Account) is that a RRSP contribution gives you a tax break when you contribute. Where do you put your savings first? If you are just starting out and earning less, saving in a TFSA may be more prudent. Plus, when you retire the money you saved in your TFSA is not considered income – so it will not affect your taxes. As your income grows you can switch to a RRSP to take advantage of the tax break. If you have more questions, please reach out to us!

Daren Givoque, Financial Advisor O’Farrell Wealth & Estate Planning | Assante Capital Management Ltd. In January 2018, the Canadian government put the new tax on split income (TOSI) rules into effect which caused many business owners to have to rethink how to withdraw money from their corporations. After the new rules came into play a client of mine came to me, unsure of how he could withdraw money from his business without paying tons of tax with the new TOSI rules. Before the change in legislation he was taking advantage of income sprinkling by including his wife and two young children as shareholders in the business so he could pay them each a salary and reduce his family’s overall tax bill. The new TOSI rules meant that in order to continue to do this he would have to prove that the salary being paid to his wife and children were reasonable related to the job they were doing associated with the business. His children were still too young to play an active role in the company and his wife was busy at home with the children and her own small business. In short, there was no way to ever claim that the money being paid out to his family was fair under the new rules. Now that it was clear that he had to reorganize how he withdraw money from his company, he was unsure of how to protect his money from heavy taxation and save for the future. It is true. There is no longer a straightforward way for business owners like my client to withdraw money from their corporation without being heavily taxed. However, I was able to let him know that there is still one great product out there that could help him protect his money from being taxed heavily. Life Insurance. It may seem strange but buying certain types of life insurance can help you withdraw money from the corporation and shelter it in a tax-free environment. It is essentially a tax-free savings account for businesses. So how does this all work? Normally excess corporate profits stay trapped within the company. If the money sits idle and doesn’t earn anything there will be no growth to tax, but if it is passively invested and the gains are not directly attributable to the active growth of the company it will be subject to aggressive taxation. With tax-exempt life insurance there is a way to shelter your surplus as a corporate investment. The main types of tax-exempt life insurance policies are Whole Life insurance, Universal Life insurance and Universal Life insurance with guaranteed investments. The difference between these products and regular term life insurance is that they include a cash value, which is essentially a savings component. At the end of the day money that has been invested and the growth within the savings portion of the life insurance policy can flow to the business owner tax-free when they choose or to their heirs in a very tax efficient way on their estate. It is important to note that this is a long-term game and should be considered for retirement or long- term cash flow for the company. Insurance is a great investment for corporations, but it is 10-15 year commitment. Business owners who invest money in life insurance products should be comfortable with have limited ability to access it in the first five years. Any tax-exempt life insurance products can be used as a tax-shelter. The best one for you will depend on your unique situation. Talk to an advisor to see how your can use life insurance to your advantage and save your hard-earned money from taxation.

Daren Givoque, CDFA, Financial Advisor O’Farrell Wealth & Estate Planning | Assante Capital Management Ltd. In the first two articles in this series I talked about the first two mistakes I see when planning for retirement. The first one talked about how delaying liquidating your RRSPs could cost you money in the long run. The second was about using your TFSA effectively to save for retirement. So, what happens if you are doing everything right? You melt down your RRSPs, are using the TFSA effectively, own your home which is not taxable. Is there anywhere else to shelter money for retirement? Many people don’t realize it, but certain types of insurance can act as an investment to save for the future. Whole Life insurance offered by companies like The Great-West Life Assurance Company, London Life and Canada Life have an investment portion that remains tax-free as it is sheltered in a life insurance policy. In simple terms you have the ability to overpay the premiums and have that money invested by the insurance company and allow it to grow in a tax-sheltered environment. Many of the large insurance company’s whole life dividend scales on their participating accounts have actually beat the stock market over the *past 20 years with next to no volatility. You can also pass the policy on to future generations which makes it a great way to pass money on to your children or grandchildren. Unlike Term Life insurance, whole life insurance guarantees you a payout not matter when you die. Whole life insurance is not for everyone as the premiums can be expensive depending on the size of the benefit. However, it is a great option for people who find they have maxed out all other tax-free savings options. People who really understand insurance know how effective it can be as an avenue for savings. As I have mentioned before there is no cookie-cutter approach to saving for the future. *Great West Life Financial Facts 2018 https://www.greatwestlife.com/content/dam/gwl/documents/s7_000336_Financial-Facts.pdf

Daren Givoque, CDFA, Financial Advisor O’Farrell Wealth & Estate Planning | Assante Capital Management Ltd. In a previous article I spoke about the first of 3 big mistakes that people often make when planning for retirement: delaying liquidating RRSPs. To recap in short, it will often save you tax to start withdrawing money from your RRSPs early instead of waiting until the government makes you start taking it out at age 72. The second mistake that I often see with people when planning for retirement is not using their Tax-Free Savings Account (TFSA) effectively. TFSAs came into effect in Canada on January 1, 2009. The maximum annual contribution room for each year prior to 2013 was $5000. Beginning in 2013 it was increased to $5,500 per year. This $500 increase is meant to happen every year to account for inflation. In 2015 the federal government raised the amount to $10,000 but it was dropped back down to $5,500 after the election. The amount you can put into your TFSA is cumulative, meaning that if you started your TFSA after 2009 you have room to put the maximum amount allowed into the account for each of the years you missed out on. In 2020 the total cumulative contribution room for a TFSA is $-69,500. TFSAs are a great tool, but I don’t like the name. Used effectively it is not a savings account, it is an investment account. TFSAs can hold all sorts of investments including mutual funds, GICs, Stocks, Bonds, ETFs and more. TFSAs may be used aggressively depending on your personal situation. Money made on investments are not taxable, making it a great avenue to save for retirement. If you need to withdraw money from your TFSA to pay for current expenses the room is also always there for you to fill it back up. There it is. Mistake number 2.

Daren Givoque, CDFA, Financial Advisor O’Farrell Wealth & Estate Planning | Assante Capital Management Ltd. There are many things to think about when it comes to retirement. How am I going to fill my time? What type of lifestyle do I want to enjoy? And most importantly – How am I going to pay for it? After being a financial advisor for many years I have learned a lot about how to guide people in the right direction financially when it comes to retirement. Unfortunately, there are still some major pitfalls that people fall into when planning for retirement that can generally be avoided. Three big ones come to mind. Over the next few weeks I will be going over the top three mistakes that people make when planning for retirement. Hopefully this will help you avoid them and ensure that you have the money you need to finance the retirement that you want. If I asked you what your biggest expense is what would you say? Your mortgage or car payment may come to mind. What would you say if I told you that your biggest expense is actually tax? Many people forget about it because it is worked into your expenses in incremental amounts. However, in *2016 the average Canadian family (including single Canadians) who earned $83,105 in income paid $35,283 in tax. That’s 44% of your income going to taxes! In Canada almost everything is taxable. This includes your pension, salary, cottage, rental properties, RRSPs and RIFs, investment returns, the sale of a business and more. There are only three things in Canada that are considered tax free: your primary homes increase in value, your TFSA and insurance. Now there are a few others like the lottery, inherited gifts and exemptions for business owners, but these are unique and not easy to plan with. Now that you know what is taxable and not taxable are you using it to your advantage to save for retirement? This brings me to: Mistake #1 - Delaying using you RRSPs The whole idea behind RRSPs is to help you save for retirement in a tax-sheltered way. The money is only taxed once you start withdrawing it as income when you retire. The idea is that at this point you will be in a lower tax bracket and pay less tax on your withdrawals. At age 71 you must convert your RRSP into a Registered Retirement Income Fund (RRIF) and start to withdraw money. Many people wait until the last minute to start withdrawing money from their RRSPs but it many cases this doesn’t make sense tax-wise. The reality is every year you delay liquidating your RRSPs the government increases the percentage of tax you need to pay on it. By the time you are 80 you will be paying more tax than you would have if you started withdrawing money at age 65. Also, if you die and don’t have a spouse there is no one you can leave the money in your RRSP to tax-free. The day you die the entirety of your RRSP must be cashed out and if you have a lot of money left, it will be taxed at a high rate. For example, an RRSP that still has $340,000 left in it will be taxed at a 50% marginal tax bracket which means you will be losing half your savings. When planning for retirement it’s a good idea figure out the optimal age to start withdrawing money from your RRSPs to save the most tax. Unfortunately, there is no cookie-cutter approach. A qualified financial advisor will be able to look at your savings and retirement income and help you pinpoint the best course of action. There you have it. Mistake #1 when planning for retirement. * Taxes versus the Necessities of Life: The Canadian Consumer Tax Index, 2019 edition https://www.fraserinstitute.org/

Daren Givoque, Financial Advisor O’Farrell Wealth & Estate Planning | Assante Capital Management Ltd. Any successful business person will know what their target market is. Knowing your customer is one of the most important things when it comes to creating effective marketing plans. These days however many businesses are taking it one step further. Niche marketing is being used by business people to hone in on their specialty and ensure that they are delivering a targeted, quality product to the right people. Here are some of the reasons you should think about finding your own niche and some useful strategies on how to do so. How does niche marketing differ from your target market? Finding your target market is an important first step to take before you settle into your niche. Your target market is the specific group of people you work for i.e. mothers with small children, middle aged business people, dog owners. Your niche is the service you specialize in offering to your target market. If your target market is dog owners a niche might be dog booties for dogs who have sensitive feet. You can see how specific this is and how, with this lens you would be able to develop a quality product that solves a specific problem for the people in your niche. You can become an expert in your field When you develop a niche, it is easier for you to become an expert in your field. With your specific focus you can build your knowledge base and use it to gain leverage over your competitors. Becoming the expert is a valuable marketing tool. Let’s take the dog bootie example again for a moment. Wouldn’t you rather buy dog boots off a company who has proven knowledge about canine paws and materials that will make the boots warm and withstand the cold, ice and snow? Sounds like a more quality product and something that you can put your trust into doesn’t it. That’s the power of being the expert and niche marketing allows you to be that without spreading yourself too thin. Lets you work with your ideal client or customer Niche marketing allows you to be so targeted in your marketing that you reach the people that will really appreciate and benefit from your product or service. Rather than having to convince people that they need what you are offering you will be one step ahead of the game, solving a problem that you know they already have. At the end of the day working with people that are grateful for the product or service you offer is a lot more pleasant than having to fight tooth and nail to close a sale. Happy customers equal quality referrals Many business owners fear becoming too specific in what they do because limits them in who they can attract as clients. While casting a wide net is one strategy being more targeted will ensure your work with people who appreciate what you are doing and will pass you name on to other people in their network who may be looking for a similar product or service. Referrals are a great way to get your name out there because it enhances your credibility when you have a network of satisfied customers backing you up. It also costs next to nothing in your marketing budget. Focus on your why In todays market people are looking for the stories behind the products or services they are consuming. The “Why”. As well-known marketing consultant Simon Sinek says, “People don’t buy what you do they buy why you do it.” Figuring out your “why” is a great step in identifying your niche market. Once you figure out why you are providing your product or service and how it benefits your ideal customer it will be easy to figure out a marketing plan that reflects these values. Getting people to buy into your why will ensure you have lifelong clients rather than one-off customers. You will also feel good about doing business because you are living and working in accordance to your own core values. Niche marketing really comes down to this: Would you rather be a small fish in a big pond or a big fish in a small pond? Homing in on what you do best, why you do it and who you would like to work with will not only enhance the customer experience but also make your job more enjoyable and profitable in the long run.

Daren Givoque, Financial Advisor O’Farrell Wealth & Estate Planning | Assante Capital Management Ltd. Let’s face it. Life insurance is not a desirable topic of conversation. This is because it can be expensive, and it only pays out if something bad happens. Who wants to think about that? For business owners though, big or small, there are a few situations where having life insurance can solve some pretty big problems. Here are a few scenarios where life insurance can be an invaluable tool for you and your company. Death of a key person Does your business rely heavily on the work of one or more individuals? What would happen to your business if that personal suddenly became ill or suffered an injury and was no longer able to perform their duties? Key person insurance can help cover day-to-day business expenses and ensure your business can continue on during this difficult time. One great thing about a business purchasing key man insurance is that the premiums are tax deductible. As long as the policy makes sense (i.e. you are not purchasing a $500,000 policy for a debt that is worth $100,000) you will be able to claim it as a business expense on your tax return. Equalizing an estate In the event of your death you will probably want to make sure all your children receive an equal percentage of your estate. If you are a business owner you may have a few of your children working with you, while the others may have chosen a different career path. Instead of leaving shares of the business to all your children, reserve those shares for the children who actually have a stake in the company. A life insurance policy will make sure that you have the cash to equal the value of those shares to give to your children who are not active in the business. This could go a long way to mitigating potential conflict in your family after you pass away. Covering taxes on death Surprisingly, death is the time in your life when you are most heavily taxed. When you pass away you will be deemed to have sold you private company shares. You may be able to claim the lifetime capital gains exemption up to $ 848,252 (in 2018) but you could end up paying 25 per cent tax on anything that falls outside that exemption. Having insurance is a good way to ensure your executor will be able to pay that tax bill upon your death. Providing for your heirs If you are one of many shareholders in your company, having an insurance policy on your life will help provide from them, or the company, once you are gone. Cash from an insurance payout can be used to buy your shares from your estate so your heirs can ultimately benefit from them. If you have left your shares to your family, cash from an insurance payout will allow active stakeholders to buy the shares from your spouse/kids so they get a payout and your business partners maintain control of the business. An excellent investment vehicle Whole life insurance has the benefit of paying out no matter what. If you die at 55 or 105 you will be paid out. It also comes with the added bonus of having an investment side to the policy. By overpaying the premiums, you build up an investment account which is not taxable. This is a great way for business owners and high net-worth individuals to shelter money once their TFSA and RRSPs are maxed out. These investments are tax-free and are available for you to use at any time. This is a great way to both save for retirement or leave a larger sum of money to your children. As a business owner it is a great idea to talk to an insurance professional to find out which insurance products would be the best for your situation. Proper planning will ensure that things both within your business and at home will run smoothly in the event of sickness or death.