Managing family wealth

When people think of insurance, they usually think about home, auto and life insurance. But insurance can also help you enhance and protect your family’s wealth.

Here are three ways insurance can help provide financial peace of mind for you and your family.

It’s important to know that your family would be financially secure if you became unable to earn an income due to illness or disability, or if you passed away prematurely.

Critical illness insurance can provide a lump-sum payment to help with your family’s day-to-day financial needs, and cover any extra health-care costs not covered by the government, while you focus on getting better.
Life insurance can help create wealth that you would have otherwise created if you hadn’t passed away.

The funds can be used in any way your family needs – to help with mortgage and other debt payments, to fund your children’s education costs, or to cover daily living expenses.

You are probably familiar with Benjamin Franklin’s famous quote, “In this world nothing can be said to be certain, except death and taxes.” Unfortunately, death and taxes often go hand in hand.

While you can pass along your assets tax-free to your surviving spouse, most people can’t pass them along to anyone else without triggering taxes.

Unless you have a surviving spouse, there is a “deemed disposition” of your assets at death.

In other words, the government considers your assets – whether they have really been sold or not – to have been disposed of at fair market value, triggering the associated income taxes.

Everything from stocks and bonds held outside your registered retirement plans to the family cottage may be taxable in the hands of your beneficiaries. Any remaining funds in your registered plans are also taxable on your final tax return – nearly half could go to the taxman.

Gord Keesic is a Lac Seul band member and an Investment Advisor with RBC Dominion Securities Inc in Thunder Bay. Member CIPF. This article is for information purposes only. Please consult with a professional advisor before taking any action based on information in this article.