Asset Preservation

• Registered Asset Preservation Plan
• Estate Preservation Plan
• Trusts for Protection and Tax Savings
• Charitable Giving
• Critical Illness
• Cottage Planning

Estate & Insurance Services

Registered Asset Preservation Plan
Without planning, it is possible that the Canada Customs and Revenue Agency could be the beneficiary of up to half of your estate. In fact, if you fall within the highest marginal tax rates, your estate could lose half of the value of your RRSP or RRIF.

Typical Scenario
You are already receiving RRIF or RRSP income beyond your current needs; your future income requirements will be covered through pension and investment income. You are also interested in preserving the balance of your RRIF or RRSP for your estate or family on death.

Facts:

• At your death, the fair market value of your RRSP or RRIF is included as income on your final tax return and may be subject to the highest marginal tax rate.
• If your spouse is the named beneficiary of your RRSP or RRIF, a tax-free rollover is available to your surviving spouse.
• At your surviving spouse's death any remaining value is fully taxable as income in his or her final tax return.

Clearly, this scenario illustrates the need to preserve capital. Life insurance may be the ideal preservation plan to protect the value of your registered assets.

Life Insurance Solution
Life insurance may provide you with the potential to leverage small premium payments into greater estate benefits. Assuming you are insurable, you can purchase enough life insurance to cover the value of your RRSP or RRIF portfolio. Ideally, life insurance is suited to individuals who have surplus income in retirement and who wish to maximize the value of their assets tax-free to their beneficiaries.

For most people, the annual cost of insuring their life for an amount equal to the value of their RRSP or RRIF can be quite reasonable. In many cases, the cost of preserving your RRSP or RRIF capital, notwithstanding the income tax payable, can be as low as 1 per cent per year of the value of your RRSP or RRIF.

For more information, contact an Investment Advisor at a BMO Nesbitt Burns branch near you who will be pleased to introduce you to an Estate and Insurance Advisor.

If you would like a BMO Nesbitt Burns Investment Advisor to contact you, simply complete this brief contact form.

Note: All insurance products are offered through BMO Nesbitt Burns Financial Services Inc. by licensed life insurance agents, and, in Quebec, by financial security advisors.