INVESTING IN A LIFE INSURNACE COMPANY The benefits of an insurance GIC* *An insurance GIC is an accumulation annuity issued by a life insurance company

My disclaimer I am knowledgeable in Estate Planning techniques and concepts I Do understand the big picture and can help explain it I am NOT a tax expert I am NOT a legal expert

What we can learn today 1.Estate planning and probate 2.Understanding your intentions 3.Issues that can arise with your Estate 4.Understanding how an insurance company can help

Estate planning and probate What is estate planning and how can it help? Estate planning is the anticipating and arranging for the distribution of an estate It can eliminate uncertainties It can help maximize the value of the estate What is probate? administration of the deceased estate distributing property

How does a bank GIC work? Bank GIC Estate Beneficiary

Problems going through your estate 1. Lengthy 2. Expensive 3. Public

Wouldn’t it be nice to skip the estate? Assets Estate Beneficiary

What generally happens House Bank account RRSP/RRIF Non-registered assets Passed easily to spouse When the first spouse passes away...

What generally happens When the second spouse passes away… House Bank account RRSP/RRIF Non-registered assets Sold - assets to the estate Frozen - assets to the estate Sold & taxed - assets to the estate

What’s the solution? Insurance GIC Estate Beneficiary Bank GIC Estate Beneficiary

What is an insurance GIC? * For more information, please visit Guaranteed interest investment Can only be offered by an Insurance company Similar to bank GICs but with perks –Beneficiary designation available on both registered and non-registered investments –Coverage from Assuris* –Potential creditor protection –Payout annuity option available –Redeemable –Pension tax credit

Case study Aunt Susan wants to leave a gift behind for her favourite niece and nephew GIC at her local bank for Steve Insurance GIC at her life insurance company for Carol

Steve’s story Notified of aunts passing & of GIC left to him Day 1Day 90 Estate has been assessed Day 210 Details of the handling of the estate shared Day 217 Will is contested Day 365 Dispute is resolved and the estate is distributed The timeline: The cost: Bank GIC $50,000 - Bank discharge$ 4,550 - Probate fee$ Executor fee$ 5,000 Steve’s inheritance $40,000 Time taken to distribute inheritance Time passed after receiving inheritance

Carol’s story Notified of aunts passing & of insurance GIC left to her Day 1 Day 5 Carol contacts the insurance company & receives required form to complete Day 14 Carol receives proceeds of the insurance GIC The cost: The timeline: Time taken to distribute inheritance Time passed after receiving inheritance GIC / AA$50,000 - Bank dischargen/a - Probate feen/a - Executor feen/a Carol’s inheritance $50,000

The moral of our story Steve Took 12 months to receive inheritance Only received $40,000 of the intended $50,000 Carol Received inheritance in two weeks Received full amount - intended $50,000

Insurance GIC It all starts with this… Estate Beneficiary

Summary Non-registered money with a life insurance company: Reduces estate costs Speeds up the process Goes to the beneficiary Provides more privacy

Questions ? ?