Same-Sex Couples Still Face Financial Planning Hurdles

This is World Pride week and Toronto is playing host to thousands of same-sex couples celebrating their march towards equality.  The number of same-sex couples has doubled in Canada in the last ten years, making up almost 1% of all couples.

The LGBTQ (Lesbian, Gay, Bi-Sexual, Trans-Sexual, Queer) community is well on its way towards equality, but there are still some differences that need to be considered when structuring financial plans.

A report by BMO cites several areas LGBTQ couples need to consider:

Changes in employment benefits:  Many large companies in Canada have implemented policies that prohibit discrimination on the basis of sexual orientation.  In fact, 88% of Fortune 500 companies have instituted such policies.  However, 38% of Fortune 500 companies don’t offer domestic partner health insurance benefits to their employees.

Estate Planning - Wills:  Intestacy rules in several provinces; including Ontario; do not provide for same-sex or common-law spouses.  Instead, the assets will be passed on to the closest living relative of the deceased; parents, children, and siblings.  This may leave the common-law spouse fighting for a share of the assets or financial support, especially if the deceased’s family did not approve of the same-sex relationship.  Making sure you have a properly worded will is essential to ensure financial protection to the surviving common-law or same-sex spouse.

Powers of Attorney (POA):  When you draft or update your existing will be sure to include POAs to protect both spouses.  This will allow your trusted partner to make health care and financial decisions on your behalf if you are unable to do so.

Life Insurance:  Insurance is an important part of any financial or estate plan.  Life insurance proceeds pass outside of the will, therefore by naming your common-law or same-sex spouse as beneficiary you will ensure they will be provided for at the time of need.

Progress by Canadian Government

Changes in Old Age Security and the Canada Pension Plan:  It was in 2000 when the benefits and obligations of OAS and CPP were extended to same-sex and common-law couples.  These changes included the availability of survivor benefits for common-law partners of deceased individuals.  As well as the ability to share CPP benefits proportionally to the time spent together.  These programs are important components of retirement planning.

Tax Changes:  The ability to save and defer tax as part of an overall financial plan and/or part of an estate plan became available in 2001, with equality being granted to all Canadians for tax purposes.  The use of income-splitting strategies such as the Spousal RRSP, prescribed-rate loans, pension income splitting and the transfer of certain tax credits between spouses; are all excellent tax saving strategies available to all couples.

As always, if you have any questions or want more information please don’t hesitate to contact me.

Have a great Long Weekend!

Happy Canada Day,

Tracey

Source:  Advisor.ca by staff posted 06-09-2014

What to do if you are a victim of Identity Theft

No matter how cautious we about protecting our personal information; crooks will always come up with creative ways to steal our identity. Whether it was a small personal oversight or an on-line security breach, the important thing is to fix it – and fast.

Unfortunately once your identity is stolen, there is no quick fix.  John Russo, chief privacy officer for Equifax Canada, says many people have no idea their personal information has been compromised until the collection agencies start calling.  “The first thing to do is request a copy of your credit file,” he recommends.  “Review it carefully, and report any discrepancies for investigation and resolution.”

In 2000, Equifax had 7,500 fraud victim notifications on its system; by the end of 2012 they had 28,651.  A consumer must pass through several levels of authentication such as confirming employment information, previous addresses and filing a sworn affidavit with the agency before a fraud alert can be placed on their account.

If you suspect you are a victim of identity theft you should first contact the police and then the Canadian Anti-Fraud Centre, recommends Corporal Tim Laurence of the RCMP Integrated Counterfeit Enforcement Team.   You can get the form online at www.antifraudcentre-centreantifraude.ca.

Russo also points out that each credit-issuing agency has a different procedure; you may need to provide additional information to the creditor’s security department to prove your identity.

An ID monitoring service can take up to three years and 600 hours to restore your identity once it has been stolen.  “The hardest piece to replace is your SIN as it defines you as a Canadian resident and citizen.  You can’t just change it – it is tied to years of personal history.”

In addition; Staff Sergeant Paul Lobsinger, with the Waterloo Region Police fraud squad points out the need to be aware of the terms and conditions concerning the use of your debit card PIN, and whether the bank covers an unauthorized withdrawal.  “If the bank rules the PIN was generally known (or too easy to figure out), it may not absorb the loss, leaving the consumer on the hook.”

Once you make a report, be aware some of your otherwise unaffected credit cards may be frozen while the investigation is being conducted.  You will also need sworn affidavits to accompany your documentation which can cost $100 or more to prepare.  And since each credit-granting agency will require an original; the costs can add up.

Some good news, Brad Brian of Manulife Securities, says identity theft is less likely to impact your investment accounts due to compliance and identity verification requirements by advisors.  So next time we update your Know Your Client form, know that the information gathered is for the Anti Money Laundering Act, which has been put in place to protect you and your money.

Have a great weekend,

Tracey

Source:  Advisor.ca, original article by Lisa MacColl, posted 12-13-13

Tax Freedom Day

Last Monday; June 9^th was the day when the average Canadian family had made enough money to pay its annual taxes, says the Fraser Institute.

A typical Canadian family who earn $99,841 per year in total household income pays approximately $44,435 in tax, or 44% of their income to the federal, provincial and municipal governments.

The Fraser Institute says this year our tax freedom day fell one day later than last year, this is due to the fact some governments are increasing their taxes.  Back in 1961, taxes were low enough that Canadians earned enough by April to cover their taxes.  The latest tax freedom day on record was June 24, 2000.

Year Round Tax Planning

Tax planning shouldn’t just happen every April; by being forward thinking you can reduce your 2014 tax bill by identifying credits and deductions now.  Here are some tips; 

·        Pay your personal income tax installments on time; with the next installment date fast approaching those self-employed individuals whose estimated income tax for the year exceeds $3000 should be ready to pay their next installment by June 15^th this will avoid late fees and interest charges.

·        Individuals who are turning 71 years of age in 2014 must convert their RRSPs to RRIFs before the end of the calendar year.  If this is you, consider maxing out your final RSP contribution before December 31st. 

·        Seniors and/or retirees should also take note and educate themselves on the important tax changes of recent years; including income splitting opportunities, changes to OAS and CCP, and the benefits of TFSAs.

·        Equivalent-to-Spouse Credit: If you are single, divorced or separated you may be able to claim your son or daughter (under age 18), or another family member who lives with you and who is dependant; as an ‘equivalent-to-spouse’ for tax purposes.

·        Disability Credit:  Those with a severe or prolonged mental or physical disability that significantly impedes their ability to perform the routine tasks of daily life can apply for this credit.

·        Caregiver Tax Credit:  Canadian families that provide in-home care for a dependant adult relative may be eligible for a caregiver tax credit provided the dependant’s net income is below a certain amount.

·        Childcare expenses:  Daycare fees, summer camp or boarding school expenses for children under age 16 can be deductable providing the parents are either working or attending school full time.

·        Medical Expenses:  You can reduce your tax bill by claiming a tax credit for all or part of an expense related to a medical condition.  This includes things like guide dogs for the blind, bathroom aids, attendant care, even a portion of the cost of an air conditioner to help ease a severe respiratory ailment, accessible housing and tutoring services for those with a certified learning disability.

·        Moving Expenses:  The cost of renting a truck, hiring movers, storing furniture, legal fees, real estate commissions, the cost of breaking a lease, and food or hotels can be claimed if your move brings you a minimum of 40km closer to your new job.

A lot of out of pocket expenses can be used to reduce your overall tax bill.   By doing a little research now; you can save yourself a lot of time and stress come next April.  If you have any questions, or need help give me a call.

Have a great weekend,

Tracey

 

Source:  Advisor.ca articles written by staff 09-06-14 and 09-10-13

 

Kidnapping - A Billion Dollar Business

Whether you are traveling overseas yourself, or sending employees; worrying about flight times and foreign customs make it easy to over look the risk of being kidnapped; but you shouldn’t.

Kidnapping for ransom is a billion-dollar worldwide business run by experts in planning and negotiation.  When you or someone you know is traveling outside North America, it is a threat worth considering.  Western travelers are targets in many cities, and you don’t need to be a billionaire or professional athlete to be at risk.

How to Protect Yourself

Special insurance companies have now developed kidnap and ransom insurance.  The plans provide a wide range of coverage, including:

• Ransom Money
• Informant Money
• Accidental Death
• Legal Liabilities
• Rehabilitation
• Personal Security Consultation
• Reward Money
• Negotiation Services
• Family Counseling
• Loss of Ransom in Transit
• Medical Services and emergency evacuation
• Interpretive and forensic services
• Business security consultation

From 2006 to 2012, the number of kidnappings and dollar amounts of ransom demands have increased by an estimated 100%.  In more than 14 countries cases of $25 million or more in settlements were recorded in recent years.  In Mexico alone, the first six months of 2013 had over 750 kidnappings, the highest in more than 15 years.

In addition to being emotionally devastating for your family, such events can destroy you financially as well.  Since kidnappings end in death less than 10% of the time, emotional trauma and financial loss are the most likely outcomes.

Most insurance plans are customized and there is an extensive application that provides underwriters with the information required to assess the situation and set the premiums.  The factors they will look at include; location and length of travel, itinerary and the reason for your trip.  The cost of such insurance is around $1000 per year, although it could be more depending on the circumstances.

While the global markets have created amazing business opportunities, kidnapping and extortion have become a nasty side affect.  As companies continue to grow and expand internationally, so does the challenge of protecting valuable employees in what are sometimes hostile environments.

So if you are traveling for business, it is in your best interest to look into getting yourself protected.  If you need some guidance, give me a call.

Stay safe and have a great weekend,

Tracey

All insurance and segregated fund transactions are provided through Hub Financial.  Any information in the enclosed note is provided by Tracey Marshall who is a registered insurance agent under the Financial Services Commission of Ontario.  Hub Financial is not affiliated or related to Security Financial Services.

Source:  original article posted on Advisor.ca by David Wm. Brown, 04-28-14