You’ve worked hard throughout your lifetime and this hard work has finally paid off. Perhaps you’ve accumulated assets beyond even those that you may need to enjoy a carefree and relaxed retirement that will eventually be passed on to your heirs. However, some of these assets can result in a tax liability upon your death, or on the death of your spouse. So, what are considered assets? Well, your assets can be divided into three main groups: Assets of a capital nature such as shares in public/private companies or a second home or vacation property. Assets that generally produce income on your death such as registered assets (RRSPs or RRIFs) or assets that are taxed as income such as interest bearing assets (GICs or money market funds). Assets that are either fully tax paid or do not attract tax upon death such as cash and TFSAs, a principal residence, as well as the tax-free proceeds from a life insurance policy. Most people want to keep these assets – their estate – intact in order to pass them on to their family, their loved ones. To do this, it’s important to understand the best way to fund this tax liability post death so that your assets can be passed down without obstacles. There are typically four options when it comes to providing the liquidity that you need to pay your taxes upon death; some of the advantages/disadvantages of these are: Liquidate your assets – business cycles and the state of the markets are critical when it comes to the value of an asset, but you have no way of knowing what this will be at your death. Additionally, the sale of your assets by your estate often signals to the purchaser that there is a degree of urgency, which does not help your estate realize the full value. Borrow funds – usually, this involves using assets as security, which can be a little risky. When it comes to estates, typically the main objective is to distribute the assets to the beneficiaries. Borrowing against the assets, which will likely require pledging them as security, makes this more difficult. Further, it is not possible to predict the market conditions at the time of death; financial institutions go through cycles, as do loan rates. Create a cash reserve – this will require you to save, save, save throughout your lifetime and is not necessarily the most practical option, since you do not know when death will occur and whether there will be ample cash available at that time. Purchase life insurance – this allows you to transfer the risk in advance and remove many of the risks associated with funding the tax liability upon death. The death benefit provides liquidity at exactly the time that you need it, and in Canada, is paid tax-free to your named beneficiary. When planning for your estate, it’s important to assess your current and future tax liabilities to determine the best solution for your situation, ensuring your estate remains intact and can be passed on to your loved ones. Source: Charts are sourced to https://www.thelinkbetween.ca/ The contents of this publication were researched, written and produced by The Link Between (https://www.thelinkbetween.ca/) and are used by Echelon Wealth Partners Inc. for information purposes only. Disclaimers Echelon Wealth Partners Inc. The opinions expressed in this report are the opinions of the author and readers should not assume they reflect the opinions or recommendations of Echelon Wealth Partners Inc. or its affiliates. Assumptions, opinions and estimates constitute the author's judgment as of the date of this material and are subject to change without notice. We do not warrant the completeness or accuracy of this material, and it should not be relied upon as such. Before acting on any recommendation, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. Past performance is not indicative of future results. The comments contained herein are general in nature and are not intended to be, nor should be construed to be, legal or tax advice to any particular individual. Accordingly, individuals should consult their own legal or tax advisors for advice with respect to the tax consequences to them.

Estate planning and distribution of bank accounts. What could go wrong? Here’s a story of one mother who had the best of intentions. Bett had always lived well below her means, and though her three grown children encouraged her to enjoy the fruits of her labour in her golden years, Bett preferred to maintain a humble lifestyle. When she stopped driving, she moved in with her son Beau and his wife, and shortly after, added Beau as joint account holder on her chequing and savings accounts. Beau was happy to pay the odd bill for his mother, or to charm the teller for a brand-new crisp bill so Bett could stuff one of her famous handcrafted birthday cards — which she never failed to send to her favourite grandchild. And, despite the fact that each of her eleven grandkids held the title of “favourite grandchild”, Bett only used up a small fraction of her pension during her years with Beau’s family, so her bank accounts had accumulated to a hefty sum by the time of her passing. When Bett’s will was read, Beau and his siblings learned that she’d bequeathed her assets equally to the three siblings. But things quickly turned complicated when they discovered that Bett’s bank account balances were excluded from her estate because Beau was a joint account holder, which gave him alone right of survivorship to the proceeds. In the final analysis, there weren’t any assets in Bett’s estate to divide among the three siblings! The burning question became, “What were Bett’s intentions?” Had she wanted to override her initial bequests because Beau and his family had been so good to her in her final years? Had she only added him to her accounts to help with her banking? Or had Bett added Beau to her accounts in an attempt to avoid probate fees on her account balances, since their province had among the highest probate fees? How could the siblings know for sure? Beau felt confident that his mother intended all three children to share equally in her estate, while his siblings suspected that, because Beau had done so much for her, it may have been Bett’s final intention to leave him her entire estate. If Bett had documented and communicated her intentions to all three children, the uncertainty would have been avoided. In the end, the siblings knew that whatever Bett’s intentions, she always had the best of intentions and fortunately, so did they, so Beau equalized the proceeds from the bank accounts between the siblings, who each in turn, invested the inheritance for the future education of Bett’s "favourite grandchild". Consider this… Communicate your intentions verbally and in writing to avoid misunderstandings, especially when there are gifts to adult children, as there could be complications, questions, confusion, disputes, or in the worst case, court proceedings over the distribution of your estate assets. To learn more about estate planning and documenting your final intentions, watch our short video SMART TALK... about will planning and drafting , and read our previous post Beneficiary Designations – Making Sure Your Money Goes Where You Want . Source: Charts are sourced to https://www.thelinkbetween.ca/ The contents of this publication were researched, written and produced by The Link Between (https://www.thelinkbetween.ca/) and are used by Echelon Wealth Partners Inc. for information purposes only. Disclaimers Echelon Wealth Partners Inc. The opinions expressed in this report are the opinions of the author and readers should not assume they reflect the opinions or recommendations of Echelon Wealth Partners Inc. or its affiliates. Assumptions, opinions and estimates constitute the author's judgment as of the date of this material and are subject to change without notice. We do not warrant the completeness or accuracy of this material, and it should not be relied upon as such. Before acting on any recommendation, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. Past performance is not indicative of future results. The comments contained herein are general in nature and are not intended to be, nor should be construed to be, legal or tax advice to any particular individual. Accordingly, individuals should consult their own legal or tax advisors for advice with respect to the tax consequences to them. Insurance products and services are offered by life insurance licensed advisors through Chevron Wealth Preservation Inc., a wholly owned subsidiary of Echelon Wealth Partners Inc. This material is provided for general information and is not to be construed as an offer or solicitation for the sale or purchase of life insurance products or securities mentioned herein. Every effort has been made to compile this material from reliable sources however no warranty can be made as to its accuracy or completeness. Before acting on any of the above, please seek individual financial advice based on your personal circumstances. Please note that only Echelon Wealth Partners is a member of CIPF and regulated by IIROC. Chevron Wealth Preservation offers products sold through members of Assuris designated by OSFI.