asset protection plan - sun life financial€¦ · 13 making it easy ... . under section 146(8.8)...

Asset protection plan Advisor guide

ADVISOR USE ONLY

2 Personal retirement account

introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3Target market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3estate planning challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4How the Asset Protection Plan (APP) works . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4Taxation of assets at death . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5options for paying estate taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7illustrating the APP with eos . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8The APP client report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11APP planning considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11Product selection with APP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13Making it easy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

TAble of conTenTs

asset Protection Plan 3

the asset Protection Plan (aPP) shows the size of the estate tax liability and how a life insurance policy can be a cost-effective way to cover taxes owing at death. this enables clients to pass assets to their beneficiaries intact.

the aPP strategy may be suitable for clients who:

are between the ages of 50 and 70,

have assets with significant deferred tax liabilities,

want a cost-effective way for their beneficiaries to pay estate taxes,

have paid-off all or most of their debt, and

wish to leave a legacy.

the aPP is designed for individuals. it doesn’t reflect corporate tax rules. clients who implement the aPP should seek their own tax and legal advice to ensure this strategy meets their needs.

consider the following questions to determine if the aPP is right for clients:

does the client have assets with a deferred tax liability?the aPP may be suitable for clients whose assets incur significant deferred tax liabilities payable on their death, or the death of their spouse. For example, the aPP can be a great solution for clients with substantial registered assets and taxable capital assets with deferred gains.

is the client healthy?the aPP uses life insurance, so clients must be reasonably healthy and able to qualify for coverage to implement the strategy.

does the client have a long-term planning view?the aPP is meant to be in place for the rest of the insured persons’ life. clients should ensure they can afford to pay all premiums due. a long-term view is essential to maximizing the benefits of this strategy.

does the client want to reduce the impact of taxes on their estate value?this is an important consideration. For most clients the answer will be yes. ensure that estate maximization is consistent with client’s goals and what they want to achieve.

Many canadians who progress through their working years towards

retirement can accumulate sizable assets . While the government has

introduced programs such as registered retirement savings plans (rrsPs)

to defer taxes while living, eventually those taxes will be owing by the

estate . Many people realize there’s a financial cost to their estate when

they die, but don’t often realize how significant it actually is .

TArgeT MArKeT

4 asset Protection Plan

esTATe PlAnning cHAllenges

HoW THe AsseT ProTecTion PlAn WorKs

many canadians face two primary estate planning challenges:

1. Taxes owing at death

on death, assets are deemed to be disposed of for their fair market value. this deemed disposition may result in taxes owing by the estate, and the potential estate tax liability may leave much less to a client’s beneficiaries than they intended.

2. Funding the tax liability

some clients want to ensure the full value of their estate is protected and transferred intact to their beneficiaries when they die. they want to know what the tax liability may be and a cost-effective way to pay it.

The APP can provide clients with a solution for both.

at the date of death, the fair market value of an individual’s registered assets will be fully taxable. in addition, 50 per cent of the capital gain of their taxable non-registered assets will be taxable. For individuals with sizable assets, this could mean a substantial tax liability to the estate. the aPP can help preserve the full value of these assets and shows how life insurance can be the most cost-effective method of funding a tax liability at death.

With this strategy, the client purchases a life insurance policy to provide their beneficiaries with a tax-free death benefit. the beneficiaries can use the death benefit to pay the tax liabilities of the estate, and as a result they can inherit the assets intact.

the following products are available using aPP:

sun Par Protector

sununiversallife / sununiversallife max

sun limited Pay life

sunterm

a joint last-to-die policy may be suitable for married couples or those in a common law relationship. When the first spouse dies, the life insurance coverage continues, and eligible assets rollover intact to the surviving spouse. When the second spouse dies, the assets are deemed to be disposed of, resulting in taxes payable by the estate. the life insurance policy’s death benefit can then be used to pay the estate tax liability.

CRABeneficiariesBeneficiaries

The objective The reality


TAXATion of AsseTs AT deATH

Taxation of registered assetsregistered assets can include rrsPs, locked-in retirement accounts (lira), locked-in retirement savings plans (lrsP), registered retirement income funds (rriF), life income funds (liF) and locked-in retirement income funds (lriF). under section 146(8.8) of the income tax act (ita), when a taxpayer dies, their registered assets are deemed to be disposed of at fair market value and are included as income to the estate.

if a spouse is the beneficiary, spousal rollover provisions will apply, allowing proceeds to be passed on tax-free. However, when they die, registered assets will be deemed to be disposed of for their fair market value and included as income to the estate.

if someone other than a spouse is the beneficiary, proceeds are included as income to the estate. certain exceptions may apply if the beneficiary is a dependent child or grandchild. clients should consult their legal and tax advisors for full details.

the estate can lose as much as 39 per cent to 50 per cent of the value of the registered assets at death, depending on the deceased’s province of residence.

Taxation of non-registered assets (capital assets)capital assets may have a fluctuating market value and include non-registered investments such as stocks, mutual funds or segregated funds. capital assets may also include investment properties and other real estate. Gains resulting from disposition of the taxpayer’s principal residence are not taxable.

under section 70(5) of the ita, when a taxpayer dies, their capital assets are considered to be disposed of for their fair market value, resulting in a capital gain (or loss). the gain or loss equals the fair market value, less the adjusted cost base, or acquisition cost. currently, the canada revenue agency includes 50 per cent of the total capital gain as income. the resulting taxes are payable by the estate in the year the taxpayer dies.

Owner

Life insurance policy

Estate Beneficiaries

CRA

Tax liability paid to crA

death benefit paid tax-free at last death

The objective is met . The taxes payable by the estate are equal to the life insurance death benefit payable to the beneficiary . The full value of the estate is preserved for the beneficiary .


When there is a capital loss, subsection 111(2) of the ita provides special rules to use net capital losses in the year of death and the previous taxation year. in those two taxation years, net capital losses from other years may be deducted in full against income. these rules are subject to some limitations. clients should consult their own legal and tax advisor for full details.

For married couples or those in a common law relationship, rollover provisions may apply. taxes may be payable upon the death of the second spouse.

Taxation of qualified assetsa qualified asset is one that’s eligible for a capital gains exemption, such as shares of a small business corporation or a farm and fishing property. at the time of death, these assets are deemed to be disposed of and may incur a capital gain (or loss) to the estate.

section 110.6 of the ita indicates qualified assets may be eligible for a $750,000 exemption from capital gains if they meet certain criteria. the conditions are complex and clients should consult their tax advisors.

other assets to considerLife insurance

a life insurance policy’s cash value grows tax-preferred. the death benefit can be paid tax-free to a designated beneficiary when the insured person dies.

Principal residence

a home that’s ordinarily inhabited by the taxpayer is considered the principal residence. on the date of the taxpayer’s death, the principal residence is deemed to be disposed of for its fair market value. the principal residence exemption will apply; therefore the deceased taxpayer’s estate will be exempt from any resulting capital gain.

Tax free savings account (TFSA)

When a tFsa holder dies, tax rules deem they’ve received the amount equal to the fair market value at the date of death and with no taxes owing. after a tFsa holder dies, the contract is no longer considered to be a tFsa, and earnings after their date of death will be taxable to the beneficiaries.

if the tFsa holder named their spouse or common law partner the sole beneficiary, the tFsa contract will continue and the spouse or common law partner will become the successor holder.

Additional costs arising at death

While the taxes owing at death due to the disposition of an asset may be sizable, there are additional costs associated with settling an estate. executor fees, probate, legal and administrative costs can reduce the size of an estate by as much as 5 per cent. While the aPP will project the estate tax liability at death, it’s worth a conversation with clients to ensure they understand these other potential costs.

When a taxpayer dies, the executor is responsible for ensuring that the tax owing by the estate is paid. Here are common ways of funding the tax liability:


Tax liability funding option

What is involved Cost calculation What to consider

Cash on hand cash or cash equivalents such as Gic’s or t-bills are used at death.

tax liability at death. - Does the estate have these funds?

- could the money be invested elsewhere? (opportunity cost)

Sell assets Valuable estate assets are sold at death and may incur a fee or commission cost.

tax liability at death + selling costs.

- How liquid are the assets?- market timing risk depending

on time of death. (i.e. being forced to sell during a poor market)

- selling costs could be as much as 5% of estate value.

Borrow funds Borrow funds from a financial institution and make principal and interest repayments.

tax liability at death + interest costs.

- Will the lender issue the loan?

- Will the loan repayments be affordable for the beneficiaries?

Life insurance taxpayer purchases a life insurance policy while living.

Future value of life insurance premiums.

- Will the insurance cover the projected taxes?

- are premiums affordable?

the chart below appears in the aPP client report and compares the cost of four tax liability funding options. it shows that life insurance is often the most cost effective option for paying estate taxes owing at death. life insurance premiums often cost less than paying for the tax liability using cash, selling assets or borrowing funds.

oPTions for PAYing esTATe TAXes

Cash

Cost

Sell assets Borrow Life insurance


the aPP on eos will give you the opportunity to offer clients a life insurance solution with a death benefit that equals or exceeds their projected estate tax liability at life expectancy.

to access the aPP strategy, select the Needs Analysis icon from the eos main menu.

step 1: enter client dataWhen the aPP strategy is open, you can enter client data. eos will automatically display an assumed life expectancy, but you can change it. the life expectancy you select will be an important factor in the strategy’s results.

step 2: Assets tabinput the client’s assets to accurately project their tax liability at death.

asset type field. For simplicity, the aPP strategy classifies assets under the following five broad categories:

- RRSP: includes rrsP, lira and lrsP assets and fields for future contributions.

- RRIF: includes rriF, liF and lriF assets and fields for annual income. if locked-in assets are included, be sure to consider the maximum allowable income.

- Qualified: includes shares of a small business corporation or farm and fishing property that are eligible for the $750,000 capital gains exemption.

- Non-depreciable: non-registered (capital) assets such as investment properties, vacation properties, mutual or segregated funds and stocks etc.

- Depreciable: Depreciable property may include buildings or farm equipment. You can select from straight line or declining balance depreciation methods. The client’s accountant or tax advisor will need to provide this information.

select Add or Delete to add or remove asset types.

illusTrATing THe APP WiTH eos


step 3: Assumptions tabthis tab contains factors specific to the estate tax funding options used for comparison in the client report:

Marginal Tax Rate on Interest: this is the tax rate used for tax liability calculations.

Selling Cost Percentage: the percentage that will apply when selling assets to pay for the estate tax liability.

Loan Interest Rate and Loan Period: the interest rate and loan period that will apply when borrowing funds to pay for the estate tax liability.

step 4: Alternate investments tabeos will illustrate accumulated insurance payments and make a comparison as if they had been invested in an alternate taxable investment. You can stipulate the type of income and rate of return that the alternate investment will earn over time. You can select from either a basic or advanced allocation. additional fields are as follows:

Annual Portfolio Turnover: the rate at which the investments in the portfolio are turned over by trading. a low rate would reflect a buy and hold strategy, whereas a high rate would reflect an actively traded portfolio.

Capital Gains Inclusion Rate: the current capital gains inclusion rate is 50 per cent.

Marginal Tax Rate on Dividend Income: For simplicity the dividend gross up and tax credit is not applied to dividend income. instead, enter the rate at which dividend income is to be taxed after considering the effect the dividend gross up and tax credit will have on the client’s tax position.

TIP

use the basic investment allocation with clients who don’t need a sophisticated asset

mix to compare the alternate investment’s performance.


step 5: choosing from current or future tax liabilityBefore you select the type of life insurance policy, you need to determine whether to transfer the current or future projected tax liability. select Life Proposal on the left side of the screen.

the current tax liability is the estate tax liability at the end of year 1. the future tax liability is the estate tax liability at life expectancy. You can find both of these values at the bottom right hand corner of the aPP screen.

Transfer Current Tax Liability: Face amount of the life insurance plan will be set to equal the current tax liability. this amount can be manually adjusted if required. the client can fund the policy so the death benefit growth will equal the estate tax liability at life expectancy, as shown in the chart below. the following product choices are available:

- sun Par Protector – the default dividend option will be paid-up additional insurance

- sununiversallife / sununiversallife max – the default death benefit option will be insurance amount plus fund

- sun limited Pay life

Transfer Future Tax Liability: the face amount of the life insurance plan will be set to equal the future tax liability at life expectancy, as shown in the chart below. You can only use this option with products that offer a level death benefit such as universal life or term insurance. the following product choices are available:

- sununiversallife / sununiversallife max – the default death benefit option will be level insurance amount

- sun limited Pay life (without additional funding)

- sunterm

Total assets

Duration

Am

ount

Total tax liability

Life insurance

Total assets

Duration

Am

ount

Total tax liability

Life insurance

Total assets

Duration

Am

ount

Total tax liability

Life insurance

Total assets

Duration

Am

ount

Total tax liability

Life insurance

after you select a tax liability transfer option, eos will take you to the standard product illustration tool. then you can select the appropriate life insurance plan and prepare an illustration.


THe APP clienT rePorT

the aPP client report presents a professional, high level description of how the strategy works and how it will perform under the assumptions you and the client select.

Problem description and recommendationthis section summarizes how the aPP works and outlines the tax problems a client’s beneficiaries can face. it discusses how a life insurance policy death benefit can cover tax liabilities at death, helping preserve the value of the estate.

The taxation challengethis section reviews the taxation of registered investments and capital gains upon death of the taxpayer. it also quantifies the growth of the tax liability in relation to the size of the estate over time.

estate preservationthis section compares the costs of using cash, selling assets, borrowing funds or using life insurance proceeds to pay the estate tax liability.

Assumptionsthis section provides a summary of all the data used to create the aPP solution.

Projection of total assets and tax liabilitythis report provides a year-by-year growth projection of the client’s registered and non-registered assets, and the corresponding tax liability for each.

using life insurance to pay taxes duethis report shows the life insurance death benefit alongside the total assets and the total tax liability. ideally, the life insurance death benefit should be at least equal to the tax liability at the client’s life expectancy.

The value of life insurancethis report compares the accumulation of insurance payments as if they had been invested using the alternate investment strategy. the accumulated value is used to represent the cost of the life insurance solution assuming the death benefit was paid at a given time. the cost of insurance is often much lower than the value of the death benefit.

APP PlAnning considerATions

While the aPP demonstrates how a life insurance death benefit can be a cost effective way to cover estate taxes, many variables will impact the values shown in the aPP client report. a small change in the assumptions you use can have a significant impact on the strategy’s effectiveness.

one risk is that the life insurance death benefit may not cover the total estate tax liability at life expectancy. in this case, the remainder will have to be paid using cash, selling valuable assets or borrowing funds. each of these options may have their own associated costs.

the results in the client report reflect the assumptions you input. ensure clients understand the impact changes in these assumptions have on their estate values and the value of the life insurance solution. consider the following:


Asset growth ratesthe growth rate of the client’s assets directly correlates with the size of their tax bill. Greater asset growth results in a greater estate tax liability. Use a variety of rate of return assumptions to help determine the death benefit a client’s beneficiaries will need to cover the tax liability.

Policy performancethe aPP strategy demonstrates that life insurance can be the most cost effective way to pay for an estate tax liability. the aPP strategy’s success will often depend on the growth rate of the life insurance policy. ideally, the death benefit growth should exceed the deferred tax liability of the estate. if the policy doesn’t grow at the rate illustrated, the death benefit might not be enough to cover the outstanding tax liability.

a participating whole life policy’s growth will depend on the dividend scale and a universal life insurance policy’s growth will depend on the policy fund’s performance – neither of which are guaranteed. actual results will vary compared to the client report, and clients will need to make product decisions based on their comfort level.

changes to tax rulestax laws change frequently. Because the aPP is a longer-term strategy, there is a risk that tax treatment for registered investments and capital gains could change between now and the client’s death.

living longer than expectedthe aPP software compares the costs of various tax liability funding options at the client’s life expectancy. By definition, 50 per cent of the population will die before reaching life expectancy and 50 per cent will outlive life expectancy. if the insured person lives longer than illustrated, the tax liability could exceed the life insurance death benefit and leave the estate with a shortfall. run the strategy using different life expectancies to demonstrate the impact on the final estate tax liability and the life insurance death benefit.

TIP

run the aPP using alternate dividend scales and rates of return to illustrate the impact

that changes in performance will have on the long-term death benefit of the policy.

TIP

eos calculates life expectancy on a single life basis and does not account for the

potentially increased life expectancy experienced by a couple. since two lives are

involved, there is a greater probability that at least one life will live to a very advanced age.

For joint last to die cases, consider increasing life expectancy to account for this.

Note: Projected values of life insurance

policies are not guaranteed.

they are based on assumptions

that are certain to change

and are neither an estimate

nor a guarantee of future

performance. actual results will

differ upward or downward.


life insurance face amountideally, the life insurance death benefit will at least equal the estate’s tax liability. the policy’s growth will need to keep pace with the tax liability over time. While they won’t grow at the same rate, you can create an illustration on eos where the life insurance death benefit closely matches the growing tax liability over time.

Premium payment periodclients may not want to pay for life insurance after they retire. those who build up sufficient policy value during their working years may reach a point where no further out of pocket premiums would be required. this may be dependent on policy performance and is not guaranteed.

ProducT selecTion WiTH APP

When you’re working with a client to illustrate the aPP, consider the client’s objectives, cash flow and risk tolerance when determining which solution can meet their needs.

universal life insuranceuniversal life insurance offers flexibility that makes it straightforward to illustrate the aPP strategy on eos. solves in eos calculate the premiums needed to ensure the death benefit closely matches the estate tax liability at life expectancy, assuming a specific rate of return. universal life plans offer a level death benefit or an insurance amount plus fund.

Transfer current tax liability – When you choose to transfer the current tax liability, the death benefit option is the insurance amount plus fund. eos sets the face amount equal to the current tax liability. eos will calculate the premium required to reach a death benefit equal to the tax liability at life expectancy. the policy growth rate will determine the policy’s funding level.

Transfer future tax liability – When you choose to transfer a future tax liability, the death benefit option is level. eos sets the face amount equal to the future tax liability at life expectancy. Because the death benefit option is level, the premium is the minimum required for the policy.

Why consider universal life insurance? Premium flexibility – universal life offers clients more premium flexibility than participating

whole life. the client only needs to pay the monthly policy charges to keep the policy in force. this can be a great option for clients with variable cash flow.

Investment choice – With universal life, clients can choose from a wide variety of equity, fixed income and guaranteed investment options.

Transparency – With universal life plans, clients can see the breakdown of the premiums they’ve paid, including the cost of insurance, premium tax, and additional benefits.

Participating whole life insuranceParticipating whole life insurance doesn’t provide clients with the same premium flexibility as universal life insurance. as a result, eos won’t calculate premiums required to match the death benefit with the estate tax liability at life expectancy. instead, you can use the Plus premium benefit and Premium offset functionality in eos to match the death benefit with the tax liability.

You can produce the results you need using various combinations of Plus premium benefit payments and premium offset durations. For example, if the death benefit isn’t enough to cover the tax liability in the early years, add the Plus premium benefit to help close the gap. if the death benefit exceeds the tax liability at life expectancy, use premium offset to slow the death benefit growth in the later years of the policy.


When you illustrate the aPP using participating whole life insurance, eos will use the paid-up additional insurance dividend option. eos will match the face amount with the current tax liability. Yearly growth of paid-up additional insurance will help the death benefit keep pace with the growing tax liability.

Why consider participating whole life insurance? Stable growth – stable returns can help reduce variable policy growth. the combination of a

long-term investment strategy, a large, well established par account and a prudent management philosophy contributes to strong, stable returns for policyholders.

Low maintenance – Policyholders don’t have to pick and manage investments within the policy. the sun life Participating account is managed by a team of dedicated investment professionals.

Diversification opportunities – a client can diversify their asset base through dividends credited to their policy from the sun life Participating account which consists of a diversified mix of bonds, real estate, equities and mortgages.

Guarantees – Participating whole life insurance plans provide guaranteed cash values that grow over the life of the contract.

Vesting of dividends – once a dividend is paid to the policyholder, it can’t be taken away unless directed by them. this helps reduce cash value variability and adds stability to the long-term values in the policy.

Term insurance Because the aPP is designed to provide beneficiaries with funds to cover tax liabilities at death, a permanent life insurance solution is ideal. term insurance may be an appropriate solution when a client wants to protect their estate from taxes, but is concerned about short-term affordability, or isn’t ready to purchase a permanent plan.

Buying a term insurance policy gives clients the option to convert to permanent coverage down the road without providing additional evidence of insurability. consider recommending a face amount that is equal to the anticipated tax liability at life expectancy.

REMEMBER

Premium offset is an administrative feature (not a contractual right under the policy) that

may allow a client to use dividends and accumulated value within the policy to help pay

future premiums if certain conditions are met. the premium offset date is not guaranteed.

it may occur sooner or later, or not at all, depending on future dividend scale changes.

if and when the policy goes on premium offset, at some point the client may have to

resume out of pocket payments.

if the client adds the Plus premium benefit to a policy after issue, additional underwriting

may be required.


MAKing iT eAsY

our goal is very simple – to make it as easy as possible for you to sell and service our products. By providing clients with a concrete summary of the issues that face them, you will be better positioned to help them structure an effective financial solution. that’s why we offer the following tools that you can use to explain the benefits of the aPP strategy to clients.

ASSET PROTECTION PLAN TOOLS

ASSET PROTECTION PLANAn estate protection strategy using participating whole life insurance

Gary and Linda have worked hard to accumulate assets including RRSPs, non-registered investments and a summer vacation property. When they die, they want to leave it all to their daughters, Michelle and Jessica.

Meet Gary and LindaBoth 57, they plan to retire at age 65. Now that their daughters have finished school, they can focus on building their assets.

Gary and Linda’s registered assets are taxable on the second spouse’s death. Nearly half of their remaining registered funds could be consumed by taxes.

One half of deferred capital gains may be taxable at death. Capital gains on their summer vacation property and investment portfolio may increase their final tax bill.

Legal, administrative and probate fees could add up to 5% of the entire value of the estate.

WHEN YOU NEED A SOUND PLAN FOR EFFICIENT ESTATE TRANSFER

Jessica JessicaMichelle

Michelle

CRA

The objectiveDistribution of Gary and Linda’s estate

The reality

Gary and Linda are concerned the final value of their estate won’t be all that it could.

The challenge

client fact sheet – participating whole life: this fact sheet sets out how the aPP strategy works with participating whole life, highlights the benefits and encourages clients to contact you for more information.

Because the things we cherish most are for keeps.

Asset protection plAn strAtegyproviding for taxes through life insurance. Most of us want the same thing: Once our retirement is well taken care of, we want our children to benefit from what’s left behind. That could be a beloved family cottage. However, without proper planning, often it could be a hefty tax bill. But you can prepare for taxes and protect what you value with the asset protection plan strategy.

John and Mary have invested well, with assets of just over $1,000,000. But they didn’t realize their estate could grow to over $4.2 million by the time they reach 85 – well-earned wealth they want their children to share.

But what if the cash in your estate isn’t enough to pay the taxes? Without proper planning, your children may have to raise the money by selling the family cottage or other assets from your estate – or take out a loan, with the accompanying interest charges.

Depending on your province of residence, registered assets are taxed from 39% to 48%. Capital gains on assets such as your cottage are taxed from 20% to 24%. Shouldn’t those assets go to your heirs?

Meet John and Mary. They’re both 55 with three children, a tidy nest egg for retirement and a cottage that’s the heart of their family.

the challenge

Taxes could consume a substantial portion of their estate – much more than you may think.

What John & Mary want What could happen

client fact sheet – universal life: this fact sheet sets out how the aPP strategy works with universal life, highlights the benefits and encourages clients to contact you for more information.

APP illustrations: With sun life’s powerful eos software, you can create detailed client needs analysis reports based on the client’s actual financial situation. With a minimal amount of effort, you can clearly demonstrate the potential size of the client’s estate at life expectancy, their future tax liability based on their current situation, and then compare the cost of any insurance solution with the other three funding options.

client reports: our eos software produces a full-colour report with text and colour graphs for a powerful presentation of the problem and solution.

We’re here to helpWe’ve been a trusted and reliable company for over 145 years. as a leading international

financial services organization, we continue to build on that strong foundation with a

focus on market-leading products, expert advice and innovative solutions.

our team of insurance and investment focused sales directors and advanced tax and

estate planning specialists understand your needs and work with you to help you make

the best decisions.

contact your sales director or visit www .sunlife .ca today .

life’s brighter under the sunsun life assurance company of canada is a member of the sun life Financial group of companies.

© sun life assurance company of canada, 2013

810-3967-04-13

asset protection plan - sun life financial€¦ · 13 making it easy ... . under section 146(8.8)...

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