You’re going to give me how much for my company?

The Globe and Mail, Kira Vermond & Noreen Rasbach, February 2016

During his years as an accountant working with affluent Canadian entrepreneurs, Andrew Guilfoyle has seen his fair share of estate planning horror stories.

The president of Guilfoyle Financial Inc. remembers the owner who suddenly died without a contingency plan, leaving employees, clients and suppliers reeling. Then there was the retiring business owner who overestimated how much his company was worth, refused to sell for less – and walked away with zero.

And who could forget the owners of a family business who decided to leave their company to a child who spent most of his time perfecting his ollies out in Whistler, B.C.?

“Nice kid, good snowboarder, but …” says Mr. Guilfoyle today from his Toronto office.

Tales like these illustrate how tricky it can be for the wealthy when it comes time to pass on their assets to the next generation. Given that most high-net-worth individuals in Canada are also business owners and entrepreneurs, they are not merely passing along homes, boats and investment earnings, but the businesses themselves.

Read the article here.

Best Before 2017 – Upcoming Changes to the Taxation of Life Insurance

CPA Magazine, Andrew Guilfoyle, Adam Shapiro & Zachary Schwartz, December 2015

New income tax rules for life insurance will come into effect in a little over a year, with significant impact on estate plans.

Joe, a 50-year-old, non-smoking client at our wealth management firm, recently came to us seeking counsel on a number of estate-planning issues. Since life insurance was going to play an important role in his plan, we informed Joe that the income tax benefits of certain insurance strategies would be diminished if his plan were implemented after 2016.

In particular, Joe was evaluating an investment in a $5-million universal life insurance policy. He did not have a specific timeline for completing his plan, but he was interested in having the policy owned by his holding company. Joe wondered how his planning would be affected if he decided to wait until after 2016 to implement this insurance program.

We explained that the current Canadian income tax rules on life insurance would enable his holding company to distribute up to 100% of that $5-million death benefit tax-free to the new shareholders of the holding company should Joe die any time after he turned 73.

Read the article here.

Universal Life Insurance – An Endangered Species?

CPA Magazine, Andrew Guilfoyle, March 2013

Universal life policies have gone the way of the dodo bird in many countries. Is this the case for Canada and should we care? If so, why? A financial product will never evoke the emotions of the nearly extinct cuddly giant panda or cute African penguin, but estate planning advisers are beginning to fear that universal life (UL) policies will eventually go the way of the dodo bird.

Until very recently, UL was the new kid on the block, and it wasn’t supposed to meet its demise so soon.

Life insurance policies can be traced to ancient Rome, while modern life insurance originated in 17th century England. UL is merely decades old and at its inception was hailed as a major step forward in transparency and flexibility from its predecessor, whole life. As its “unbundled” sister, UL has offered permanent coverage at lower premiums — in plain English, if there is no need for the death benefit or cash values to grow over time, the premiums can be much less costly.

However, a confluence of events over the past decade has punished insurance companies offering UL to the point where some have pulled their products. The remaining providers tacitly acknowledge that not only are they getting an insufficient return on capital, in many instances they are losing money on new policies sold.

Read the article here.

All articles are reprinted with permission. These resources are provided for reference only and do not necessarily represent the opinions of Guilfoyle Financial Inc. Please consult your own tax and legal advisors.