With the new year well on its way, it’s a great time to continue considering your wealth goals and plans. From establishing, reviewing, or refreshing your goals and priorities, to considering what risks or opportunities you want to address, we can help. Your Investment Advisor is available to engage with you and your family to understand what is important to you and what you wish to achieve. Then, leveraging either their expertise or combining that with our team of RBC Wealth Management expert professionals, your Investment Advisor can help to deliver the plans and solutions you need.
Below are five key areas of wealth planning, and three suggested questions to consider within each:
1. Goals
Your goals and dreams are at the core of your wealth plan. They underpin how your portfolio is constructed and managed. They guide the advice and planning you receive in areas such as life stages, tax, banking and credit management, and estate planning. Your goals will likely change and evolve over time, especially when you experience major life changes or enter new life stages, such as parenthood or retirement, and need to be updated as a result.
Ask yourself:
- What matters most to me in my life? What are my top priorities? Can I list and rank them?
- Within the context of my existing obligations and family or business circumstances, what do I need to accomplish and execute on in my plan to achieve my goal or goals?
- Are my goals realistic? What do I need to do to make sure I can achieve them? Am I maximizing my efforts in achieving my goals, especially when it comes to partnering with my financial advisors to maximize my plan?
2. Life stage planning
For many Canadians, the goal of working and/or building a business, and the wealth that is accumulated from those efforts, is to achieve a fulfilling and sustainable retirement. For others, the focus is on their family, and ensuring that their children and future generations are secure and taken care of for their lives, either through the passing of wealth or a business (or both). And some of us who are entering our later years or a period of difficult health (for themselves or someone they care for), the focus may be on preparing for and managing through what can be a trying period.
Ask yourself:
- Considering my goals, what life stages am I focused on planning for? What is the next life stage on my horizon – and am I prepared for it, financially, psychologically and even physically?
- Have I engaged and discussed this new life stage potential challenges and opportunities, with my spouse, family, friends, advisors, and even my Power of Attorney and Executor/Executrix?
- If you are a business owner or control a family enterprise: Have I engaged in business succession planning or considered a sale of the business?
3. Tax planning
Taxes are an unavoidable part of life, but they don’t need to be a larger issue than is necessary. Being smart and planning around your taxes can reduce your tax burden and help you build wealth faster – while helping to sustain it over time. This starts by assessing your tax exposure on a personal level, family basis and, of major significance, your business and investments. Tax planning may help address varied and complex tax obligations, while achieving your goals and objectives in the most tax-effective manner.
Ask yourself:
- Am I structuring my financial affairs in the most tax-effective manner? Am I taking advantage of methods to minimize taxes, for instance through trusts or holding companies?
- Am I set up most effectively to minimize taxes and maximize my investments and income structure?
- If you are a business owner: Is my company ownership structured in the most effective manner to reduce to taxes?
4. Banking and credit needs
Banking and credit needs are a critically important aspect of wealth planning. Convenience, time-savings and efficiency are important aspects of what you expect for your banking. This is especially important when it comes to managing a larger family or a complex family structure, or running a business. Credit is not only an important way to finance a business or important family purchases, but could also be used as a tool to maximize tax effectiveness and reduce risk. The more complex your family and business needs become, the more you need thoughtful banking and credit structures and advice. Your Investment Advisor and RBC Private Banking can work together to deliver the right account structure, meet your borrowing needs and support your personal and business needs across the globe.
Ask yourself:
- Is my banking working to create convenience and efficiency for me and my family? Do I need support to engage in cross-border and/or global banking?
- Have I engaged in an analysis of my borrowing needs in order to maximize my tax efficiency and cashflow? Am I taking advantage of credit structures that could boost my after-tax income or to minimize my tax liabilities?
- If you are dealing across borders: Have I considered my currency and foreign jurisdiction exposure? Do I have access to important tax and business law advice and guidance to ensure I are maximizing my global business dealings?
5. Estate planning
Estate planning is about much more than determining who gets what from your estate. Estate planning often begins with determining how you wish to be cared for if you become incapacitated, and who will have power or control over your financial affairs in that circumstance. Despite many of our wishes to leave a legacy, or to establish charitable giving within our lifetimes or after, a significant number of Canadians have no Will or have not updated their Will in over five years.
Ask yourself:
- Do I have a Will, or have I updated my Will in the last five years, especially if I have experienced changes in health and family? Have I considered what I would do with my business if I became incapacitated or died?
- Have I established Power(s) of Attorney (PoA), for both financial as well as health matters? Do the appropriate people know how I wish to be cared for if I became incapacitated? Do my Investment Advisor and other key advisors know who my PoA(s) is/are? Do they have the correct documentation on hand to ensure my interests are being protected and managed as I wish?
- Have I had a conversation with my family, beneficiaries, Executor/Executrix, concerning my wishes for my estate if I were to die? Have I considered and taken action to establish my legacy, particularly in the area of charitable giving? Do I wish to and/or have I established a charitable trust or plan to see my legacy established now or in the near future?
Next step: Contact us
These are five key areas of wealth planning that we believe are important to reflect upon from time-to-time and to consider as you progress through life. These questions are designed to prompt you to engage with your Investment Advisor in areas you feel need to be addressed to help you achieve your goals. Once you have had a chance to review the above and determine what areas, contact your Investment Advisor – they’re ready and able to help.
This information is not intended as nor does it constitute tax or legal advice. Readers should consult their own lawyer, accountant or other professional advisor when planning to implement a strategy. This information is not investment advice and should be used only in conjunction with a discussion with your RBC Dominion Securities Inc. Investment Advisor. This will ensure that your own circumstances have been considered properly and that action is taken on the latest available information. The information contained herein has been obtained from sources believed to be reliable at the time obtained but neither RBC Dominion Securities Inc. nor its employees, agents, or information suppliers can guarantee its accuracy or completeness. This report is not and under no circumstances is to be construed as an offer to sell or the solicitation of an offer to buy any securities. This report is furnished on the basis and understanding that neither RBC Dominion Securities Inc. nor its employees, agents, or information suppliers is to be under any responsibility or liability whatsoever in respect thereof. The inventories of RBC Dominion Securities Inc. may from time to time include securities mentioned herein. RBC Dominion Securities Inc.* and Royal Bank of Canada are separate corporate entities which are affiliated. *Member-Canadian Investor Protection Fund. RBC Dominion Securities Inc. is a member company of RBC Wealth Management, a business segment of Royal Bank of Canada. ® / TM Trademark(s) of Royal Bank of Canada. Used under license.
