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Canadian business owners work hard and always keep the needs of their business top-of-mind.

But did you know that although 60% of Canadian business owners are over the age of 55, 91% don’t have a formal business succession plan in place?^*

It’s important for business owners to start early and think about key issues like:

• Minimizing taxes;
• Strategizing the transition of their business;
• Planning for a comfortable retirement; and
• Considering how to best transfer wealth to the next generation.

Asking yourself the following five questions can help you get started:

1. How do you own your business?
2. Do you know what your business is worth?
3. What happens if there’s an unexpected tragedy?
4. Have you considered your exit options?
5. And what does retirement look like?

Working through these five key questions with your team of advisors will help ensure you cover off all the key details when it comes to building an effective business owner plan.

*Statistics source: Canadian Federation of Independent Business, November 2012 report. Updated report and statistics (2018) available here: https://www.cfib-fcei.ca/sites/default/files/2018-11/Getting-the-transition-right-succession-planning-report.pdf.

The need for tax-smart estate plan, has never been greater. With the massive baby boomer generation inheriting trillions of over the coming decades, and taxes on those inheritances likely to remain high. Here's some tips for creating your tax-smart estate plan. First of all, make sure your will is up to date, especially if there have been important changes in your life. Your will names your beneficiaries and your executor. Consider having an open discussion with your family, you may feel uncomfortable about doing this. But it can help your family understand your intentions, and what they might need to do. One of the things you may want to discuss with your family is your choice of executor.

It's an honor to be named an executor, but there are a lot of responsibilities. Make sure your chosen executor is comfortable with what they will have to do. And remember, you don't have to choose a family member. Especially if you have a complicated estate, it may make more sense to choose a professional executor. You may also want to discuss taking care of certain family members. Perhaps you have younger children or grandchildren that you want to provide for. You can leave them a bequest through a testamentary trust in your will, or you can create a family trust during your lifetime. Trusts have important tax advantages when they are properly structured. Let's assume your beneficiaries have no other income. For example, a minor child, they can earn about $10,000 of interest income tax free, every year on the assets you transfer into the trust.

Here's another way you can reduce the impact of taxes on your estate, with life insurance. Consider this, if you leave $300,000 in your RSP or riff when you pass away. Your estate may have to pay as much as nearly half of that in tax, that's nearly $150,000. Similarly, your estate may have to pay taxes on any capital gains on things like your investments, your cottage, and US property. With a life insurance policy, you can cover these taxes. It can be very cost effective because the insurance premiums are often just a fraction of the tax bill. As always, with insurance, it's most cost effective when you're younger and in good health. One last tip for creating a tax-smart estate, and it's important. Make sure you speak with a qualified legal professional first, before you put any estate planning strategies in place.