I love the Olympics. Yes, I am biased given that I dedicated a good part of my life to the Olympic dream; nonetheless, the athlete stories are so powerful, and inspiring.

 

With the 2022 Beijing Winter Games coming to an end and all the success of our Canadian athletes, I decided to write this post for you, the Canadian athlete.

 

Getting to the games is such an accomplishment and if you can stand on top that podium, well, you better be prepared for what’s to come. Financially speaking, the outcome of an Olympic medal may lead to endorsement deals, speaking engagements, appearance fees, influencer fees, etc. The sky is the limit. Yes, like many, if not all, Canadian athletes, your motivation to pursue your sport was to achieve Olympic excellence, not financial reward. But guess what, with that medal(s) around your neck, you are now in a unique position to benefit from all of those people who want to hear your story and use it to propel their brand or business. Your hard work can now literally pay off. So, get yourself an agent - there are some awesome ones here in Canada – to help you with this.  

 

Now that your income comfortably exceeds your expenses, what should you do? Likely, you’re starting to save it in an account (e.g. TFSA, Non-registered account, maybe RRSP, or RDSP), maybe starting to invest it, or maybe using it to purchase something big, like a house/condo or a car. Whether through word of mouth with other Canadian athletes, coaches, GamePlan, or other, you heard about Amateur Athlete Trusts (AATs), and if you’ve searched online, you probably stumbled across my article - read this article if you haven't already – and probably sent me, or someone at GamePlan, an email wanting to learn more about them, or, as is often the case, wanting to set one up.

 

Given, my background (sport and wealth management), and my time working with a number of different Olympic, amateur, and professional athletes, I have had many conversations about AATs. They are great tools, and pretty cool because they were created for athletes!!!! However, more often than not, an AAT doesn't always make sense. For starters, sometimes there are costs involved (accounting and legal) to establish, register and maintain an AAT. These costs, unfortunately, negate the current and future benefits of the account. Other times, we conclude there are better, more appropriate structures (e.g. incorporation) given post-sport career ambitions (e.g. they want to start a business, hit the speaking tour, shift to professional status, etc.). So, before going down the road of opening an AAT, do the planning to make sure it makes sense to you. If your financial background is limited, I strongly encourage you to speak with someone who has some tax and/or financial planning background to determine if an AAT is right for you. It's difficult to identify the ideal candidate or the amount of money that would validate an AAT – everyone is different - but my back of the envelope math suggests that this person earns about $35-$45K in income (e.g. this is money above what you get through AAP and/or your province) and plans on going back to school or take some time when they retire from sport (e.g. not be making a whole lot of money).

 

Assuming you determine an AAT is right for you, your next step is to get a lawyer to help you draft a trust agreement. Examples of these agreements do exist. If you are able to obtain one, I’m sure you will be able to reduce your legal fees. With any trust agreement you need to find a Trustee. With an AAT, you only need one trustee. Your lawyer will help you with this, but as per the CRA, an AAT trustee is someone who is a trusted, arms-length (e.g. not blood related) individual with some financial acumen. Their role is to ‘sign off’ on all transactions with the trust (e.g. money going from the trust to you, etc.). If you haven’t already, find yourself an accountant (note: this person may be able to act as your trustee). Your accountant will be responsible for registering your trust with the CRA, help you record all transactions with the trust (e.g. money going in and out), and then complete the required annual filings. Finally, you will need a bank account, and possibly an investment account (this will be dependent on your plans, etc.). To get a bank/investment account, you need a trust agreement. So, don’t go into a bank branch or speak to a financial advisor without one… they won’t be able to help!

 

With the trust and bank accounts in place, you are all set! There are some subtleties regarding payments into the trust (e.g. they need be in the name of the trust), and/or getting a GST/HST number… but that’s an accountant thing, so, ask them!

 

Again, an AAT is a great tool. Do your planning to make sure it is right for you.

 

Congrats on your successes!