Vice President & Senior Investment Counsellor
BMO Private Wealth
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For many, 2020 was seen as a “critical year for addressing climate change.” Riding on a wave of environmental activism, the hope was that the 2020 UN Climate Change Conference (COP26), scheduled in November of last year, would solidify plans to reduce global carbon emissions. Instead, COVID-19 and anti-racism movements refocused public attention, overshadowing many pressing environmental concerns and postponing COP26. But while this period of upheaval seems to have sidelined the momentum that environmental concerns were gaining, the social inequalities revealed have pushed many conscious investors to explore sustainable investments — specifically those focused on companies with strong environmental, social, and corporate governance (ESG) principles.
Trusts are often used in tax and estate planning because of the flexibility they offer over the control, management and distribution of appreciating assets. In an estate planning context, trusts can be used to provide control and protection of assets, reduce probate fees at death or serve as a Will substitute, and as a vehicle to transfer wealth to future generations. From a tax planning perspective, in the right circumstances, trusts can be used to facilitate income splitting by spreading income amongst family members who are taxed at lower marginal tax rates, thereby reducing the family’s overall tax burden. In particular, the use of a discretionary family trust to reduce the after-tax cost of children’s educational and other expenses is a common tax strategy and the focus of this publication.
An Individual Pension Plan (“IPP”) is a defined benefit pension plan that is designed for high-income earning executives, small business owners, and incorporated professionals, such as doctors, dentists, and lawyers. An IPP allows eligible individuals to accrue retirement income on a tax-deferred basis and is an excellent way to increase your retirement nest egg, as contributions are higher than those available through a Registered Retirement Savings Plan (“RRSP”). An IPP is most suitable for individuals between ages 40 and 71 who have T4 earnings generally greater than $154,611 in 2020.
Selling their company is usually the largest and most challenging financial transaction of a business owner’s life. For most owners, selling a business only happens once and selling the business represents the culmination of their life’s work. Often the business bares their name and holds a place in their heart right next to the kids. For these reasons, selling the business is not just a technically challenging process, it’s also emotionally complex.
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