Make a Difference with Giving Tuesday

Make a Difference with Giving Tuesday

Have you joined the “Giving Tuesday” national movement? This year Giving Tuesday falls on November 28th, 2017 – the Tuesday following Black Friday and Cyber Monday. And what better way to end off the year than by giving back to your community? Below is a quick guide on how to jump on board, make a difference, and enjoy tax benefits by participating:

Volunteer and Raise Funds

There are lots of different ways to get involved for Giving Tuesday. One way is to volunteer at a local charity or even organize a team event with friends or colleagues. Many people are donating pro bono hours or organizing donation drives for people in need. Others are raising money for charities and organizing fundraisers as a way to participate while giving back to their own community.

You could even launch a campaign to obtain donations or organize your company in a 24-hour challenge to raise money. It’s an excellent way to achieve volunteer hours or to meet new people and get involved in your community.

Partner with Local Charities and Organizations

Another excellent way to help make a difference with Giving Tuesday is by partnering with local organizations to provide donations to charities and not for profits organizations. There are numerous organizations that have worked together to start their own “giving” movements by fostering collaboration and creating beneficial long lasting relationships.

Give your Business a Boost by Utilizing Social Media

Giving Tuesday is fueled by social media and community/industry partnerships. Share your photos and campaigns to boost your company’s values and community engagement. Set corporate sustainability and social governance goals, and incorporate this day as part of the initiatives.

Enjoy Tax Benefits by Donating

Did you know that Canadians are entitled to claim non-refundable tax credits on donations made to Canadian registered charities? And if you have never donated to charities before, the First-Time Donor’s Super Credit (FDSC) allows new donors to claim an additional 25% credit up to a maximum $1,000. This will be added to the regular federal tax credit of 15% on the first $200 and 29% on donations above $200, annually. That means that new donors will achieve 40% savings on $200 and 54% thereafter.

To note, this is not including your provincial tax savings. But when combining the federal and provincial tax credits you can get more money back.

To top it off you can combine your donations with your spouse or common-law partner and claim it through the person who receives the greatest tax saving.

Giving Tuesday has taken off in 98 countries around the world, raised over $168 million dollars already this year, and brought industries and people together while helping millions of others in need. Join the movement and enjoy the benefits – start giving today! Speak with your financial advisor at The Beacon Group of Assante Financial Management Ltd. for more tax planning strategies.

What Estate Freeze Strategy is Right for You?

What Estate Freeze Strategy is Right for You?

Estate freezes conveniently help lock in your capital assets at its current Fair Market Value (FMV) so that there’s no further capital gains and tax liabilities on its future growth. This strategy provides several benefits to both the owner and the beneficiary when transferring a business. Let’s take a look at the various freeze strategies and what the right one is for you.

Estate Freeze

The classic estate freeze is perfect for a client with a business, typically worth at least $1 million dollars, who wishes to transfer the ownership to their kin or management. The estate freeze locks in the current value into preferred shares for the owner while passing on any future growth to the transferee through new common shares.

This involves the existing owner initially transferring their existing shares into preferred shares in either the operating company or a holding company, which will have a fixed value equal to the FMV of the company. The successor then buys the common shares that are issued from the company for a nominal amount and any further increase in the value is benefited to the successor.

The Partial Freeze

The partial freeze is different from the traditional freeze in the sense that the owner will lock in the present value of the company in preferred shares and further profit through the common shares for any future growth.

How this works is that when the common shares are issued the owner and transferee, both buy the shares for a nominal amount. This is most effective for an owner who wants to continue to participate in the company’s growth, while also broadening the ownership to successors or staff. It’s also beneficial if the owner would like to hold off assigning a beneficiary. The owner can simply issue the shares into a discretionary trust and then later designate the transferee as the trust’s beneficiary.

Wasting Freeze

The wasting freeze allows the owner to redeem the preferred shares over time. This is great for owners who would like to fund their retirement with the company’s proceeds. This method also allows the owner to spread out the tax liability, as the owner will pay tax as the shares are redeemed. However, when the company buys all the redeemed shares, the owner receives a dividend that does not qualify for the LCGE (Lifetime Capital Gains Exemption) because they are not considered capital gains. This redemption is generally taxed at a higher tax rate than capital gains for those in the higher tax brackets.

Estate Re-Freeze

If you are an owner who has already committed to an estate freeze and the value has dropped without a recovery in the near future, this may be the best option for you. This protects the transferees from taking a tax hit if the owner was to pass away before the value recovers. A re-freeze involves bringing the current share value in line with the company’s actual value by creating new preferred shares worth the present value that the owner trades for the original preferred shares.

This option is also beneficial when the company is growing in value and you would like to freeze the company again, or when one introduces new shareholders into the ownership model.

Estate freeze methods have various benefits to owners and shareholders alike. Finding the right one for you can reduce the liabilities incurred when assets are disposed of. To learn more about estate freezes or to discuss other estate planning strategies, speak with your financial advisor at The Beacon Group of Assante Financial Management Ltd.

Finding a Healthy Work Life Balance

Finding a Healthy Work-Life Balance

You’ve heard of it, you know it’s important, but creating a healthy work/life balance seems like something you can put off until tomorrow. Well unfortunately “tomorrow” can quickly become an arbitrary date and before you know it you’ve missed one too many piano recitals and can’t quite figure out where the years have gone. Before you become swept up in late nights at the office and the weekends totally immersed in your work, think of the consequences of your actions.

Your business thrives from all your hard work

Not all consequences are negative. It’s true that if you work exceptionally hard, then your personal success and business growth should positively reflect that effort. This could mean more money for you and your family and could mean good things for your future.

Your children go to bed without seeing you

If you spend night after night working either at your office or at home, your children will be the ones who feel your absence the most. Children of all ages are impressionable and a lot more intuitive than you might initially think. They will notice if you are never there for dinner, and they will notice if you aren’t around to kiss them goodnight.

Too many missed events can cause problems

As your children get older they may become involved in sports, music, or dance which means recitals and games are all part of the fun. If you are constantly a no-show at these events because you are working overtime, you can expect that your children to be upset about it. Your children want to show off the skills they have been practicing and receive your acceptance and praise. If you aren’t there to give it to them they may feel let down.

Stress in the marriage

If your job is taking you away from your house and family, expect there to be a certain amount of stress in the marriage over time. When one partner is handling everything to do with the house and the kids, they may begin to hold some resentment towards you for never being present. It’s not uncommon for a marriage to suffer and even fall apart if there is insufficient work/life balance.

It’s important for you to be successful and thrive in your business, however do not overshadow your home life and family life in order to reach the top of the business world. There are more important things in life than your job and it’s important to realize that before it becomes too late to change.

A complete wealth plan takes into account your unique wants, challenges, and goals, to ensure your financial picture aligns with your lifetime vision. The steps you take now can ensure your family is protected and you have the time and energy to invest in what matters most.

Knowing the Right Questions to Ask When Buying a Business

Knowing the Right Questions to Ask When Buying a Business

There are so many moving parts to a business, and knowing the right questions to start asking when buying a business can help ease the strain of the process. Here are some important questions to consider asking to set you off on the right path.

What to ask the previous owners

Engaging with the previous owners and acquiring knowledge of the operation about the business will be key. You should ask questions that relate to how the business is currently managed, operated, and positioned. Questions should include:

  • How will current clients and suppliers be managed?
  • What are the opportunities going forward?
  • Who are the competitors?
  • What is the target audience?
  • Are there are any setbacks and threats to the business?
  • What’s the status of the employees/employee retention?

How much money can I add to the transaction?

The more money you can commit to the total sale price, the more you can increase the leverage you will have in negotiating the final price and the terms and conditions of the sale. It will also determine the size of the business you will be able to purchase and the type of financing that will be available to you. The more money you can put down up front, the more resources you will have available, including options from lenders.

What type of financing strategy do I require?

Once you understand how much money you can put towards the transaction, your next step is to figure out what type of financing you can obtain, along with your tolerance for debt load. This will include whether you’ll be engaging in any partnerships, have access to equity investors or angel investors, and the types of financing that will be available to you.

What is my business strategy and focus?

It will be crucial to have a detailed business strategy outlined, as this will be critical to lenders and your financing strategy. Knowing the current positioning of the business in the market and if you plan to maintain or expand the operations is important. You will want to be able to answer and include the following questions in your strategy:

  • Do you understand the current revenue structure and operations of the business and how do you plan to structure this in the future?
  • Will your business strategy include upgrading equipment, changing or improving inventory?
  • What will your measurable targets will be?
  • Will you have the resources to carry out your strategy and vision?

The first steps of purchasing a business are probably the most challenging. And being able to know what questions to ask initially will help you tackle any obstacles and set the way for a successful negotiation. Speak with your financial advisor at The Beacon Group of Assante Financial Management Ltd. for expert advice about buying or selling a business.