Understanding Trust Protectors

Understanding Trust Protectors

Trust protectors are gaining popularity to help guard over assets. While there are many reasons to have a trust protector, the most common motivation is to help deal with an untrustworthy trustee. Should that ever happen, then a protector is surely the way to go. To help you better understand what a trust protector is and what they do, read on.

What is a Trust Protector?

To understand trust protectors, you need to first understand what a trustee is and how they differentiate. Trustees are responsible for managing the assets that are held in trust. Trust protectors on the other hand, are a third-party individual or group – someone who is separate from the trustee who exerts influence on how a trust is administered, and also checks on the actions of the trustee. They are hired by the person who created the trust, otherwise known as the settlor.

The trust protector maintains a fiduciary responsibility to that of the trust and acts in the best interest of the beneficiary. This person can also have the power to appoint and replace trustees, as well as remove trustees in case of misconduct.

What are the Added Benefits?

Beyond appointing and replacing, the protector also can serve as a mediator between trustees and beneficiaries. They can also veto questionable investment decisions, address any challenges to the trust such as tax or legal challenges, monitor changes to legislature and ensure the trustee is in compliance, and generally act to ensure trustees are doing their job.

How Do You Choose a Protector?

First and foremost, a protector should be someone you trust. Protectors need to understand your business goals including what their involvement will be in the process. Family businesses may prefer to choose a family member who understands the business in great detail – this can be beneficial as one can avoid paying fees, but on the other hand there may also be tax restrictions.

If the business is more complex in nature one may wish to appoint a professional, such as a tax advisor, trust company, or even an advisory board. Depending on the business structure you may also want to engage with an international expert that is located close to the place of business if you have an offshore trust or a company that operates in other regions.

In summary, the protector is a way to safeguard your trust from trustee misconduct. If you own a trust and would like an extra layer of protection then a protector may just be the way to go to safeguard your assets and give you some peace of mind.

Leaving a Vacation Home to Your Heirs

Leaving a Vacation Home to Your Heirs

Your vacation home is a special place for you and your family to unwind and recharge. That can all change quickly if you don’t have proper estate planning in place when leaving your vacation home to your heirs. Whether you own a cottage on Eagle Lake or a chalet in Canmore, there are many estate planning approaches that will ensure your legacy is left to future generations.

Leave the Vacation Home in Your Will

Your Will should outline how your estate will transfer the deed to your children. Each person that you cite in the Will would own an equal portion of the property and an equal claim to how the property will be used in the future. Each heir would also bear an equal responsibility for any costs associated with the property, which includes the capital gain taxes associated with the disposition upon your death – something that not each of your heirs may want to endure.

Create a Trust

If you decide to create a trust you would be able to select a trustee to oversee the home while your heirs become the beneficiaries of the trust. Your heirs would have rights to use the home as outlined in the terms, but the trustee would make the decisions regarding the property.

Gift the Property

If you expect the property to appreciate and increase in value in the future, then gifting the property to an heir may be beneficial to defer more tax. This is because when you gift the property, it is disposed of at market value and a taxable gain will occur if the current market value is more than the sum of what the original cost was.

Taking that into account, you should consider whether you will be able to defer more tax now or in the future if the property appreciates. Something else to consider is that if you gift the property at a bargain price, your heirs will need to use that as the base price when they sell the property, possibly acquiring hefty capital gains taxes.

Make sure that you have the appropriate resources in place to pay the capital gains tax if your property has indeed appreciated and you decide to take this route.

Claim as a Principal Residence

You can also tax shelter the property by using the principal residence exemption. When claiming the vacation property as your principal residence, you will be exempt from the capital gains tax that is normally added during disposition. However, if you’ve owned the property from 1982 onwards, you can only claim one property as your principal residence.

You should determine whether your vacation home has appreciated at a higher rate than your current home. If the answer is yes, you may want to designate it as your permanent residence. It’s important to note that upon the second spouse’s death there could be tax to pay if the property has appreciated in value. Consider investing in life insurance to cover any taxes owing at the time of death.

Given these complexities, it’s crucial to calculate and evaluate all the different scenarios before reaching a final decision. Your financial advisor at The Beacon Group of Assante Financial Management Ltd. can assist with estate planning and tax planning to ensure your wishes are met.

Easy Ways to Eat Healthy on the Go

Easy Ways to Eat Healthy On-The-Go

Too often we find ourselves working against the clock to get where we need to be. Whether it’s to get out of the house on time in the mornings, or to get from one meeting to another over lunch hour, what suffers first and foremost is our diet.

Healthy Breakfast

It’s easy to skip breakfast on your way out the door when you’re racing against the clock. But by skipping breakfast you are depriving your body of the most important meal of the day. Substituting a proper breakfast for a quick drive through coffee is not a healthy choice, although it is a popular one. By not giving your body the fuel it needs to perform you are setting yourself up for fatigue and ultimately failure.

There is a simple way to make healthy breakfast choices without adding an extra hour to your morning routine, and it’s the smoothie! Invest in a good blender that can get the job done quickly and efficiently. Next, invest in bags of frozen berries and some frozen kale as well as some Greek yogurt and pure juice such as orange or pomegranate. Give yourself an extra ten minutes in the morning to blend all of these ingredients together and pour into a travel container, or you can prepare the smoothie the night before. The protein from the Greek yogurt mixed with the infusion of vitamins from kale and the berries will be enough to set you on a good path for the day.

Healthy Lunch

Lunch poses another problem when you’re busy running your own business. There isn’t always time to stop and eat lunch, let alone seek out something healthy. And typically, the words healthy and fast do not go hand in hand.

Packing yourself a lunch every day is the best way to guarantee yourself a healthy lunch, but it also is another step to take care of at home. If you are not in the habit of brown bagging it, do some research for healthy places near your office. Quite a few places are turning up in busy areas that offer healthy salad and sandwich options using fresh and nutritious ingredients instead of heavy, fried foods that satisfy appetite but don’t provide the energy you need to power through the day.

The key thing is to find a healthy place and stick to it. If you are too busy to run out and get yourself a lunch, ask someone else in the office to go get it for you and offer to buy them something as a thank you. There are ways to ensure you eat healthy throughout the day; you just need to be willing to make it happen for yourself.

Healthy Snacks

Lastly, always have healthy snack foods available to you in your office. Make the food items non-perishable and easy to munch on while working. A mix of almonds and dried cranberries is a fantastic combination to keep in your drawer, or keep carrots and hummus in the fridge, which will both keep for about a week. Having healthy snacks available will at least provide you with short-term sustenance until a proper meal can be had and save you from trips to the vending machine.

Don’t rely on someone else to make healthy choices for you. Invest in your own health and well-being by making time for healthy eating every single day.

Selling Your Business on Your Terms

Selling Your Business on Your Terms

You’ve spent years growing and positioning your business to be successful. When it comes time to sell your business, you want to make sure that you are selling when and how you want and with money in hand. Below are some helpful tips to help you get the compensation you deserve for all that you have built:

Create an Exit Strategy and Timeline

Creating an exit plan involves making a proactive series of decisions. This involves writing down how much cash you will need to walk away with, what the favourable market conditions are for selling, what the lease conditions are (if any), outlining any tax implications, and creating the timeline required for a proper transition.

Also, it’s important to define the potential purchasers. It is important to know whether you are open to selling at arm’s length, to a competitor, to an employee, or to a family member. You may also want to consider if you will want any future relationship with the business, such as working as a consultant to the new owners.

Determine Market Value

Doing research on the current market you plan to sell your business in will help you better understand appropriate transaction timing and price targets. You should understand recent comparable sales in the area. Take into account not just the value of the business (income and inventory) but also real estate and assets like furniture and electronics. A professional business valuator will be able to accurately assess the value of your business.

Deal Structure

Now that you understand market factors, you will want to create an ideal deal structure – one that will ensure you receive the best price and conditions for the sale of your business. This includes outlining all the conditions of the sale, such as price points, employee retention plans, lease conditions that may be affected upon selling, and how the operation of the building will be maintained during and after the transition.

Preparing your Business for Sale

You should know when and how to enhance your business’ valuation and saleability. This could include brand perception, fixing any eyesores, getting your balance sheets in tip-top shape, updating any contracts with customers and vendors, as well as outlining any deal killers and, of course, addressing them immediately.

The Marketing Plan

Engage in a marketing plan and research marketing companies that can aid you in attracting leads. Creating brochures, ads, and websites, will help draw in qualified purchasers. You may want to work with a business broker or use a listing service to increase your reach.

Negotiation Plan and Due Diligence

Be prepared to negotiate not only the price, but also the due diligence terms through the transaction process. Have an experienced broker or agent who can help aid this process and ensure the terms are in your favour. Know your price points and ensure you engage with a trusted purchaser with a quality covenant. In the interim it will be important to keep your sales figures up, expenses low, and your current operations adequately performing to ensure premium pricing.

When it’s time to sell, being prepared is essential. It can help you sell your property faster, at a higher price, and ensure a much smoother transition. The earlier you put your exit plan in place, the more options you will have. Meet with your financial advisor at The Beacon Group of Assante Financial Management Ltd. to customize the best tax, compensation, and succession plan for you.