Secure your family’s future: the critical role of integrated planning

The largest wealth transfer in Canadian history is underway, making intergenerational wealth planning more important than ever. One report estimates that by 2026, baby boomers will transfer $1-trillion to the next generations.

High-net-worth (HNW) individuals (those with $1 million or more in investible assets or owning a business of significant value) often have unique financial needs. To achieve their intergenerational wealth transfer goals, many are seeking the expertise of private wealth planning.

“HNW Canadians often have complex financial structures, given many are professionals and business owners. They essentially have generational wealth, requiring careful estate planning beyond just having a will,” says Christine Van Cauwenberghe, head of financial planning at IG Wealth Management.

She says an IG Private Wealth Management advisor considers all aspects of a client’s financial life, from tax and estate planning, to charitable giving, to maximizing the value of their business, in order to help solve their intricate financial requirements.

Find efficient tax strategies

Many clients already have a team of trusted advisors, including an accountant and a lawyer. While these advisors play a key role, their priorities are often the more immediate personal and business financial needs.

“Accountants, for example, are typically focused on minimizing taxes for last year and this year,” Ms. Van Cauwenberghe says.

For HNW clients, certified financial planners with a background in estate planning can prove especially useful. They can construct long-term plans, not just for retirement, but to ensure wealth is passed on tax efficiently to family members, as well as to support charitable causes.

At IG Private Wealth Management, an advisor works collaboratively with tax and estate experts in multi-disciplinary teams. That’s the real value, and ensure that the tax and estate planning considerations are also taken into account, says Ms. Van Cauwenberghe, referencing “the IG Private Wealth Planning Experience”.

The family cottage is one example of where estate planning is beneficial, she says. Passing it on incurs taxes, which requires proactive strategies.

“Leveraging the strategic use of permanent life insurance with a tax-free pay out provides liquidity to pay taxes arising when that family cottage or asset changes hands. Many Canadians aren’t aware that the best way to maximize the after-tax value of their estate may be by using insurance. We’ve had clients use insurance not only to fund the potential tax liability at the time of death, but also to allow the estate to buy out a sibling who may not be interested in maintaining the property, allowing another sibling to keep it.”

Don’t start when it’s too late

Ms. Van Cauwenberghe says that without having access to a broad spectrum of tax and estate experts, along with the most modern financial planning software or the right advisor, it can be difficult to project the tax liability and how much insurance would be recommended. “Estate planning is often an afterthought for many people, until it’s too late.”

Such planning helps clients to avoid pitfalls, enabling them to see the big picture. One common challenge is feeling a sense of almost insurmountable complexity. Many business owners and professionals feel overwhelmed by the ever-shifting tax rules. That includes the recent proposed increase to the capital gains inclusion rate.

“They feel paralyzed, and don’t know who to turn to for advice,” Ms. Van Cauwenberghe says.

When working with an IG Private Wealth advisor with expertise in estate planning, clients get advice that addresses their concerns and charts a sensible path forward.

For instance, IG Private Wealth often brings up ideas like a donor-advised fund, which is essentially a mini-foundation for a family. Making a large donation to the fund results in a significant tax credit, reducing taxes owing on the sale of a business. That can effectively reduce a tax bill to zero.

“We recently had a situation where a client contributed millions of dollars to our donor-advised fund, but their family members received the same amount of the sale proceeds as they would have had there been no charitable contribution. The difference was that no taxes were paid,” explains Ms. Van Cauwenberghe.

Afterward, the individuals and family can decide how the fund’s capital can be used to provide ongoing support to a variety of charities. “It’s also a really great way to involve the next generation.”

Arrange family conversations

Bringing the family together is an important overall benefit of estate planning. Having conversations with all involved about the future of the family wealth ensures the right strategies are incorporated.

IG Private Wealth advisors can lead these conversations and connect clients to the right experts, whether in-house or external, to ensure the estate plan is implemented properly.

“We assemble experts from various fields, including tax, estate, insurance and advanced financial planning, to address all dimensions of a client’s financial life, and build an integrated and synergistic plan tailored to their needs,” says Ms. Van Cauwenberghe. “Our priority is delivering tangible results to each of our HNW clients through IG’s unique Private Wealth Planning Experience.”

Advertising feature produced by Globe Content Studio with IG Private Wealth Management. The Globe’s editorial department was not involved.