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Estate Planning Council of CANADA


Disclaimer: Nothing posted is to be construed as legal or financial advice, and views expressed are those of authors. 

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  • October 30, 2020 1:44 PM | Anonymous

    The Estate Planning Council of Canada is pleased to share our latest podcast with members of the Health Community and Advisors in the Planning Community. 

    As Canada faces a second was of COVID-19 cases, we chat with Kelly Yee – Founder of Avatara Yoga, to explore healthy aging and what we can do to improve how we feel and our outlook on life in these difficult times.

    Learn more about small steps you can take for yourself and your family. Advisors want to take care of their health – and that gives them something in common with their clients.  

    A picture containing text Description automatically generated 


      Feel free to click on link below or search “Healthy Aging with Kelly Yee” on the following podcast stations:

    • ·       Breaker
    • ·       Google Podcasts
    • ·       Overcast
    • ·       Pocket Casts
    • ·       RadioPublic
    • ·       Spotify https://open.spotify.com/episode/7q2Q6xRPmGtPi6mrTlfElx



    Please feel free to share the podcast with your community.

    Laurie Daschuk

    Executive Director

    Estate Planning Council of Canada


  • August 17, 2020 8:14 PM | Anonymous

    1.     How are visits with residents facilitated/managed during the Covid-19 pandemic?

    2.     Were you greeted by the staff in a warm and friendly manner?

    3.     Were you able to speak with residents? Can someone vouch for warm and friendly interactions between staff and residents?

    4.     Do you like the outward appearance of the residence and is the interior clean, attractive and free of questionable odors?

    5.     Did you discuss the person’s needs and do you believe the staff can provide the appropriate support for your family member, including in an emergency?

    6.     Do staff only work at one facility at a time? 

    7.     Were the financial requirements, contracts, and costs clearly explained?

    8.     Is it clear to you, under what circumstances a resident might be discharged?

    9.     When may a contract be terminated and what are the refund policies?

    10.  Can different levels of care be accommodated at the facility?

    11.  Are there RNs or Caregivers on the premises to provide for care needs? These needs may include: assistance with dressing, hygiene and grooming, transferring and mobility, bathing, toileting and incontinence, meals, medication and treatments, using the telephone, shopping, laundry, housekeeping, transportation to doctors or hairdressers. Do you feel satisfied that the staff providing these services have sufficient training and are compassionate and responsive to residents’ needs?

    12.  Do you know what information, documents and tests are required by the residence prior to a move?

    13.  Do you have a choice about using the residence’s furniture or bringing the resident’s familiar belongings?

    14.  Does the residence offer concierge services?

    15.  Are the rooms private or semi-private? Does each room have a private bathroom, if appropriate?

    16.  Ask about telephone services, cable and Internet. How is billing handled?

    17.  What are policies about meals and healthy choices? Can the kitchen provide special diets as needed?

    18.  What is the pet policy?

    19.  Did you see the activity calendar? Are the activities of interest? Are there activities and outings away from the residence?

    20.  Would you feel comfortable as a visitor or resident there?

  • June 19, 2020 10:30 AM | Anonymous

    Jamie Golombek: An upcoming drop to the Canada Revenue Agency's Prescribed Rate coming into effect next month could be potentially lucrative.

    Canadian interest rates have fallen to record lows in recent weeks, so the upcoming drop to the Canada Revenue Agency’s prescribed rate, set to come into effect next month, opens up a potentially lucrative opportunity for some couples and families to execute an income-splitting strategy. Here’s what you need to know.

    What is the prescribed rate?

    The Canada Revenue Agency sets the prescribed rates quarterly and they are directly tied to the yield on Government of Canada three-month Treasury Bills, albeit with a lag. The calculation is based on a formula in the Income Tax Regulations, which takes the simple average of three-month Treasury Bills for the first month of the preceding quarter, rounded up to the next highest whole percentage point. As a result, one per cent is the lowest possible prescribed rate.

    To calculate the rate for the upcoming third quarter (July through September), we look at the first month of the second quarter (April 2020) and take the average of that month’s T-Bill yields, which were 0.24 per cent (April 7), 0.30 per cent (April 14), 0.27 per cent (April 21) and 0.27 per cent (April 28). The average is 0.27 per cent, but rounded up to the nearest whole percentage point, the new prescribed rate for the third quarter of 2020 becomes one per cent. This marks the first time that the prescribed rate has dropped since it increased to the present rate of two per cent back in April 2018.

    What is income splitting?

    The drop in the prescribed rate may provide some taxpayers with a significant opportunity to split income with a spouse or common-law partner, (grand)children or other family members, by either making a loan directly to family members or, where minors are involved, using a family trust.

    Income splitting transfers income from a high-income family member to a lower-income family member. Since our tax system has graduated tax brackets, the overall tax paid by the family may be reduced if the income is taxed in the lower-income earner’s hands.

    The “attribution rules” in the Income Tax Act prevent some types of income splitting by generally attributing income or gains earned on money transferred or gifted to a family member back to the original transferor. There is an exception to this rule if the funds are loaned, rather than gifted, provided the rate on the loan is set (as a minimum) at the prescribed rate in effect at the time the loan was originated and the interest on the loan is paid annually by Jan. 30 of the following year.

    If the loan is made at the prescribed rate of one per cent in July 2020, the net effect will generally have any investment return generated above one per cent taxed in the hands of the lower-income family member. Note that even though the prescribed rate varies by quarter and may ultimately rise, you need only use the prescribed rate in effect at the time the loan was originally extended. In other words, if you establish the loan between July 1, 2020, and the end of September 2020 (and possibly longer, if the prescribed rate remains unchanged), the one-per-cent rate would be locked in for the duration of the loan without being affected by any future rate increases.

    How does a prescribed loan work?

    Let’s say Johnny is in the highest tax bracket and his wife, Moira, is in the lowest bracket. On July 1, Johnny loans Moira $500,000 at the new prescribed rate of one per cent secured by a written promissory note. Moira invests the money in a portfolio of Canadian dividend-paying stocks, with a current yield of five per cent. Each year, Moira takes $5,000 of the $25,000 in annual dividends she receives to pay the one-per-cent interest on the loan to Johnny. She makes sure to do this by Jan. 30, as required under the Income Tax Act.

    The benefit to the couple is having the dividends taxed in Moira’s hands at the lowest rate, instead of in Johnny’s hands at the highest rate. The savings are slightly offset by having the $5,000 in interest on the promissory note taxable to Johnny at the highest rate for interest income. This interest paid, however, is tax deductible to Moira at her low tax rate, since the interest was paid for the purpose of earning income, namely the dividends.

    Prescribed rate loans can also be used to help fund minor children’s expenses, such as paying for private school and extracurricular activities, by making a prescribed rate loan to a family trust with the kids as beneficiaries. For example, Johnny could loan $500,000 to a properly established family trust for the benefit of his two children, David and Alexis. The trust then invests the money and pays the net investment income, after paying the interest on the loan, to the children, either directly, or indirectly by paying their expenses. If David and Alexis have no, or little, other income, this investment income can be received entirely tax-free. For example, if both children are in Ontario and have no other income, each could receive up to $53,228 in eligible Canadian dividends in 2020 free of tax, owing to the basic personal amount and the dividend tax credit.

    How to refinance a previous prescribed rate loan

    Finally, what if you entered into a prescribed rate loan with your family member when the rate was two per cent (or higher) and the family member invested the proceeds?

    To take advantage of the upcoming lower prescribed rate, the family member should sell the investments (which could trigger capital gains tax, depending on the market value of the investments compared to their tax cost), and repay the loan to you. You can then enter into a completely new loan agreement using the new one-per-cent prescribed rate. The CRA has stated that simply repaying a higher prescribed rate loan with a lower rate loan could trigger the attribution rules on the investment income.

    Jamie.Golombek@cibc.com / Financial Post June 19, 2020

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