We provide services to high net worth private clients. Our clients often belong to one or more of the following groups.
Entrepreneurial families
Owners of a growing business
Active investors and real estate owner
Conservative investors
Philanthropists
Executives and professionals
Entrepreneurial families
As part of the succession planning process, the owners will need to decide when they intend to transfer ownership of their business: it could be during their lifetime, upon their death, or gradually. They will also have to make a decision as to the terms of transfer of ownership: sale at fair market value, estate freeze or gift. In addition, the owners could transmit the company shares to all their children or only to those active in the business. Depending on the strategy chosen, there will be issues of equitable sharing of the estate, of potential redemption of the shares of inactive children and/or of taxes payable on the death of the owners without the estate necessarily having the cash to fund these needs. Life insurance can be the least expensive way to provide for these needs and ensure the sustainability of the business.
Owners of an active business
Owners of an active business may wish to protect themselves against the financial impacts resulting from the death or disability of a key person. Life insurance, disability insurance and critical illness insurance can be purchased in this context. Insurance will also be useful in the context of buy-sell agreements to redeem the shares of their co-shareholders in the event of death or permanent disability.
Active investors and real estate owners
The active investors may hold investments in stocks, investments in private corporations or real estate. These assets can be held personally or through a private corporation. They may have appreciated in value since their acquisition and taxable gains could be realized upon the death of the investor. It is possible that the liquid assets available at death will not be sufficient to pay for the related taxes. The survivors will have to either sell the securities, the investments or the real estate, or borrow, measures which, in certain circumstances, may not be desirable or even possible. Purchasing life insurance to meet the payment of taxes on death in this illiquid context makes sense.
Conservative investors
The conservative investors seek a stable return on their investments while preserving the invested capital. They traditionally invest in fixed income securities such as guaranteed investment certificates or bonds. However, income from these investments is subject to high annual income taxes.
Funds invested in a permanent life insurance policies will yield superior returns for those with the goal of maximizing the estate value. This higher return is in part explained by the fact that life insurance proceeds are received tax free at death. In this context, the investors wish to bequeath the capital invested as well as the accumulated income on this capital.
Moreover, a strategy combining a life annuity and permanent life insurance is particularly attractive for older people who wish to draw income from their capital but prefer to preserve this capital for their heirs.
Philanthropists
The philanthropists wish to make a significant difference for one or more causes that are close to their heart. They may seek to make a substantial gift at the lowest possible cost, and this without unduly affecting the value of the family's wealth.
There are several strategies using life insurance to donate to charities. In some scenarios, life insurance is the asset being donated. We thus take advantage of its multiplier effect. In other scenarios, life insurance allows for the replacement of capital used to fund a major inter vivos charitable gift.
Executives and professionals
The executives and the professionals may be people who have not yet reached financial independence and who must continue to save in order to generate retirement income. Many people with high incomes fall into this group.
If there are dependents, it goes without saying that their basic needs should be covered, most often through term life insurance. Disability insurance makes it possible to maintain the lifestyle (of the individual and of his/her relatives) in the event of illness or accident thanks to the monthly benefit it generates. Critical illness insurance should also be considered to provide for exceptional needs related to an illness. The strategy of split dollar critical illness insurance is particularly interesting for incorporated professionals.