Creating a Will for Optometrists

Many young doctors, grappling with the demands of their profession and burdened by student debt, often postpone addressing critical aspects of wealth management and legacy planning. Even amidst the hustle of daily life and financial obligations, there are compelling reasons why executing a will should be a priority sooner rather than later.

  1. Distribution of Assets:

    While starting with a negative net worth is common for many young professionals, it won’t be long until your assets exceed your debts. Dying intestate, or without a will, results in your assets being distributed according to provincial laws.

  1. Increase Costs:

    Legal proceedings, particularly involving courts and lawyers, entail significant expense. In addition, settling your estate will require the court to appoint an estate administrator, who also has a right to charge a reasonable fee for their services. Without a will, these costs can quickly eat into the estate, potentially diminishing its value to the point where the distribution of valuables become negligible.

  1. Probate Fees:

    Probate is the legal process validating a will and is a standard procedure for most estates. Having a named beneficiary on life insurance policies and registered investment assets can bypass probate. Probate fees are set provincially and vary substantially across the country.

  1. Family Disputes:

    Intestacy laws dictate how assets are divided among family members, leaving no room for your personal preference. Siblings, parents, a common-law partner – everyone will be hurting and likely feel differently about what is fair, especially compared to a court definition. Many familial relationships have been permanently damaged because you didn’t plan ahead.

  1. Care of Minor Children:

    In the absence of a will, the court determines guardianship arrangements for minor children, a critical decision particularly if you have been their only parent. In addition, if there is any residual of your estate when they turn 18, they will receive the full amount in one lump sum!

Often we believe that everything will pass directly to our spouse. Common-law relationships don’t have the same rights as legally married spouses, and can differ across provincial borders. In addition, if you have children, only a fraction of your estate will be distributed directly to your spouse.

Proper planning will also ensure that your corporation or business interests are handled efficiently to maintain their highest value, and that tax strategies have been included to limit significant liabilities.

Failure to address these issues can lead to many unintended consequences.

Crafting a will empowers individuals to assert control over the distribution of their assets, safeguarding their interest and those of their loved ones. By addressing these considerations proactively, individuals can navigate the complexities of estate planning, ensuring a smoother transition of wealth and preserving their legacy.

Advisory

Have more questions? As your Chief Financial Officer, I am here to help you make smart financial decisions that align with your business growth, personal wealth creation strategy and long term interests. Helping you understand your money and assisting you in making informed decisions about your estate planning are just some of the ways that I work as your fiduciary.

Educating you is just one piece of being your personal CFO that we excel at. Call (780-261-3098) or email (Roxanne@C3wealthadvisors.ca) today to set up your next conversation with us.

Roxanne Arnal is a former Optometrist, Professional Corporation President, and practice owner. Today she is on a mission to Empower You & Your Wealth with Clarity, Confidence & Control.

These articles are for information purposes only and are not a replacement for personal financial planning. Everyone’s circumstances and needs are different. Errors and Omissions exempt.

ROXANNE ARNAL,

Optometrist and Certified Financial Planner

Roxanne Arnal graduated from UW School of Optometry in 1995 and is a past-president of the Alberta Association of Optometrists (AAO) and the Canadian Association of Optometry Students (CAOS).  She subsequently built a thriving optometric practice in rural Alberta.

Roxanne took the decision in  2012 to leave optometry and become a financial planning professional.  She now focuses on providing services to Optometrists with a plan to parlay her unique expertise to help optometric practices and their families across the country meet their goals through astute financial planning and decision making.

Roxanne splits EWO podcast hosting duties with Dr. Glen Chiasson.


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Business Owned insurance

Business-owned life insurance presents a unique opportunity for business owners to leverage insurance as a strategic investment tool. Here’s why it’s worth considering:

  1. Protection Against Business Risks:

    First & foremost, insurance should be used to cover off a risk. Business-owned life insurance can serve as a safeguard against business risks such as pre-mature death. Having an investment portion to your policy adds flexibility funding for other risks such as disability, loss of key personnel, or the buyout needed on retirement of a partner.

  2.  Tax Advantages:

    One of the most compelling reasons to opt for business-owned life insurance is its tax benefits. The growth from corporate investments is considered passive income and is taxed at the full corporate tax rate, currently 50.2% in Ontario. By utilizing life insurance with investment potential, business owners can effectively shield financial growth from excessive taxation, maximizing the potential of their investment.

  3. Preserving the Small Business Deduction:

    Investing in a business-owned life insurance policy can help preserve the small business deduction tax rate on active income. Typical investment earnings in a corporation exceeding $50,000 will grind down this tax rate benefit. Growth in the life insurance policy can mitigate this grind down.

  4. Wealth Accumulation and Protection:

    Beyond tax benefits, business-owned life insurance serves as a powerful tool for wealth accumulation and protection. It provides a vehicle for building assets within the business while simultaneously offering protection against unforeseen events such as the death of a key employee or business partner.

  5. Legacy Planning and Succession:

    Business-owned life insurance can play a crucial role in legacy planning and business succession strategies. It can help ensure that the business has sufficient liquidity to cover expenses, settle debts, and facilitate a smooth transition in the event of the owner’s death or retirement. Additionally, the death benefit can provide financial security for heirs and facilitate the transfer of ownership in a tax-efficient manner when utilizing the capital dividend account.

  1. Flexible Access to Funds:

    The life insurance policy’s cash value can be accessed through various means, including collateralized loans, policy loans, or partial surrenders. This flexibility allows business owners to access capital when needed without disrupting the business’s operations or incurring significant tax liabilities. Additionally, this flexibility can be utilized as an alternative source of retirement income.

In conclusion, business-owned permanent life insurance offers a range of benefits, including tax advantages, wealth accumulation, legacy planning, and protection against business risks. By leveraging insurance as an investment tool, business owners can optimize their financial strategies and secure the long-term success of their company.

Advisory

As your Chief Financial Officer, I am here to help you make smart financial decisions that align with your business growth, personal wealth creation strategy and long term interests. Helping you understand your money and assisting you in making smart decisions about your debt repayment, insurance protection, tax management and wealth creation, are just some of the ways that I work as your fiduciary.

Have more questions than answers? Educating you is just one piece of being your personal CFO that we excel at. Call (780-261-3098) or email (Roxanne@C3wealthadvisors.ca) today to set up your next conversation with us.

Roxanne Arnal is a former Optometrist, Professional Corporation President, and practice owner. Today she is on a mission to Empower You & Your Wealth with Clarity, Confidence & Control.

These articles are for information purposes only and are not a replacement for personal financial planning. Everyone’s circumstances and needs are different. Errors and Omissions exempt.

ROXANNE ARNAL,

Optometrist and Certified Financial Planner

Roxanne Arnal graduated from UW School of Optometry in 1995 and is a past-president of the Alberta Association of Optometrists (AAO) and the Canadian Association of Optometry Students (CAOS).  She subsequently built a thriving optometric practice in rural Alberta.

Roxanne took the decision in  2012 to leave optometry and become a financial planning professional.  She now focuses on providing services to Optometrists with a plan to parlay her unique expertise to help optometric practices and their families across the country meet their goals through astute financial planning and decision making.

Roxanne splits EWO podcast hosting duties with Dr. Glen Chiasson.


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