ZLC’s New Business Family Succession Division

It’s estimated that 75% of family business owners plan to retire over the next generation. Interestingly, around 70% of family businesses never make it intact to the second generation, and only 10% ever make it to the third generation. This is not surprising given that two thirds of business owners have never discussed succession with their family. Obviously families need a better approach to family business succession planning.

ZLC Financial Group is pleased to announce our new Business Family Succession Division. Our team of professionals offer a fee-based service to assist family business owners in transitioning their business to the next generation in a manner that will maximize business values, minimize costs and taxes, and at the same time maintain family harmony.

The four main components of this process are:

• Discovery: A full discussion with the business owner takes place to determine the parameters of the succession plan, which then defines ZLC’s mandate. Where necessary and appropriate, we meet with all family members in an attempt to establish full and necessary communication to ensure everyone is on board with the planning.

• Evaluation: After a thorough review, ZLC will identify the issues that need to be addressed. It is here that alternative solutions are crafted, reviewed and recommended.

• Implementation: Once a course of action has been agreed upon, ZLC works with the professional advisors in the documentation and re-organization (if necessary) process. At this point, implementing solutions may encompass legal, accounting, insurance and investment components.

• Monitoring: ZLC will meet with the family and their advisors regularly to ensure that the solutions implemented are still relevant in view of any subsequent taxation, regulatory or family changes.

Our fee-based service encompasses the Discovery and Evaluation components, which in our experience are the two most time consuming aspects of the process. The flat fee allows for a full and comprehensive discussion without concern for an hourly cost, or the commitment to purchase a product.

It is never too soon to start the planning process; however, often it’s left much too late.

July 27th, 2011 | Posted in Business Family Succession, Business Succession | Comments Off

Pictures from the 26th Annual Charity Golf Tournament

Below are pictures from ZLC’s 26th Annual Charity Golf Tournament at the Richmond Country Club. We would like to extend a big thanks to each of our sponsors, donors, players and volunteers for making this day such a success. The Kids Up Front charity will truly benefit from the money raised on Monday. Thank you!

Gold Sponsors


Additional Sponsors:

IA Clarington Investments Inc., Angus One Professional Recruitment Ltd., BMO Insurance, CI Investments, Clark Wilson LLP, Coast Hotels & Resorts, Equitable Life Insurance Company of Canada, Famous Foods, Fidelity Investments Canada, Glotman Simpson Consulting Engineers, Great-West Life, Green Shield Canada, HSBC Bank Canada, Inline Computer Support Inc., Image Group Inc., JMAX Global Distributors Inc, Mackenzie Financial Corporation, Manulife Group, Marin Investments Limited, Maxwell Floors Ltd., Mill Creek Coffee Company, Murphy Battista Lawyers, North American Telecommunications Group, Nuheat Industries Limited, Qtrade Financial, RBC Insurance, Standard Life Canada, Varshney Capital Corp., Westcoast Actuaries Inc., Westshore Insurance Services Inc., Williams Moving & Storage, Worldsource Wealth Management

July 13th, 2011 | Posted in Community, Philanthropy, Updates | Tagged , | Comments Off

26th Annual Charity Golf Tournament Support and Sponsors

On July 11th, we will be holding our 26th annual Charity Golf Tournament. Throughout the years, the charity tournament has raised over $832,000 for charities including the Heart & Stroke Foundation of B.C. and Yukon and the Juvenile Diabetes Research Foundation.

For the second year, we have chosen to support the Kids Up Front charity, an organization that provides access to arts, culture, sports and recreation for kids who otherwise would not have the opportunity. We are grateful to the following gold and tee/green sponsors. If you would like to participate, please email golf@zlc.net.

Gold Sponsors


Tee/Green Sponsors

Angus One Professional Recruitment Ltd.
BMO Insurance
CI Investments
Clark Wilson LLP
Coast Hotels & Resorts
Equitable Life Insurance Company of Canada
Famous Foods, Fidelity Investments Canada
Glotman Simpson Consulting Engineers
Great-West Life
Green Shield Canada
HSBC Bank Canada
IA Clarington Investments Inc.
Inline Computer Support Inc.
Image Group Inc.
JMAX Global Distributors Inc
Mackenzie Financial Corporation
Manulife Group
Marin Investments Limited
Maxwell Floors Ltd.
Mill Creek Coffee Company
Murphy Battista Lawyers
North American Telecommunications Group
Nuheat Industries Limited
Qtrade Financial
RBC Insurance
Standard Life Canada
Varshney Capital Corp.
Westcoast Actuaries Inc.
Westshore Insurance Services Inc.
Williams Moving & Storage
Worldsource Wealth Management

July 5th, 2011 | Posted in Community, Philanthropy, Updates | Tagged , | Comments Off

Pay Yourself Instead of the Government

Consider this: if you live in British Columbia, deferring property taxes will allow you pay yourself instead of the government. How? Deferring your property tax until deciding to sell your home allows you to increase your income and/or leave a larger estate to your loved ones.

Do you meet the criteria?
You must be a Canadian citizen or permanent resident who has lived in British Columbia for at least one year and is:

  • 55 years or older,
  • A surviving spouse, or
  • A person with a disability as defined by regulation

You also must have and maintain a minimum equity of 25% of the current B.C. assessment value, after deducting the upper limit of all outstanding mortgages, lines of credit and other charges on your home.
The money you save by deferring your property taxes can be used to increase your income. If, however, you intend to remain in your home for life, there is another option to consider: direct the savings into a program which will provide the funds to pay your future property taxes and also increase the size of the estate you leave for your loved ones.

Your benefit depends on several factors, including:

  • The ages of you and your spouse
  • Your life expectancy
  • Inflation
  • Investment return

If you’re interested in deferring property taxes, it is advisable to work with a financial advisor to identify a strategy specific to your goals.

June 22nd, 2011 | Posted in Estate Planning, Taxes | Tagged , | Leave a comment

Do retirees need life insurance?

As we get older, our insurance needs change as our dependents grow up, and we take care of our debts. As you enter a new phase in your life you may have new goals and priorities. Consider coverage to take care of your other financial and estate plans.

Below are some questions and answers that will help you determine if life insurance after retirement can be of value to you.

Do you want to leave an inheritance for your family?
Insurance lets you enjoy your retirement savings while ensuring your spouse and children will inherit tax-free money when you pass away. It can also allow you to leave a bigger estate by covering the taxes payable on your retirement savings plans, retirement income funds, vacation home and/or investments when you die.

You can leave assets to your spouse without triggering capital gains tax, but when your spouse dies, all that tax comes due.

Buying insurance on both of your lives can make sure cash is available to cover the tax and leave more for your heirs.

Is there someone in your family dependent on you for help, such as a disabled grandchild or parent?
You can buy a policy and designate your grandchild, for instance. This will make sure they have access to tax-free money for their education, wedding or down payment on their own home.

Have you been married more than once?
A second marriage presents you with potentially complicated estate planning implications. You or your spouse may have children from a previous message and/or plan to have children together. New obligations may need to be considered. You may be able to rollover assets to your second spouse tax-free, then use life insurance to equalize distributions to other family members.

Is there a family cabin or cottage to be kept in the family?
Insurance can create the cash needed to pay capital gains tax due on the property when you die. This way, the cabin can continue to be enjoyed and passed along, without the worry that your children will need to sell it to pay the government.

Do you want to fund a favourite charity or a cause?
You can transfer an existing policy or buy a new policy. A gift of insurance can have significant tax savings for you now or for your estate later on.

June 14th, 2011 | Posted in Estate Planning, Insurance, Investments, Retirement Planning | Tagged , , , | Leave a comment

How to Minimize Costs with Probate Planning

First of all, what is probate other than a term mentioned in relation to wills and estate planning? It’s the process of authenticating your will to establish it as valid – it is the final version of your will. Probate fees are paid whenever an asset transfers as a result of death. If you die and leave all your assets to your spouse, the assets could be subject to these fees. When your spouse dies, the fees could then be paid once again.

Drawbacks of probate

Probate can be time-consuming and expensive. The process can take months or sometimes years to complete. During that time, your executor can’t settle the estate or make any disbursements from it. With a long delay, your beneficiaries may face financial hardship. As well, all documents (your assets, liabilities and will) become available to the public.

Tips to avoid or minimize probate costs:

  • Give it away before you die: Consider giving away assets in advance, being careful not to trigger capital gains tax.
  • Register or re-register assets in joint tenancy with rights of survivorship: Watch not to trigger capital gains or property transfer taxes, attribution rules, or to take extra risks if the joint tenant is not your spouse.
  • Establish an inter-vivos trust: Gift assets to a trust for the benefit of a beneficiary. You no longer own the assets, but you may be a trustee and still exercise a degree of control.
  • Establish a spousal trust in your will: This will not reduce your probate fees, but it may avoid probate on your spouse’s death. Your spouse can enjoy the trust property and spend the income, and when they die, the property then passes directly to residual beneficiaries, bypassing your spouse’s estate. This usually results in tax savings.
  • Invest in insurance company investments: Insurance companies offer investments similar to term deposits and mutual funds.
  • Establish multiple wills: Separate your assets into those that must be probated, those that don’t require probate, and those that can or must be probated in another (hopefully lower cost) jurisdiction.
June 7th, 2011 | Posted in Estate Planning | Tagged , , | Leave a comment

Why you need an insurance audit

Once you’ve purchased insurance and the contract is in your hands, do you review it? Completing an insurance audit is a final and crucial step in securing coverage. It ensures you have a thorough understanding of the contract obligations and that they are actually in force.

An audit will:

  • Check that any assignment was removed from the policies, if applicable
  • Verify that you can use the cash value of your policy to pay for future premiums
  • Check if the policy was properly drawn up: i.e. owner, beneficiary and premium payor. A taxable situation could be waiting around the corner.
  • Disability contracts are tricky to evaluate; pay extra attention to the “definitions” under contractual obligations:
    • Own/Regular/Any Occupation
    • Residual/Partial coverage
    • Waiting Period
    • Accumulated days to satisfy waiting period, etc.

Business checklist

An audit will assess whether your business should pay for disability contracts and deduct the premiums as a business expense. It will check your will to ensure there are no beneficiary conflicts or unintended tax consequences.

Premium eligibility

Did you know that your existing policy may qualify for a reduction of premiums or rating if there has been a relevant situational change? Here are some examples of where you could qualify for reduced premiums:

  • You have stopped smoking for one year,
  • You have improved health, or
  • You no longer participate in hazardous sports.

An insurance audit can also help you determine if better premiums could be obtained for the same coverage. Healthy clients may find that they qualify for “preferred” underwriting at reduced premiums. Moreover, new programs may have become available that you should be considering.

June 1st, 2011 | Posted in Insurance | Tagged , | Leave a comment

The downside to DIY portfolio managing

Do-it-yourself portfolios provide choice, allowing you to pick your own investments and make changes as desired. However, this approach requires constant monitoring, analysis and rebalancing. It also involves considerable ongoing time and effort.

Want a time-saving solution? Consider professionally managed portfolios, which are easy to implement and understand. These investment options provide several valuable benefits, including:

  • Unmatched diversification
  • Automatic rebalancing of your assets
  • Minimal ongoing monitoring and analysis required
  • Provides comprehensive and personalized financial reporting

Leave it to the experts
Professional management ensures you don’t put all your eggs in one basket. Since different asset classes don’t move in lock step, stocks may be up when bonds are down and vice versa. The same applies to different geographic regions and investment styles. Diversification ensures a portion of your investment is always working.

Rebalancing regularly is also important to maintain the asset mix appropriate for your financial situation, time frame and risk tolerance. Managed portfolios rebalance for you at least quarterly.

Another advantage is that managed money reinforces a long term investment time horizon, eliminating the temptation to track each fund’s performance and wonder whether to sell. A properly diversified portfolio should have components which zig and zag at different times, thus ensuring lower volatility and more consistent returns.

Options available for every type of investor
Investment management companies offer professionally managed portfolios tailored to different investor risk tolerance and return objectives. For each level of risk, there is an optimal portfolio that offers the greatest expected returns, and proper diversification increases potential return and lowers risk.

Portfolios typically range from very conservative portfolios focused on preservation of capital, all the way up to foreign and maximum growth focused portfolios. Many offer a choice of tax advantaged investments and all can easily be set up to provide regular cash flow.

Depending on your personal priorities and financial objectives, managed portfolios can consist of pooled funds, mutual funds or segregated funds. Most offer best in class multi managers. Many also provide independent monitoring and consulting assistance on asset mix and manager selection from independent asset consultants.

May 25th, 2011 | Posted in General, Investments | Tagged , , | Leave a comment

Severance Survival: 6 Tips to Survive Unemployment

Takeovers, mergers and layoffs have become a way of life, and many of us will experience an unexpected job loss at least once in our careers. Loss of employment can be a traumatic experience and is often accompanied by concerns for the future. Here are some tips to help you get through this difficult period:

1. Don’t panic
Focus on your next position rather than the reasons for losing the last one. Don’t burn your bridges. Stay polite and focus on making sure your employer meets their obligations. Make the most of your contacts. The more people in your professional life that you tell about your separation, the wider your network, and the sooner you’ll be re-employed. Above all, remember to stay positive.

2. Know your rights
If you’re dismissed without cause, you are entitled to notice or compensation. The amount of reasonable notice (or payment) depends on age, length of service, degree of responsibility, position and ease of finding similar employment.

3. Understand the tax consequences
Any payments received are considered taxable income in the year you receive them. To reduce your tax bill, try to negotiate an “installment payment” with your employer, to spread the payment over two taxation years.

4. Review life and health coverage
Many employees receive basic life and health insurance from their employers, but when employment ends, so does the coverage. Consider purchasing individual coverage to protect yourself no matter where you work. For those who don’t qualify for individual coverage because of poor health, check if you can transfer your existing group coverage to individual coverage. This option usually ends 30 days after your employment ends.

5. Financial review
Take the time to review your finances, including a budget and an emergency fund. It is important to examine which income and tax planning strategies best meet your needs.

6. Use outplacement services
If your employer has established outplacement services, take advantage of them. These services rarely find a job for you directly, but they help you prepare your resume, coach you for job interviews and help you hone your job-seeking skills. They also give you free access to computers, phones, fax machines and job listings.

May 17th, 2011 | Posted in Insurance | Tagged , | Leave a comment

How to protect your business from creditors: Part II

In recent years, many professionals have seen their professional liability insurance both increase in cost and decrease in benefit. While professional liability coverage remains a solid cornerstone for this group of business people, it is important to ensure personal assets are protected. Last week we looked at two strategies that business owners can use to reduce the risk of a personal creditor claim. Below are two more techniques which can be used to lessen this risk.

Segregated Funds

Strategies to protect investment assets are commonly used. Insurance-based investments, often referred to as segregated funds, are exempt from attack by creditors by virtue of the specific provisions in the provincial Insurance Act, provided a number of requirements are met. The Act provides this protection where a spouse, child, grandchild or parent of the account holder is named as a beneficiary to the account.

Those segregated funds bear only a glancing connection with life insurance. They are first and foremost investments, and their returns should be competitive with other comparable investment products. Segregated funds can be held as RRSPs and as non-registered accounts.

Individual Pension Plans

Individual pension plans also provide creditor protection to the account holder, again by virtue of specific provisions in the applicable provincial legislation. To qualify for such a plan, business owners must be an employee of their corporation. Aside from the benefit of creditor protection, these plans also allow for substantially higher current contributions than are available for RRSPs. They can also permit substantial contributions for past service in the right circumstances.

The potential for successfully protecting assets increases when asset protection strategies have been put in place long before any financial difficulties arise. As intention is an important element in attacking asset-protection techniques, it is also preferable to implement such strategies where they have a personal or business purpose, such as tax minimizing or estate planning.

If properly implemented, asset-protection strategies can provide a measure of protection against an under-insured claim or other financial advisor. Your ZLC advisor is available to help you determine which strategy meets your needs.

May 10th, 2011 | Posted in General, Insurance, Investments, Retirement Planning | Tagged , , , , , | Leave a comment