A lasting legacy for you and your family

Frequently Asked Questions

• How much do I need to retire?

  The main factors that will affect this are:
  cash flow needs in retirement: the higher the cash flow requirement, the greater the capital required return on your capital: the lower the return on capital, the greater the amount of capital required length of retirement (life expectancy): the earlier retirement, the longer the likely retirement period, and therefore, the greater the capital required.

• Should I bring key employees into share ownership in my company?

  Bringing a key employee into ownership unless part of an ultimate transition strategy of ownership should be carefully considered. Consideration whether another strategy such as a bonus plan or phantom share plan can achieve the same result of tying the employee’s remuneration to business success. Adding an additional shareholder creates complexity for the tax planning of the existing shareholder as well as additional reporting requirements.

• Who should I transition/sell my business to?

  There are broadly two options insiders (family and/or employees) or outsiders (arms-length purchaser). The larger and more complex the business, the more likely it becomes that a sale will occur to a third party, often a competitor or a strategic buyer. There is normally less of a market for smaller businesses, and often being more of an alignment to a sale to a qualified insider. A sale to an insider typically allows the seller to maintain a
  role in the business for a longer time. Still, with the downside, this type of deal will often require a vendor financing element, so more risk for the seller. A sale to insiders might also be favoured by the seller so that there is a higher likelihood of preservation of culture and legacy.

• Do I need a will?

  If you die without a will, your assets will be divided intestate according to a laid-out formula. The cost of administering your estate will increase. As your assets increase, the downsides to not having a will are likely to increase. By not having a will, you will be giving up the right to appoint guardians of your minor children.

• Do I need a family trust?

  The primary purposes of trusts are to 1) Manage assets for the benefit of someone who cannot manage the assets for themselves,2) hold assets for the benefit of a spouse during their lifetime, but defining the ultimate distribution (spousal trusts), 3) Protect assets for the beneficiary against creditors and spouses, 4) tax planning using income splitting, 5) estate planning by freezing the estate tax liability and the use a Joint Partner or Alter
  Ego trust after age 65.

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