financial & estate planning jan 28, 2010 brunch presentation

Susan Yao-Arkilander Wealth Management Team

Planning In a Volatile Market

RBC Dominion Securities

2 | WEALTH MANAGEMENT SOLUTIONS

WEALTH MANAGEMENT NEEDSWEALTH MANAGEMENT NEEDS

Client Needs

InsuranceRetirementEstate PlanAssist

ParentsAssist

Children

Income Protection

InvestmentsWills LivingExpenses

Education

Asset ProtectionRRSP

Trusts

Special Needs

IPP / RCA

Heirs Inheritance

Charitable Giving

Taxes

Disability


Will & Estate

ConsultantRobyn Solnik

FinancialPlanner

Piero Mazza

Susan Yao-Arkilander

Investment Advisor

Clients

Susan Yao-Arkilander’s Wealth Management Team www.susanyao.com

Domestic and International

Trust Services

Tax PlanningSupport

RBC Private Banking /

Health Care Banking

RBC Private Banking /

Health Care Banking

Insurance SpecialistAndrew Scace


Managing all aspects of your wealth


Who We Are

”We are a unique Wealth Management Team

supporting your Investment Advisor in

meeting client’s goals, needs and priorities

through a Holistic Planning Approach.”


Comprehensive written financial plan, tailored to each client’s situation and goals

• Plan can be customized to provide financial clarity to individuals with more complex financial circumstances

• Whether married or single, still working or already retired, Financial Plan will be tailored to each client’s situation

Gives client an in-depth snap shot of financial situation, now and in future

Identifies strategies to maximize a client’s situation

Provides alternates or “what if” scenarios

Financial Planning


Financial Planning

Each plan is prepared to address various financial planning needs, including:

• Cash and debt management• Tax planning• Investment planning• Retirement planning• Risk management • Estate planning

Financial Plan provides a clear indication of ability to meet objectives, with detailed recommendations based on specific needs


Projection into the Future

Based on stated objectives, strategies and savings ability, we prepare a long-term projection of cash flow and net worth (graphs and detailed charts provided)

Mike Pre-Retired Retired Deceased Sue Pre-Retired Retired Deceased

2008 2012 2016 2020 2024 2028 2032 2036 2040 20440K

50K

100K

150K

200K

250K

300K

350K

400K

450KExpenses (Except Taxes)

Total Tax

Total Funds Received

2008 2012 2016 2020 2024 2028 2032 2036 2040 20440.0M

0.5M

1.0M

1.5M

2.0M

2.5M

3.0M

3.5M

4.0M

4.5MTotal Net Worth

Lifestyle Assets Total Net WorthYear 2047Amount 4,227,140


Projection into the Future

We address specific goals such as funding children’s education or exercising stock options, as appropriate

We provide direction on the most tax-efficient manner to access funds from registered and non-registered savings or any investment holding companies

Year Age(s) Employment

Income Investment

Income Government

Benefits RRIF

Income Total

Income After Tax Income

Total Lifestyle

Expenses Capital

Redeemed 2008 50/50 235,000 17,184 0 0 252,184 194,842 93,134 0 2009 51/51 242,050 20,083 0 0 262,133 195,766 95,684 0 2010 52/52 249,312 23,663 0 0 272,974 203,862 146,051 0 2011 53/53 256,791 24,946 0 0 281,736 210,405 101,016 0 2012 54/54 264,495 28,952 0 0 293,447 218,933 103,802 0 2013 55/55 272,429 33,262 0 0 305,692 227,838 106,672 0 2014 56/56 280,602 37,894 0 0 318,496 237,139 109,629 0 2015 57/57 289,020 42,866 0 0 331,886 246,853 168,018 0 2016 58/58 297,691 45,228 0 0 342,919 255,020 115,810 0 2017 59/59 306,622 50,793 0 0 357,415 265,518 119,040 0 2018 60/60 315,820 56,757 0 0 397,577 301,485 122,367 0 2019 61/61 0 76,424 21,381 0 149,806 144,299 146,558 63,285 2020 62/62 0 79,933 22,023 0 153,956 133,234 214,869 88,758 2025 67/67 0 79,204 45,630 0 170,834 150,612 239,663 97,319 2030 72/72 0 45,616 52,898 197,475 341,988 253,924 277,835 33,493 2035 77/77 0 57,750 61,323 203,780 368,853 281,599 322,087 51,597 2040 82/82 0 43,908 71,090 210,113 371,111 290,365 257,508 0 2045 87/87 0 51,338 82,413 216,008 395,758 317,154 298,523 0 2046 88/88 0 52,709 84,885 217,152 400,746 322,136 307,478 716 2047 89/89 0 55,431 87,432 218,174 407,036 328,234 316,703 4,307


Risk Management

Cash flow and net-worth projections are prepared to illustrate the impact on surviving family members if the client or their spouse were to die in the next year

This analysis determines if the wealth accumulated, combined with any insurance coverage, is sufficient to mitigate the risk of an unexpected death

If important to the client’s personal situation, we will provide a similar analysis that will address the risk of becoming disabled


Estate Planning

Estate plan review highlights the various ways to transfer the accumulated wealth to their designated beneficiaries

We will review the taxes that will be payable upon death at each year until projected life expectancy

We will also provide recommendations to address stated objectives such as asset protection, charitable intentions, income splitting or providing for a specific family member


Action Plan

Throughout the plan, we provide Action Items

We provide a single page Action Plan that summarizes the key recommendations indicated in the previous sections, with appropriate time frames for follow-up

Action Plan also provides a clear guideline for each client to help monitor implementation

Financial Plan updates suggested every 3 to 5 years, or if there is a material change in a client’s situation


Typical Meeting

Review assets and ownership

Discuss tax implications of death

Discuss client’s estate planning objectives

Review Estate Planning Documentation

Provide information on the tax effective transition of wealth to family or charity

Follow up Report


Some Estate Planning Strategies

Testamentary Trusts for income splitting

Multiple Wills to save probate on private company shares

Spousal Trusts for second marriages

Use of Joint Tenancy

Beneficiary designations

US friendly Wills

Basic Will planning issues and structure of Will


Planning considerations continued

US Estate Tax for vacation properties

Business succession planning

Estate Freezes

Insurance to pay tax and/or equalize estate

Cottage Succession Planning


Other Planning Considerations

Charitable Giving – DS Charitable Gift Fund

Living Trusts – the DS Family Trust

Planning for disabled beneficiaries

Powers of Attorney

Selection of Executor


Estate Planning Specialist

Working with Investment Advisor’s clients to provide both personal and corporate insurance solutions to help increase net worth, reduce the impact of taxation and ensure your wealth is transferred to your heirs.

Relationship with the 9 insurance companies in Canada

Manulife Financial, Canada Life, Sun Life, Industrial Alliance, RBC Insurance, Standard Life, AIG, Transamerica and Empire Life


Solutions

Personal Income Protection

Mortgage/Loan Protection

Capital Gains/Estate Preservation

Tax Sheltering/Transfer of Wealth

Income Needs

Corporate Buy/Sell

Key Person

Business Succession

Professional Corp/OPCO/HOLDCO

Tax Sheltering/Transfer of Wealth

Income Needs


Our Process

Review Existing Insurance

Review Financial Plan or Will and Estate Report

Client Goals and Objectives

Corporate or Personal – Ownership of assets

Liabilities and Taxes

Apply for insurance


“Canadians pay too much tax” -

You’re taxed when you earn

You’re taxed when you save

You’re taxed when you spend

You’re taxed when you die

So . . . what’s left for you and your family?

Jim Flaherty


Typical asset allocation

Fixed Income

Non-Registered

House

Business

Real Estate

Registered


Insurance as Another Asset Pool

Fixed Income

Non-Registered

House

Business

Real Estate

Registered

Life Insurance

Non-Registered

House

Business

Real Estate

Registered

Fixed Income


Tax-exempt insurance

• $ 300,000 of surplus assets are repositioned and deposited over five years into a $1MM tax-exempt Universal Life Solution.

• Non-Registered balanced portfolio, growing at 6.25%, taxed at the highest marginal tax rate.

• Insurance investment growth rate of 5% - tax-exempt on a joint last-to-die basis.

Non-Registered Investment Tax-exempt life Insurance

Year Age Account Estate Value Deposit

Estate

Value

Annual return on

Estate Value

1 51 $300,000 $ 311,569 $60,000 $ 1,454,833 2,325%

2 52 323,628 60,000 1,512,407 354%

3 53 336,199 60,000 1,572,860 157%

4 54 349,306 60,000 1,636,336 95%

5 55 362,973 60,000 1,725,497 65%

10 60 440,650 1,770,726 24%

15 65 536,749 1,857,515 15%

20 70 656,007 1,977,961 11%

25 75 804,480 2,162,817 9%

30 80 989,930 2,419,550 8%


Questions?


Next Step

Speak with your RBC DS Investment advisor to book a meeting.


Attend our Wealth Management Forums visit www.susanyao.com for more information

February 18, 2010 Insured AnnuitiesWith life expectancies increasing and low fixed income yields, annuities are becoming more attractive as a source of tax-effective retirement income. Innovative structuring of annuities to enhance after-tax yields will also be discussed.

March 10, 2010 6:30 p.m.-8:00 p.m. Guaranteed Income for LifeRethinking retirement planning, remove market worries and ensure steady cash flow, tax-efficient, choose when to start or stop receiving income, full access to your savings at anytime.

April 14, 2010 Tax Planning for Health Care ProfessionalsLearn about strategies on tax deferrals, income splitting, creating your own Individual Pension Plan (IPP), Professional Corporation considerations and estate planning considerations.

May 20, 2010 Sale of Business PlanningLearn about strategies on how to multiply your $750,000 capital gains exemption, tax strategies using Charitable foundation, IPP or RCA on sale of assets, and other potential strategies.

June 8, 2010 Business Owner’s Guide to Wealth ManagementTen decisions that can make or break your business

When: 11:00 a.m. to 12:00 noon

as scheduled below (brunch will

be served) except for March 10

Where: RBC Dominion Securities

Inc., 5th floor Board Room

260 East Beaver Creek Rd (on

Hwy 7, west of Hwy 404),

Richmond Hill, Ontario L4B 3M3

RSVP: Phone or email a week

prior to the forum date you wish

to attend;

Contact: Carissa Li, Associate,

phone 905-764-3585, 1-800-268-

6959,or Susan Yao-Arkilander,

Host Advisor, 905 764 2229 or

email

[email protected]


Thank you

This presentation has been prepared for use by RBC Dominion Securities Inc.*, Royal Mutual Funds Inc., RBC Private Counsel Inc. and RBC DS Financial Services Inc., Member Companies under RBC Investments. The Member Companies, Royal Bank of Canada, Royal Trust Corporation of Canada and The Royal Trust Company are separate corporate entities which are affiliated. In Quebec, financial planning services are provided by Royal Mutual Funds Inc. or RBC DS Financial Services Inc. and each is licensed as a financial services firm in that province. In the rest of Canada, financial planning services are available through RBC Dominion Securities Inc., Royal Mutual Funds Inc. or RBC Private Counsel Inc. Insurance products are only offered through RBC DS Financial Services Inc., RBC DS Financial Services Inc., RBC DS Financial Services Inc., subsidiaries of RBC Dominion Securities. *Member CIPF.

The strategies, advice and technical content in this presentation are provided for the general guidance and benefit of our clients, based on information that we believe to be accurate, but we cannot guarantee its accuracy or completeness.This presentation is not intended as nor does it constitute legal or tax advice. Clients should consult their own lawyer, accountant or other professional advisor when planning to implement a strategy. This will ensure that their own circumstances have been considered properly and that action is taken on the latest available information. Interest rates, market conditions, tax rules, and other investment factors are subject to change.

™Trademark of Royal Bank of Canada, used under licence. RBC Investments is a registered trademark of Royal Bank of Canada, used under licence. ©Royal Bank of Canada 2008.

financial & estate planning jan 28, 2010 brunch presentation

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