Skip to content
News & commentary

Protecting your Investments for Estate Purposes

Home News & Commentary Protecting your Investments for Estate Purposes
Jon Glougie

Jon Glougie

When we invest our money, we have a reasonable expectation that our initial investment will appreciate over time. As we get older, we tend to want to take less investment risk, especially if there is a goal to pass on some of our investments to our beneficiaries. Often seniors feel trapped into investing in GIC’s because they don’t want to take on any investment risk. What most people don’t know is that we can protect some of your investments, for estate purposes, by using Guaranteed Investment Funds or GIFs.  What are Guaranteed Investment Funds (GIFs)?  Guaranteed Investment Funds are a type of investment product offered by insurance companies that allows clients to invest in an equity, bond and/or index fund that can guarantee 100% of your initial investment passes to your beneficiaries while still offering the potential for investment/market growth and guaranteed lifetime income. Any money in a non-registered GIF can pass confidentially directly to beneficiaries, avoiding potential estate friction. This money will also bypass the estate and thus it will avoid probate tax. Because this wealth transfer is confidential it can provide an excellent option if you are gifting money, passing funds unequally between children or grandchildren, and do not want everyone to know where your money is going. All these features do come at a cost, and that cost comes in the form of a higher Management Expense Ratio (MER) than a traditional Mutual Fund.

 

When should you invest in GIFs? In our opinion, the best time to consider investing in GIFs is if you are between the ages 75-90, if you are a GIC investor or if you believe your life expectancy is 10 years or less. Please contact Jon Glougie or Ryan Smillie if you would like to learn more.


This information has been prepared by Luft Financial. Opinions expressed in this article are those of Luft Financial only and do not necessarily reflect those of HollisWealth®. Furthermore, this does not constitute an offer or solicitation to buy or sell any of the securities mentioned. The information contained herein may not apply to all types of investors.

How do we elevate your wealth?

It begins with understanding your needs and creating a comprehensive and tailored financial plan to help reduce tax, manage risk and grow your portfolio over the long term. Learn more about how we help you achieve financial security and peace of mind.

News & commentary

iA Wealth Monthly Market Snapshot

August certainly left its mark on investors, as trade tensions and an inverted yield curve led to a tumultuous month. All of the key equity market gauges we follow ended up in the red, with the exception of Canadian stocks, which were able to eke out a small gain for the month. Click here to […]

Read more
Critical Illness Insurance… it’s not just for adults anymore

Determining Your Life Insurance Needs

Every situation is different and there is no blanket one size fits all formula to determine insurance needs but a good place for most individuals to start is by looking at: Net family income replacement needs: If you earn $100,000 gross annual income or $75,000 net income and you have 10 years until retirement, you […]

Read more
Financial charts & stocks

September 2019 Portfolio Management Team Update

Three Rules to Survive Fall Markets Market & Economic Environment: August saw XSP, the iShares S&P500 ETF that tracks the 500 largest US companies, in Canadian dollars, drop .89%. In Canada XIC, the iShares TSX composite index tracking the Canadian stock market, was up .57%. Year to date XIC is up 15.18% while XSP is […]

Read more