This episode is part 2 of episode 92 with Trevor Parry. Trevor is also a past guest from episode 5.
We continue the discussion of Trevor’s recommendations for the entrepreneur or business owner to set up as a strategy or goal.
Is there a role for permanent life insurance in planning? It is a deferral product. Starting with a review of tax liabilities, shareholders (family or other business partners), you need to look at redemption strategies. The best way to deal with these needs and liabilities is pre-funded.
The estate is like an orange, it is cut, and it gets squeezed, the government takes the “juice” out and you are left with the rind. The insurance covers the “juice” – the good parts. It is not the person who has died who does the sale of the business, it is the heirs, and there is a time-sensitive date. With a properly funded buy-sell agreement, a tax strategy in place, using permanent life insurance, the money is there at the time when it is needed – the cheque is delivered days after the entrepreneur has passed.
Charity is the last great frontier in tax planning. Would you rather that the value of your business go to the government or would you rather endow a charitable foundation? You can spend your money better than the government can.
Critical illness insurance is another strategy that can be used, although science is changing how people may qualify for this type of coverage. Genetic testing is a big disruption that can impact this. Science is making discoveries every day. However, insurance is still based on dollars and cents.
A lively conversation on politics, voters, and housing markets wraps up the episode.
TRP Strategy Group: trevorparry.com
Lesniewski Moore Consulting Group: http://lmcgroup.ca