- Grenby. _ DOLLARS AND SENSE THE BUDGET and you. Now that the dust has settled ‘from. the latest federal bud-. “get, let’s take a look at some - of. the key changes that'could ‘ affect:you:— and what steps 2you ‘should consider. (Note:: these new rules apply ‘only to 1994 ‘and future fax years.) . . Y BUDGET: Registered retire-; ment savings plans have been left “untouched — for the moment. But . ‘Finance Minister Paul Martin’ : announcéd. a study’ of all reliremen : income plans. . 2 YOU: Take miximum advan “rule changes cut into their tax: ben- 66 Although the deadline for the 1993 tax year has passed, you should start your 1994 RRSP contribution now. 99 your income and taxed). Could you get at least some of the money from another source tc help buy your home and so lessen. the i impact - on your RRSP? BUDGET: As widely expected, '; Ottawa has killed the $100,000 ~- capital gains exemption. The $500,000 exemption for small business shares and farms survived but is up for review. ' YOU: The good news is you + may still apply your $100,000 ‘exemption to capital gains on investments like securities and . property (other than your principal residence, which is stilt exempt) “without selling or transferring the investments. ; “Tf such investments were worth more on Feb. 22 than when you bought them, when you file your +1994 tax return you can declare : ‘enough’ of the gain to use up your ‘exemption. ’_ Example: You paid $60, 000 for your securities, revenue property, - summer cottage, etc. Value on Feb. '22' was $140,000. On your 1994 tax retum, you can declare any efits. Although the deadline for the |», value up to $140,000 to use up . ‘your. 1994 contribution, including gny unused/catchup mount ‘from - If your, taxable i income is more an $30,000, every $!,000 you “contribute will save you at least $400 tax and in some Cases more: than $500. But if Ottawa changes ; this deduction to a tax credit, for example, your.tax saving could be - Sui to only about $265 for every. $1,000 contribution. ‘ BUDGET: The RRSP/Home: Buyers’ Plan has been extended «. indefinitely (for now) for “first-~ * home buyers, (that i is, you or your spouse haven't owned a pri ‘cipal residence in ‘the Past five was : Borrowing up to $20, 600 “from your RRSP to help buy your | - home can make personal as well as "Financial sense: But before'you * : ‘take out the money, caiculate how: <“ much the loss of tax-sheltered nvestment growth over the years, caused by this withdrawal will: “reduce your RRSP at retirement. } This loss,will be even greater if: 7 a “you don’t pay back the RRSP loan. “Gn which case the’amount you a should have repaid will be added io- AVIS M. LAPHAM - RLF.P..CLU,CH.F.C.- Chartered Financial Consultant For your personal, no - obligation, financial review _ call now... #300 - 1497 Marine Drive, - West Vancouver, B.C. V7T 1B8. your remaining capital gains’ exemption; remember to apply the ; ~” pro-rating rule for real property -- which took effect after February 1992,’ Let's say you declare $125, 000 . “and eventually sell the investmeat * for $160,000. At that point, you'll ‘report only the remaining $35, O60 capital gain. Work through the caiculation in’ ~ Gase you end up with lower tax , - credits and/or an alternative mini- ~ . Tum tax (AMT) bill. Note that.a “cumulative net investment loss :.(CNIL) balance or allowable busi- “ness investment loss (ABIL) will affect the calculation. : ~ As soon as possible, establish - Feb, 22 fair market values for the “relevant investments... ~ BUDGET: The age “amount” (for.those 65 and older) will be reduced if net income exceeds * $25,921 this year, That.could increase your tax bill by up to almost $1,000 by next year. YOU: Use every possible way ta lower your net income. Split’ your CPP pension if your spouse is | 60 or older and pays less tax than you. Have your lower-tax-bracket spouse declare all investment income that can be traced back to’ his/her capital. Perhaps reduce‘ investment income by lending ., “some capital to adult children or otherwise helping them financially (share the purchase of a home?) — £8 long as you are all happy with it and you carefully document the arrangement. ’ BUDGET: You will get a total (federal plus provincial) tax break of about 45% once your charitable donations exceed $200 (instead of $250 for 1993). - YOU: Group your donations to: . - maximize the amount over $200. Make 1995's donations this year; one spouse should claim the ‘other’s donations as well as his/her own, _ BUDGET: The deduction for business meals and entertainment _ has been cut to 50% from 80%. YOU; Do less business over meals (meet in each other’s . offices) and perhaps provide your contact with a relevant magazine subscription (or something else 100% deductible) if you feel that’ s " appropriate. BUDGET: Ouawa will study family trusts.- - YOU: Set upa family trust now if, as in some cases, the tax savings " could exceed the costs even in the first year. : Mike Grenby is a North Shore: based columnist and independent financial adviser wha works with. - individuals; he will answer your "questions in this column as space allows — write to him clo North . Shore News, 1139 Lonsdale Ave., . North Vancouver V7M 214. IN’ TERNATIONAL MANAGEMENT A “Asia Pacific interastional Graduste School of Management (registered onder 1 the Private Post-Secondary Education Act of B.C., and affiliated with the East». Asia Open Institute) invites applications from managers and executives for our eighth intake to this EXECUTIVE MBA program beginaing March (9, 1994 in { our downtown Vancouver premises. \ | ris unique two year program offers: . © a New Zealand government-accredited degree :: © outstanding internationally-experienced faculty © career enrichment, reasonable (ces, tax-deductible © no interference with full-time employment ‘° monthly week-end classes (Saturday & Sunday) Admission requirements: ; , ; ¢ a bachelor’s degree (or equivalent) or professional designation and * at least two years’ significant work experience Further information may be obtained from: Asia Pacific International, Ste. A100, Marine Building | § 355 Burrard St., Vancouver, B.C. VC 2G6. § Vancouver area telephone: 688-3115 i f Other B.C. areas (toll-free) 1-800-661-8788 On Monday, March 7, from 6 to 8 pm the program will be described and enquiries answered in our premises (sec address above). All persons intcrested are welcome to attend. Tea and coffee served. Closing date for xpplications is March 11, 1994, ° Russ Johnston Senior Account * Manager , 1994 - North Shore News - 33 Marlena ‘Quan’ ; Senior Account Manager *’ THE | Let's face it. T hinking about how you want your affairs to be ~ handled after you're gone isn't most people's idea o fun. But, . like'paying taxes, it’s one of life's . necessary. evils, And while you can't escape the | fact that no one lives forever, you can take some important s right now to ensure the afety of whac you've buile dur- “ing your lifetime. The starting poine is your Will’ (see box at right). Your Will does have considerable legal authority. But to ensure that your wishes are carried out prop- etly it’s necessary to appoint one RIGHT EXECUTOR Cpanye. If you have a larger, more com- plicated estate, or if you're con-: sidering setting up one,or more ; ‘trusts in your Will, it’s s,essential , to choose an’ Executor witha: high degre of specialized exper- . - tise. In these cases, consider. 0s." naming a trust company as sole -- Executor or as co-Executor with ©: a family member, If you're naming an individual .~ as Executor, you should make . provisions for the inexpected — "the death of the Executor, or his ~, or her inability co carry‘our che |. responsibilities, -~., Te The best way to handle this is ton or more responsible Executors to’ name a contingent Executor in act for you... .. Simply stated, your ‘Executor, acts as your. “personal represen- ' ; tative,” resolving all financial . aspects of your estate. If you ct the right one, life will be a “fot easier for those who survive : you, Your first thought may be to ask a friend or relative to do the job. . But sticking too close to home isn’t always a good idea. You should consider alf the, alterna- tives before deciding: | @ The starting point is confi- ‘dence — you want someone you * can trust to assume the responsi- bilities of carrying cut the... ~ "instructions in your Will. © The next thing is ability, and ‘the time to carry out the duties. © : You may be surprised at how much work an Executor must, do. / @ You also may want an’: - Executor who can manage |; investments, deal with real estate matters, and handle all-the legal. functions of settling the estate. | “If your estate is fairly simple then your spouse could act as Executor. Before you reach a decision, however, make sure your spouse is comfortable doing it. If not, or if the estate is more complex, then choose someone else. Consider a knowledgeable ;: family friend or relative,, usiness associate, lawyer, or a trust com-__ Review your estate plan in the light of higher probate charges in Ontario and, in all likeli- hood, other provinces. * Where appropriate, take steps . to have assets pass directly to your spouse or other. beneficia- ries without the formality of probate. ¢Take account of family law, the possibility of common disas- ter, and. tax implications. *Since estate planning can be complex, talk to a professional before going ahead. Royal Trust offers estate planning, executor and trustee, services for individuals who have no will or need one reviewed. Ask for details at your branch, _ Your Will, who would take | over: . in such circumstances: This. ‘ensures that the administration * | of your'estate doesn’t fall itito the hands of someone who ..;°.": ‘knows little or nothing about : your affairs. ’ . "1. Make sure that, if possible, your’. Executors are Canadian residents,:. 2. Namea ‘substitute Executor or Executors, - : 3. Set upa trust in your Will for. ms beneficiaries younger than the age ‘of majority." 4, Provide for alternative distribu: tion of your assets in the event. that some or all of your priraary ‘beneficiaries die with you of soon - thereafter. * ; ‘ 5. Specify anyone shat you wis! “exclude i anon sha aclaim against your estate because he.or she is - or claims. to be’ - your ille-. ’. gitimate child.:. rane “6, If you wish to ap; noint a. _ Buardian for your children, say $0 so in your Will. While ‘not binding ‘. fn cours, such a direction will Probably. be persuasive, ’ ROYAL TRUST inivites you to attend one of the: following presentations ‘on: WILLS & ESTAT! ES PLANNING Seminar: Dates & Locations, . ep “in your area. ‘ North Vancouver Branch ; RSVP RUSS 351-8550 “ March 3, 1994 7:00pm-9:00pm March 8, 1994 7: 00pm-9:00pm West Vancouver Branch | __RSVP_ MARLENA 922-3276 March 2, 1994 2pm-ipin March 10, 1994 2pm-4pm No charge for admission, Seating is limited.