1 WOW WOULD YOU
MANAGE FINAN-
CIALLY IF YOUR
PARTNER DIED ?

"Financ
Mike
Grenby

and sense

USE THE financial focus of
dealing : with your tax return
to review all your money mat-
ters and get your questions

, answered.

QUESTION: |. “I’m. 32, with
$100,000 insurance and three chil-
dren under 11; my husband has no
- insuraice. We have @ big mortgage
and no savings. Should my husband -
have life insurance or at least put
money into an RRSP?” —- LL. |
-ANSWER: If ‘your husband died
today, how would you manage finan-
cially? if your folks would welcome
- you and the kids to live with them, for

+50 INSTEAD OF
LIFE INSURANCE
THE KIDS AND I
COULD MOVE IN

WIT

A: If you have a $1,000 loan out-
standing for one year at 12%, you will
pay $120 interest, “Invest” that $1,000
in the loan and you will keep the $120
in your pocket.

But if you decide to invest the
$1,000 elsewhere and your tax bracket
is 50%, you must find a guaranteed
deposit paying 24%, That would yield

. $240 interest, on which you would pay
$120 tax, leaving the $120 in your
pocket.

Q: ‘I’m 90 and when I die, my

"four children will divide my home,

my only estate. The capital gains tax
rules for 1994 are confusing. Should
I sell my home or transfer it to my
children now to save estaie taxes?”

A: Because this is your principal
residence, you don’t have to wory
about the capital gains tax. And at the
moment, we have no estate taxes.
Adding your children’s names to the
title could save probate fees — but
might cause other problems. Get

example, and you could earn areason- - {

able living, perhaps -your husband
’ doesn’t need insurance.

. Otherwise, he should have cover-
age to pay off all debts and leave you
with enough money to enable you to

‘eam an income...
Contributing to’ an RRSP wouldn't
_ provide the “instant estate” you'd need
if he died now — ‘especially with the
kids still athome. . .°-

Q@: “Should I renew my $11,000
mortgage -— I could manage to
increase the payment to $800 from
my present $545 — or pay. it down”
using all $4,000 of my personal sav-
ings plus my RRSP?” — D.B.

Regular Price

’ Portfolios

‘

A: Use $2,000 of your savings to |

reduce the mortgage and increase your
payments to $800 a month to pay off
the balance within a year. Then contin-’ ;
ue that payment to build up your sav-'
ings. Don’t touch your RRSP.! | |
- Q: “You once wrote paying off a
12% debt is like making up to 24%
guaranteed, I try to impress that on
all our kids but am unsure hew you .
arrive at 24%?" — CM.

Come i in and apply at any Scotiabank branch. This rate is s available on, R month term. aI ne However,”

HERE |S
YOUR INHER-
WANCE-GET

& YOURSELVES
A GooD

expert advice.

Q: “Can i name my daughter as
the beneficiary of my RRSP or
RRIF? I’m single.” — ML.

A: Yes, but unless your child qual-
ifies as u dependent, any balance in
your plan at your death will still be
taxed. See page 34 of the tax guide,
1994 RRSP and Other Registered
Plans for Retirement, available from
er local tax office.

Q: “If I make my $30,000 catch-
up contribution to my RRSP this
year, do I deduct it from this year’s
income or is it spread back over the
years?” — D.C,

A: The. deduction will apply to
your 1995 income.

Mike. Grenby is a North Shore-
based columnist and independent
Jinancial adviser who works with indi-
viduals; he will answer your questions
in this column as space allows (sorry,
he cannot reply individually) —- write
to him clo 2444 Haywood Avenue,
West Vancouver, B.C. V7V 1Y1.

PERSONAL INJURY |

Free Initial Consultation

Douglas W. Lahay
CLARK, WILSON

BARRISTERS & SOLICITORS
800-885 West Georgia Street, Van.
687-5700

24 HOUR MESSAGE 643-3161

§ ICBC's policies are not law. 1 will get

you a fair settlement or trial award.

.. THE RETIREMENT SPECIALISTS .
Monthly income on $50,000 investment

Life Annulty 10 yr, Guarantee ARAL. Minimum

} Male | | Female | Joint | tst¥r. | 10th Yr. | toh Ye Fund Value |
= ll alo
65_|eot

41927 [295.6 | 167.00 424.00 | $65.02 |

ARIF tilustration or a

copy of
our Guide,
call:

925-3101
Solguard Financial Ltd.
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Building better retirement incomes since 1974

This is your enportuity to learn
~> New tax planning strategies |

> The myth of financial security in Canada in
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_ => Implications of the budget for professionals a.

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