​
Legato Wealth Management
  • Home
  • About
    • Mission & Principles
    • Our People
    • Strategic Relationships
    • Community
    • Learning & Connecting
    • Contact
    • Meeting Legato >
      • Meeting Checklists
      • Parking
      • Review Online
  • Solutions
    • Creating & Distributing Wealth
    • Key Understandings
    • Legato Plans
    • Philanthropy
    • Steps to Legato1
    • Policy Search
    • Will Search
  • Articles
    • The Pair: Estate Freeze & Legato Plan
    • 70 Years and 214 Days
    • Tax Apportionment in Estate Planning
    • Beneficiary Designations and Resulting Trusts Revisited
    • Reviewing A Shareholder's Agreement
    • Part 1: Legacy Gifting Private Company Shares
    • Part 2: Legacy Gifting Private Company Shares
    • Life Insurance As Fixed Income Plus
    • Smooth Transitions
    • Reduce Estate Shrinkage
    • Take Time For Your Legacy
    • Protect Your GrandChildren
    • Another Asset Class
    • Take Five
    • Inheritance & Taxation
    • Cash Me If You Can
    • Think Wider
    • Succession Planning
    • Legato 3
    • Retirement Income
    • Look Across
    • Lest We Forget
    • Partners In Search For A Cure
Picture
Insuring a Healthy Relative
​
Published in March 2019 by Don Anderson
A familiar financial debate considers whether to invest in an RRSP or a tax-free savings account in order to get tax-protected growth of your investment funds. Each of these programs have limits with respect to the maximum amount that can be invested. What if there was a way to create investment growth in Canada, protected from tax, so you can save towards your retirement?
 
Let's consider a young adult named Amir. Amir has a parent in their late 50s to early 70s who is in decent health. If eligible for a Legato Plan, that parent could help Amir could create an effective financial savings vehicle for his future retirement. 
 
Here's one way in which this could work. Amir, perhaps in concert with his parent, decides to put his investment funds into a Legato Plan every year for
a self-determined ten- or twenty-year period. Once those contributions have been made for the pre-planned number of years, his Legato Plan is considered paid up in full and no further deposits are required. 

The Legato Plan placed on the life of his parent offers tax protected investing
, including an additional payout to be received when this parent passes on. That payout accelerates the return on his deposited capital to a level significantly higher than what Amir would have received had he placed those monies in taxable investments. Remember, Amir had exhausted his tax-free RRSP and TFSA room. He would have made taxable investments until he discovered the Legato Plan's ability to open up a different means of tax-free investing.  

On the passing of his parent, the policy payout should flow directly to Amir, outside his parent's estate within a month of their passing, tax-free. In addition, and very importantly to many, the amounts and details of every Legato Plan remain private from the outside world. Unlike finds that flow through an estate which are governed by a will, Legato Plans do not become available to the general public.   


Some people find this concept of insuring their parents for the benefit of the "next generation" like Amir to be strange; yet, once understood, a Legato Plan can be an incredibly effective financial strategy when looking to develop savings for retirement. 
  

Don Anderson
Legato

Copyright 2023- Legato Wealth Management Inc. 

  • Home
  • About
    • Mission & Principles
    • Our People
    • Strategic Relationships
    • Community
    • Learning & Connecting
    • Contact
    • Meeting Legato >
      • Meeting Checklists
      • Parking
      • Review Online
  • Solutions
    • Creating & Distributing Wealth
    • Key Understandings
    • Legato Plans
    • Philanthropy
    • Steps to Legato1
    • Policy Search
    • Will Search
  • Articles
    • The Pair: Estate Freeze & Legato Plan
    • 70 Years and 214 Days
    • Tax Apportionment in Estate Planning
    • Beneficiary Designations and Resulting Trusts Revisited
    • Reviewing A Shareholder's Agreement
    • Part 1: Legacy Gifting Private Company Shares
    • Part 2: Legacy Gifting Private Company Shares
    • Life Insurance As Fixed Income Plus
    • Smooth Transitions
    • Reduce Estate Shrinkage
    • Take Time For Your Legacy
    • Protect Your GrandChildren
    • Another Asset Class
    • Take Five
    • Inheritance & Taxation
    • Cash Me If You Can
    • Think Wider
    • Succession Planning
    • Legato 3
    • Retirement Income
    • Look Across
    • Lest We Forget
    • Partners In Search For A Cure