Patrick Kennedy, tax and estate planning consultant at Canada Life, looks at the pros and cons of assigning policy benefits for tax purposes
Life assurance policies have many facets and features that can easily be overlooked. Many still prevail, which is amazing given the economic and tax landscape they have travelled through. The ability to assign policy benefits (linked to trusts or otherwise) is one of their simple, yet powerful, facets. This must be foremost when considering extracting cash from policies in an efficient and tax-beneficial way. This mechanism is a perfect tool to deflect the tax point from the original owner to a new owner. The benefits of assignment settle on the point that the transaction is not a cha...
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