By saving money and investing wisely, you ensure that more of your savings will go directly to your loved ones. For any savings you’ve accumulated outside of your TFSA or RRSP, a segregated fund provides both protection from market volatility and direct beneficiary benefits, ensuring your loved ones don’t have to pay taxes and legal or accounting fees.
So what are segregated funds?
Segregated funds are a type of investment vehicle offered by insurance companies. They combine the features of mutual funds with insurance protection. These funds invest in a variety of assets such as stocks, bonds, and other securities.
One key feature of segregated funds is the guarantee of principal protection, typically offered as part of the insurance component. This means that upon maturity or death, you or your beneficiaries will receive either the original amount invested or a minimum percentage of it, regardless of market performance.
Furthermore, segregated funds offer direct beneficiary benefits. Upon the death of the investor, the proceeds bypass the estate and are paid directly to the named beneficiaries. This can help avoid probate fees, legal expenses, and delays associated with estate settlement. Additionally, the proceeds are typically protected from creditors of the estate, providing an added level of security for beneficiaries.
What Legacy would you prefer?
*All costs above are estimates provided for this particular example and we do not guarantee their accuracy or completeness. Estate taxes vary across Canada and in this example are based on Ontario. Legal and accounting fees will vary based on the complexity of the estate settlement. Executor fees vary and may be waived.
** For illustrative purposes only. This exemplifies a market decline of 10%. Please note that market volatility remains uncertain and this number will vary.
