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Holding companies are a tax deferral, can be used for income splitting and can take advantage of the capital dividend account credit of life insurance proceeds leaving tax-free money behind. So before you try to wind up your company assets over the next couple of years, triggering tax on dividend income, think about ways you may be able to improve that part of your plan. Rule of thumb: Own and control everything that you might possibly need during your lifetime, keep costs low and leave tax-free buckets behind. GETTING Q If you receive a large tax-paid bucket of cash, you have no choice but to invest it in your personal name. But how will this affect your personal tax bracket every year? How about where and how to invest the proceeds? Equity markets are risky and require extremely active and professional management. Guaranteed investment certificates are no longer a good way to preserve your net worth since you lose money on them each year after taxes and inflation. How do you find a good financial adviser? Here are a couple of tips.

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Certified financial planner Cindy David: the goal for givers is to leave tax-efficient assets. The goal for those getting is to invest the windfall wisely | CINDY DAVID FINANCIAL GROUP

■Ask for referrals: The best way to find a good adviser is to get a referral from someone who has been working together with a professional for many years and has benefited from good advice. Experience is important, but look for education credentials and client references as well. And work with a team of specialists. The complexity of planning is such that the generalist adviser simply cannot be all things to all people. ■Have a plan: You are no different than the person who gifted you the asset. They had a plan for how best to accumulate, spend and gift these assets, and so should you. Work with a financial planner to make sure you are not missing anything. Especially with ongoing changes to legislation, professional advice is more important than ever. É Vancouver-based certified financial planner Cindy David, CFP, CLU, FEA, TEP, is president of Cindy David Financial Group Ltd., which consults to Raymond James Ltd. and other firms. David is the author of Financial First Aid for Canadian Investors: Stop the Bleeding, Start the Healing and Get Your Portfolio on the Road to Recovery.

2016-01-07 10:01 AM