In this episode of Financial Planning for Canadian Business Owners, Jason Pereira, award-winning financial planner, university lecturer, writer, talks with Lee Fernandes, Senior Wealth Consultant at Cidel. Cidel is a company that helps high-wealth Canadians establish structures and planning to help them meet their needs. Lee Fernandes discusses one of Cidel’s core offerings, trust services. This episode provides a general education on what trusts are, how they can be used, common use cases, and why they are beneficial to people.
Episode Highlights:
● 01:12 – Lee Fernandes describes what Cidel is and does.
● 01:53 – What is a trust?
● 03:28 – Jason Pereira provides a simple example of an irrevocable trust.
● 04:20 – They discuss the perception of trusts being scandalous.
● 06:31 – Lee discusses asset protection trusts.
● 09:09 – What questions do Lee’s clients often have?
● 11:51 – Lee clarifies the trustees’ and settlers’ duties.
● 18:17 – How many trustees should you have?
● 22:11 – What is a graduated real estate (GRE)?
● 25:22 – What are the advantages and disadvantages of inheriting?
● 30:53 – Henson Trust is only available to beneficiaries that have disabled needs.
● 33:33 – What are spousal trusts, alter ego Trusts, and foundations?
● 40:00 – Individuals try to set up a private foundation after the beginning August, it’s not going to happen that year.
● 43:58 – Trusts are very useful tools that can be very dynamic.
3 Key Points
1. The three certainties that a trust needs to meet is the certainty of intent,
certainty of subject matter (what), and the certainty of object (for who).
2. Trusts come down to wealth protection and control versus taxation.
3. Trusts now pay the highest marginal tax rate in Canada.
Tweetable Quotes:
● “Cidel is a Canadian-based global financial services company. We are a private bank, so we deal with private clients, both globally and domestic, and the objective is really to work with families to preserve wealth.” – Lee Fernandes
● “If you are setting up a structure, and the true intent of that trust is to asset protect, then look at a different jurisdiction. An asset protection trust doesn’t cross any tax lines. It is tax-neutral.” – Lee Fernandes
● “‘What is it that I need to have to qualify for a trust?’ And it isn’t really about net worth. It is around, what do you need to have the trust for? Let’s have a more meaningful discussion around the use of a trust.” – Lee Fernandes
Resources Mentioned:
● Facebook – Jason Pereira’s Facebook
● LinkedIn – Jason Pereira’s LinkedIn
● FintechImpact.co – Website for Fintech Impact
● jasonpereira.ca – Website
● Linkedin – Lee Fernandes’s
● cidel.com – Website for Cidel
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