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    How to be better organized financially in 2015

    A new year always represents an opportunity to do things differently. Some people set specific goals with action plans, others have a general sense of what they want to improve and act on it. According to a recent study by U.S.-based Fidelity Investments, 51% of people who made financial resolutions last year reported feeling better about their finances today — compared to just 38% who said the same but did not set goals.

    In the spirit of the season, we offer this month-by-month guide to help you better organize and optimize your financial affairs. Even if you’re already in good shape, you might find something on the list that could help you improve your overall financial picture — and your peace of mind.


    • Reflect back on 2014:
      • Review prior year’s investment portfolio and discuss with your advisor your strategy for the upcoming year.
      • If any significant changes or life events occurred; births or deaths, buying or selling of material assets, make sure to revise your Will and Power of Attorney(s) to reflect current wishes.
    • Review balance sheet for all family entities (i.e. trusts, corporations, family members).
      • Effectively redeploy cash balances to reduce debt or to obtain higher returns.
      • Minimize non tax-deductible debt and consolidate where appropriate.
      • Assess short term liquidity needs; set aside emergency funds covering a minimum of 3 months of living expenses.
      • Pay interest on prescribed rate loan by January 30th. If you don’t have a prescribed rate loan, consider it; as rates are at their lowest levels 1% from January 1st – March 31st.
      • Revise pre-authorized corporate tax remittance.
      • Establish priorities for charitable giving. Revise pre-authorization of payments for changes in giving.


    • Take advantage of tax sheltered compound growth.
      • RRSP contribution deadline for 2014 is March 2nd 2015; maximum contribution limit for 2014 is $24,270.
      • TFSA contribution room is $5,500 for 2015. Top up unused contribution room accumulated since 2009 and re-contribute any withdrawals from previous years.
      • Consider spousal RRSP or RRSPs/TFSAs for kids over the age of 18.
      • Review past unused contribution room in RESPs and take action. Only one year’s contribution can be carried forward in a given year to receive government grants.
    • Collect receipts and other information for tax filings due in March (trusts) and April (personal).
    • Consider paying out a taxable/capital dividend to preserve your operating company’s qualifying small business corporation status.


    • First installment due on March 15th for taxpayers remitting quarterly.
    • File trust tax and information returns by March 30th.


    • File personal tax returns for all family members by April 30th.
    • Pay any outstanding tax liabilities by April 30th (April 15th for U.S. filings).
    • Revise personal tax installments for the balance of the year.
    • Review Q1 investment portfolio results.


    • Review life and disability insurance needs and coverage.
    • Discuss income/family expectations for university/college children returning home to set expectations for the summer and September enrollment.
    • Review your notice of assessment and take appropriate action.


    • Second quarter installment due on June 15th for taxpayers remitting quarterly.
    • File personal tax return by June 15th if self-employed.
    • Pay out any prior year accrued bonus by June 30th for companies with a calendar year end.
    • Consider sprinkling the capital gains exemption on shares in your business to other family members.


    • Review Q2 investment portfolio results.
    • Consider mid-year reflection on personal, business, family and financial goals, philanthropic/stewardship objectives etc. and develop action plan for implementation in Q3 and Q4.
    • Determine most effective tuition funding strategy for upcoming school year. Also, review student living accommodation and opportunities to buy vs. rent.
    • Encourage and support your children in establishing their own savings and investment plans.


    • Third quarter installment due on September 15th for taxpayers remitting quarterly.
    • Review shareholder’s agreement.
    • Consider the merits of incorporating and/or an estate freeze.
    • Consider transferring property to other family members to minimize current and future tax liability. If you have a child turning 18, there are additional opportunities.


    • Review Q3 investment portfolio results.
    • Review medical expenses for the past 12 months (including those of dependent parents) to determine if there are tax deduction benefits.


    • Begin year-end tax planning:
      • Review status of unrealized capital gains and losses on investment portfolio and take appropriate action to minimize taxes for the current and prior years.
      • Consider a private or community foundation to shelter large capital gains.
      • Consider flow-through shares or other tax sheltering opportunities.
    • Ensure at least minimum RRIF and IPP withdrawals are made prior to year end.


    • Last installment due on December 15th for taxpayers remitting quarterly.
    • Make all charitable donations, TFSA and RESP contributions by December 31st.
    • Ensure IPP contributions are made by December 31st or fiscal year end.
    • Determine bonus/dividend policy for your company.
    • Ensure amounts paid or payable from trusts to beneficiaries are properly documented.
    • Income splitting: ensure family members are paid for work done during year.
    • Any loans from the company to shareholders should be eliminated prior to year-end; otherwise shareholders will be deemed to receive a benefit equal to the value of the loan.
    • Final review of tax loss selling opportunities. Remember carryback of losses to shelter gains from prior years.

    Milestone Birthdays

    • OAS and CPP benefits typically begin at age 65. At age 60, consider receiving CPP benefits early or alternatively, delay OAS and CPP in exchange for the higher monthly amounts.
      • Benefits do not begin automatically; you must apply to receive benefits.
    • December 31st of the year you turn 71 is the last day you can contribute to your own RRSP. Prior to year end contact your plan administrator to transition your RRSP to a RRIF account.
    • If over 40, consider setting up an Individual Pension Plan (IPP) or Retirement Compensation Arrangement (RCA).

    Are your adult children financially astute?

    Adult children of wealthy families are not prepared to handle wealth. That is one of the most common concerns among Newport Private Wealth’s hundreds of wealthy clients. Wealthy baby boomers are moving into their golden years, planning for the succession of assets and realizing their adult children don’t have the necessary skills to effectively manage wealth.

    A U.S. Trust study last year confirmed that very few high net worth individuals believe their children would be mature enough to handle wealth before the age of 25 and more than a quarter think they won’t be ready before the age of 40. (1)

    Why is this so? Financial planning, risk vs. return, asset allocation, budgeting and tax minimization aren’t concepts that are taught in our schools and universities. Discussing the family’s wealth isn’t something most families raise at the dinner table. Yet, ironically, parents want to ensure their children, as heirs, (1) don’t squander inherited wealth; and (2) don’t lose sight of family values because of it. [read more >>]

    Engaging the next generation

    At the end of November we held our launch event for NextWave, Newport Private Wealth’s initiative for young adults to help them become better equipped at managing wealth.

    We had a tremendous turnout with over 40 young adults in attendance for an evening of networking and a brief introduction to the concept of NextWave, as well as introductory topics that will lead into our future events. Feedback from attendees was enthusiastic: “These are exactly the kinds of questions I have but I don’t know who to talk to” and “I was so happy that I actually understood what you were talking about because I feel totally underprepared when it comes to financials”.

    The feedback confirmed our belief that there is a strong desire to learn. Young adults want to take more responsibility, but with little in hard financial assets early in their careers they feel like they don’t have access to qualified individuals to discuss their concerns. [read more >>]

    Catalyst funding… for families?

    ‘Catalyst funding’ is a notion commonly associated with business, health care and even the not-for-profit sector. It describes investments that are made to accelerate the development of an innovation or strategy. The theory being that with such funding, desired outcomes can be achieved faster or perhaps on a larger scale.

    At Newport Private Wealth, we’ve coined the term catalyst funding to describe various strategies  used by families to give their children a ‘leg up’ and as a means to educate them to better manage their finances. It’s a different way to think about how you provide financial support to your children – purposefully, strategically and objectives based.
    [read more >>]

    Values based wealth management

    Earlier this month, we hosted another in our series of Inside the Tent events for clients and friends. This time the topic was personal: Net worth. Self worth. What values will you pass on?

    How do we make sure our money doesn’t mess up our family?

    How much financial support should we give our kids?

    How do we create a sense of generosity and not entitlement?

    [read more >>]