CLIENT SITUATION

The person: Annie, 69

The problem: Are her investments structured in the most tax-efficient way possible? Can she afford to give money to her children now without running short of funds for health care if she eventually needs it? Can she afford to fund charitable endeavours?

The plan: Continue with current income structure. Give now to her children and consider gifting to charity on an annual basis, plus designating gifts of securities in kind in her will. Consider tax-exempt life insurance to shelter some of the tax on her investments and provide a tax-free death benefit to pay the substantial tax owing on her registered investments.

The payoff: The pleasure of giving now and seeing her gifts at work. Receiving tax savings from charitable gift receipts and from reducing the size of her estate.

Monthly net income: $11,000.

Assets: Bank account $10,500; non-registered portfolio $1,499,000; TFSA $78,000; RRSP/LIF $1,755,000; residence $1,000,000. Total: $4.3-million.

Monthly outlays: Condo fees $623; property tax $417; home insurance $155; heat, electricity $113; maintenance $200; garden $50; transportation $266; groceries $700; clothing $100; gifts $150; charity $83; vacation, travel, other $980; dining, entertainment $200; personal care $100; subscriptions $50; pet $200; health care $90; communications $155; TFSA $500. Total: $5,260. Surplus $5,740.

Liabilities: None.