Do you wish you had more contribution room in your TFSA? Consider this. If you made TFSA contributions since 2009 then you may have contributed the maximum of 5,000.00 per year, totaling approximately $20,000.00.
If you were to prearrange and prepay your eventual funeral arrangements you would be moving your money from a tax sheltered TFSA into a stable, guaranteed and tax-saving EFA – eligible funeral arrangement.
Money in an EFA is held in a secure, guaranteed investment earning 2.5% tax exempt interest. The interest earned is tax free for funeral arrangements up to $15,000.00. Additionally Ontario Funeral Homes must guarantee the cost of this funeral when it is eventually provided. Funeral Establishments in Ontario are required by law to invest the prepaid funeral funds into a GIC or purchase an Insurance Annuity. The funding of prepaid funeral arrangements is closely regulated for the protection and safety of your funds. The Ontario Board of Funeral Services audits Funeral Establishments and prepaid funeral funds annually. The funds deposited are specifically in your name and protected up to $100,000.00 by Canadian Deposit Insurance Corporation CDIC or Assuris.
During your lifetime this money is yours, as the funds may be transferred or cancelled, with your written request.
Savvy investors in Ontario are starting to realize the value of pre paying their eventual final wishes. Of the 88,868 deaths in Ontario last year, about 24% or 22,217 of these funerals were prepaid.
The guaranteed, tax- saving features of an EFA are additional benefits to the peace of mind that you will have; knowing that your loved ones will not have to make hasty decisions and pay for these expenses at an already stressing time. The money set aside in an EFA is protected from market volatility and is one corner stone of a well thought out estate plan.
When your money is moved from your TFSA into an EFA then you have more room to top up your TFSA and you can continue to have your money working hard for you.
Would you like to know how this could work for you? Please contact me! I’d love the opportunity to discuss this with you. In the meantime, I’d love your feedback. Don’t forget to leave a link back to your own blog too if you have one, via the commentluv feature here on the site.
Until next time,