October 2020


Leverage October 2020
In this edition, we focus on the impact of divorce on retirement funds, taking a thorough look at the implications of the Divorce Act on parties married out of community of property without accrual. We highlight the impact divorce has on one’s Will and the implications of dying without one, before we provide insight into customary marriages and the impact they have on financial planning. An ASAP summarises the impact of divorce on retirement funds and gives practical information to consider when drafting the divorce order. Download


Divorce and retirement funds
The Divorce Act was amended in 1989 to make provision for the division of “pension interest” between parties of a divorce (excluding those married out of community of property without the accrual). At that time, the non-member spouse had to wait until the pension benefit accrued to the member before he/she could get their share (no growth accrued on that amount). We take a closer look at amendments on this law as well as relevant legislation including the ‘clean break’ clause, deferred pensions, pension interest, government employee pension fund, tax implications, divorce order wording and more. Download

Business Assurance - One Pagers

Asset replacement
Most businesses use the depreciation deduction as a book entry in order to reduce their taxable income and therefore the amount of tax to be paid each year is reduced as well. While this makes accounting sense, what happens to the asset at the end of its useful life? A solution is for the business to take out an investment policy (or an alternative investment vehicle) to accumulate capital to assist with the repurchasing of assets.Download
Buy and Sell agreement
Business owners have the need to ensure that there will be continuation of the business upon the death or disability of a co-owner. They further want security in knowing that the disposal of their business interests will be dealt with in an orderly manner. To avert risk, the co-owners of the business enter into a buy-and-sell agreement.Download
Key person protection
Effective and well trained staff, especially those with specialist skills or knowledge, is vital to a business’s success. If such an employee were to die or become disabled tomorrow, what would be the cost to that business? Key person protection is an arrangement where an employer insures the life of a key employee for the purpose of compensating the business for the loss of income it would suffer in the event of that employee’s death or disability.Download
Preferred Compensation
A high staff turnover is a costly business risk as it results in loss of productivity, intellectual property, employment costs and training costs. Therefore it is important for a business to retain and motivate its employees. An incentive scheme that rewards key employees with tax-free bonuses every five years and eliminates the cost of staff turnover and reduced productivity, can be a very effective solution.Download
Protect against business interruptions
The disability of the business owner will generally have a detrimental impact on the business and will impact not only the short term income flows but also the long-term sustainability of the business. If the business cannot maintain its business overheads it will surely face losing clients, employees and potential insolvency. These policies can help sustain the company for a short period of time while assessing the overall impact and planning for the future of the company. Download