The Wealthy Barber Podcast - #24 — Jamie Golombek: Tax and Estate Planning in Canada

Episode Date: August 26, 2025

Our guest this episode is Jamie Golombek—Managing Director of Tax & Estate Planning at CIBC and a widely respected voice in the Canadian financial industry. Jamie is a frequent guest on BNN, CTV and CBC’s The National, and in 2023 was awarded the prestigious CPA Fellow designation. In this episode, Dave and Jamie dive deep into the world of tax and estate planning in Canada. They cover everything from RRSPs and FHSAs to the most tax-efficient ways to donate to charity. Jamie shares practical advice on how to think about your tax return (hint: a big refund isn’t a good thing), how to avoid common estate planning mistakes and why keeping a net worth statement with your will might be one of the smartest moves you can make. Whether you’re saving for retirement, thinking about gifting an early inheritance or just want to better understand Canada’s tax system, this episode is filled with insights, tips and examples every Canadian can learn from.   Show Notes (00:00:00) Intro & Disclaimer (00:00:55) Intro to Jamie Golombek (00:03:43) What is Tax Planning and Estate Planning? (00:08:17) You Shouldn’t Want a Large Tax Refund (00:13:53) Employer Matching is a Fantastic Deal (00:17:49) Registered Accounts in Canada  (00:22:32) FHSAs are Incredible (00:24:26) RRSPs and the Advantages of Tax-Free Investing (00:27:00) Tax on RRSPs and Investments (00:31:02) Our Tax System is Unfair for Single People (00:33:25) The Most Tax-Efficient Way to Donate to Charity (00:39:25) Tax Deductions if You Work From Home (00:41:37) Changing the Principal Residence Exemption in Canada (00:45:21) Joint Powers of Attorney for Personal Care (00:48:01) Cottages and Estate Planning (00:49:32) The Importance of Keeping a Net Worth Statement with Your Will (00:52:02) Would Dave or Jamie Ever Be an Executor? (00:53:18) Corporate Executors  (00:55:42) How to Avoid Family Fights with The Estate Items (00:59:38) Early Inheritance Gifts (01:02:58) Probate Fees (01:06:01) Beware of Joint Ownership with Your Kids (01:08:20) Conclusion

Hey, it's Dave Chilton, The Wealthy Barber, and former Dragon on Dragon's Dent. Welcome to the Wealthy Barber podcast. Well, we'll be hosting some of the top minds in the world of personal finance. Yes, that's to balance me out. The podcast is about making this subject not just easy to understand, but dare I say, even fun, honest. Whether you're trying to fund your retirement, figure out how to build a down payment, save for your kids' education, manage debts, whatever. We'll be here to help you do it.

Before we jump in, a quick but important note, nothing we discuss here should be taken as investment advice. We don't know you and your personal financial situation, so we're not here to tell you we're specifically to put your investment dollars. We're here to educate, get you thinking, and we hope entertain. But please do your own research and or consult with your financial advisor before taking any action. Hey, it's Dave Chilton, the Wealthy Barber. Wealthy Barber podcast episode number 24.

thrilled with all the feedback from you listeners. Thank you very much for the comments and ratings. Today we have, I'm going to sound a little dramatic, a true superstar from the world of Canadian personal finance, and I mean that quite sincerely. Jamie Gollumbeck, he's been around for a long time and it helped a lot of people. What nicer compliment can you pay to somebody than to say that?

You know, he's given great instruction, great education over the years, help people with their taxes. He's currently managing director of tax and estate planning. CIVC, a private wealth. He's done a lot of other things in his career. He's a CPA. That's an important thing to bring across. We don't just pull these people off the street. This guy has the proper educational background. In fact, in 2023, he was named a CPA fellow of Ontario. I think I've got that right. But the key thing there is that that is the most prestigious designation you can get

in the field. It speaks to not just his ability to communicate in his knowledge level, but his sense of leadership, community, etc. He writes tax expert, call him for the National Post. You've seen him on TV a lot, BN, CBC. He does a lot of speaking where he's excellent. He and I met way back in the early 2000s giving speeches. I also used to see him at the airport all the time, walking through or getting on a flight. Very well-respected guide. I think you're really going to get a lot out of today's podcast. Now, that is immense pressure, Jamie. Do not fold. Do not let us down after did that build up. Good to see you.

Very kind, David. Thanks so much for having me. You know, when I first saw your email come across my desk a couple weeks, I thought, oh, my gosh, wow, I would love to be on that podcast. And I don't do a lot of podcasts, right? So most of the stuff we do is in-house stuff. Right. We rarely do third-party stuff other than sort of accredited news organization.

So this is an unusual thing, but I said, look, David, when he, the wealthy barber calls, we answer because I'm probably one of your biggest fans. Oh, thank you. Over 30 years, we can shout about that later. But, you know, I still bring it up all the time when, you know, when kids ask me, you know, what's the best thing to read? What's the best book I can read?

They want tax textbook. I said, don't read anything. Just read the original wealthy barber. Lots of copies around and they use bookstores for a dollar. I don't get any revenue off that one. Sorry, Dave. That's fine. Lots of copies lying around.

Easy to get one. And we can talk more about that later. But a big fan of yours as well. Thank you. We have an updated version. fully revised and updated coming out in a few months. It's been a year putting it together. It's tougher now, of course, because, you know,

when I wrote the book, there was just RSPs. Now, of course, there's TFSAs and FHSAs and all of the new complexities, plus the housing costs obviously make a lot of this challenging for different levels of income, so it's tricky. You know, when we talk about tax planning and estate planning, we'll touch on both, but you've got the big umbrella of financial planning. And for whatever reason, a lot of people equate that almost with just investing. But there's so much more to it than that.

There's cash flow management, there's estate planning, there's tax planning. Tell us in your mind, what are the definitions of tax planning and estate planning? Yeah, so I think, look, tax planning looks at the amount of money you're giving away, or at least paying each year to the government, all levels of government. And are there things that you could be doing both in the current year, but also over a long period of time to reduce the amount of tax you pay? It's that simple, in a legal way, in a way that will never get you into trouble. that you won't read about yourself in the newspaper,

and something that you'd be proud to show your tax return to the CRA. And this is when I talk about tax planning, I have no shame or I'm not nervous at all, because anything that I do, and I got about 20, 30 ideas that we could talk about, each one of them I'd be proud to show to the CRA and say, here are the 30 things I'm doing to pay less tax. Please audit me, because I have been audited.

I've written about it many times in the newspaper, and I've won every single time. In other words, as long as you follow the rules, there are many opportunities, just basic stuff that people are missing. So that's tax planning. Estate planning is the goal, again, to make sure that your state is transition to whoever you want. That could be your spouse. It could be kids. It could be charity in an efficient manner and the way that you want them to be transferred, as opposed to the government.

Because, you know, as you know, you don't have a will. the government has a set of rules called the intestacy rules which actually specify what happens to your money and people often think well if I die without a will my spouse gets all my money that is actually not what happens like for example in Ontario where I live

you know you die without a will the spouse only gets a preferential share the rest of that is divided up between spouse and the kids and you have no say whatsoever about the money going to the kids so in other words if you want any say at all over what happens to your stuff

after you die you want to have an estate plan which includes things like wills, powers of attorney, life insurance, probate planning, some tax planning, and just, you know, organization document, things like that. Trusts even, you know, even more complicated. I love your example because I think in Ontario, if I'm not mistaken, the first $350,000 goes to the spouse, and then it's divided one-third spouse, two-thirds kids. Got it.

And the vast majority of people have no clue that's the way it plays out. They think that the court's going to use judgment based on the needs of the the beneficiaries, etc. This is rigid stuff. The odds of it matching up to your wishes are literally one in 100. Just to add to that, David, I mean, one of the things I often give, and you know, you and I've crossed the country together on presentations and I have a state planning presentation I've been doing for 25 years. It's almost exactly the same in 25 years. Other than updating that 350, it used to be 200. Right. That's right. It's mostly the same. But one of the examples I always give is that once your kids are 18, at least in the province of Ontario, they're legal

adults, which means that if you die without a will and two-thirds of that rest of that money goes to the kids, they're 18 years old and they're in, you know, grade 12 in Ontario, they get the whole thing on the day they turn 18. And the surviving spouse has no say whatsoever about the money going to the kids. The kids can do whatever they want with that money. I tell stories that, you know, at seminars about, you know, horror stories that we've heard over the last 30 years about, you know, kids who receive large amounts, like 50,000, which is a lot of money. And for someone in grade 12, and they just drop out of high school. And they buy themselves a car, and they go on a road trip, and then the money's gone,

and it's a real tragedy. So, I mean, if you want any say whatsoever, even if your estate is 50,000, forget 50 million, 50,000, you want to have an estate plan, an important part of that, of course, is a will. Jamie, it's even worse for me. I was only in grade 9 when I was 18, you know, so I struggled. I struggled. No, I mean, that example is an excellent one. And again, you've got to get a will.

And they're not that expensive. I mean, if you go to a lawyer, most times a straightforward will is $400, often a lost leader for the lawyer. We now have willful and epilogue and online sets of rules and ways you can do it that's very inexpensive as low as $100 in some instances. And we'll talk more later about powers of attorney because I see that area blowing so much and the fallout is scary. Yeah.

The negative impact on families. is crazy. Let's go back to tax planning for a second, though. And I'll ask you the most obvious question, the one you've been asked most frequently in your career. What are two, three, four mistakes that you see most often from the average Canadian? Well, the easy one that I talk about more than anything is, you know, getting excited about your big tax refund. I'm not talking about getting a few hundred dollars back. I couldn't care less. If you're getting back thousands of dollars every single April or May, there's something dramatically wrong with your entire plan. I agree. And that means that you're basically

overpaying your taxes throughout the entire year. Year after year. Yeah, yeah. Every year, right? So what happens is the reason why most people get a large, I'm talking about the thousands of dollars, sometimes we've seen in the tens of thousands of dollars, is that they have deductions in most cases, sometimes credits as well, that their employer simply doesn't know about.

In other words, if you're an employee, as most people are, I mean, you could be self-employed, in which case you can reduce installments and things like that, but most people who get big refunds are employees because their employer is required to deduct statutorily under law. They are required to deduct the correct tax on your income. But they don't know about all your other deductions and credits, at least most of them, and some of them they know about, the basic amount, spousal amount, you fill that in when you join the company. But most of the other stuff, like the juicy stuff, like the RSP deductions, right?

That's right. You know, if someone's divorced, the spousal support payments could be enormous, right? deductible, right? You know, you could have significant charitable donations. We have got clients that give tens of thousands of dollars a year to charity that gives rise to a massive tax refund every year, right? So if you've got all these various deductions and credits that your employer doesn't know about it, then what you can do is you can apply using a one-page form to the CRA. You've got to do this every year. Right. Or a reduction of tax at source. So the time to do that, by the way, is November.

Because it's government. It takes them a long time, but it's a I'll talk to sell it and get it back to you. I'll tell you a quick, funny story. I actually wrote about this in the newspaper. But I do this every year because I have a variety of deductions from R's T's to, you know, donations, et cetera. And, you know, every year I get an approve. I've done this for over a decade, right, to get a pre-approval.

And I usually do it at the end of the year. Sometimes it doesn't come in time. So that's fine. They pro-rated for, you know, comes in February, whatever. So I thought I was going to get a head start, you know, a couple years ago. So I sent it in in August. Oh, wow. I sent me a letter in October saying they returned it to me, and they're saying, sorry, it's too early.

You don't process this until November. Please resend it. That's funny. The CRA, right? It's a bit of filing it somewhere. Anyway, so I sent it in November 1st, and I had it done in December, and it was ready for Jan 1st payroll. And what they're effectively doing is they're authorizing because your employer can be fined severely. Absolutely.

We're not withholding the right amount, right? So unless you get an approved letter, which is sent back to you, the taxpayer, authorizing your employee, then send a copy. What I do is I scan it in to the CIBC HR department. And they know exactly what you do. They get lots of these. And within a few days, by the next payroll, they are able to reduce my income to take into effect all my deductions and credits.

So in other words, instead of waiting until next April to get this big, juicy refund, I'm actually getting it every two weeks. as you go. Increase cash, right? And then what I can do is take that extra cash and use it to do RSPs, TFSAs, you know, are you to do? Mexico.

Everything. Travel, yeah. Absolutely. So that's two key points you brought across there. One is that you have to request this from the CRA. A lot of Canadians think when they first do this, I go to my HR department first, but you don't. You go to the CRA, you follow the forum.

That's right. You get it back. And then you have to take it into your payroll department or send it electronically. Yeah. But you made another key point earlier. that a lot of people have slipped up on. You have to do this every year.

Every single year, unfortunately. There are some situations where, like, for example, if someone has a spousal support agreement that doesn't change, you can get two years approved at once, but that's the maximum. Couldn't agree with you more that that's one of the big mistakes made. Where I see it really impact people negatively is on the RRS front, is that they don't get that in, and it makes such a big difference in their cash flow going forward.

And then, of course, the money's come back in from the government. What do they do with them? Do they put them into the RSP, et cetera? This is just such a cleaner way to go. One quick question on this. You're a member of a group RRSP at work. Does your employer know your contribution amount there for and automatically adjust as opposed to you having to send the letter it?

Absolutely. That's the biggest advantage that we tell people of the group RSP. I mean, we can also go back to your book, right? Where the automatic savings, you know, that's the first chapter, or second chapter. I mean, that's the most important message from your entire book, I think it's not your entire career. I agree.

It's a save 10%. Like I tell that all to everyone, right? It's the same 10%. But if the money comes off the top and it goes into an RSP, your employer by law can automatically and does automatically reduce your income and therefore reduce the amount of tax. So effectively, by doing a group RSP or an automatic payroll reduction, where your payroll goes directly into the RSP, your employer actually reduces your tax.

So you don't need to file the CRA. Fantastic. letter. It's just not automatically. And then again, you set it and forget it, as we often say, right? You set up that payroll every couple of weeks, automatically going into the RSP, and you're getting your refund every couple of weeks as well. So great idea. Now, you truly are one of the sharpest guys in the personal finance fields. I mean that sincerely, all these tricky ideas that we see out there. But I think you and I agree on this. The group RSP, when it has a matching provision, is the single best thing in personal finance.

I love FHSAs too, but let's go to the dollar-for-dollar matching in a group RSP. You get the force savings, the government aspect's taken care of, to your point, you don't even have to file the form, but you get 100% return in your money

the second you put it in when it's dollar-for-dollar matching. This is the best thing going in Canada. Yeah, like a lot of people forget about this. So at CIBC, we have a limited type of program like that. It's not necessarily on the RSP. It's a share purchase plan. Same argument, right? You know, fortunately, most, not everyone, but most employees do it.

If you have a share purchase plan at work, whether it's an RSP plan or just a regular matching plan, and they're giving you free money, why would you not take advantage of it? And I tell people this all the time. Just save the minimum amount that you need to get the maximum match, right? Because not everyone will do the whole $30,000, wherever the maximum RSP limit is this year, right? There are limits, and, you know, depending on how big the organization is, The limits might be quite small because it costs a lot of money to do it for, you know, 50,000 employees, right? But, you know, I tell everyone in all of my presentations, I do a lot of speaking, of course, across Canada,

a lot of that speaking is to our own employees here at CIBC. You know, we have over 45,000 employees, right? And I always tell them, if you're not taking advantage of the share purchase plan, forget about RSPs and TFSAs and all this other crap that you're going to do. You're losing free money. This is free money. It's not free. tax on it, but it's still free money that you otherwise wouldn't have. So I agree with you, David.

I mean, that is absolutely, whether it's an RSP match or a share purchase program. Again, I've done calculations for people. I show them, oh, I'm nervous about the stock. You know what? The stock can take a beating. You're getting free matching. You'd have to lose a fortune to be able to be worse off by not taking advantage of the matching, depending if it's a 50% or 100% match. So I don't buy the argument that. Well, it's risky. I'm with you. Totally. I spoke for a firm in Boston, a robotics firm 20 years ago. Yeah. And the CEO said to me, Dave, we have a 401k, the equivalent of a group RSP down there. But we're matching right now based on a three-year rolling average profit sharing.

For every dollar you put in, we match with $4.95 cents. Wow. And he says, and I still have 25% of people not doing it. What do you think I should do? And I said, fire them. Yeah. If they're so dumb, it's to turn down $4.95 for one, they're not added value in this company, get them out of here. He just laughed and he said, you know, there's probably some truth to that. I would say that's crazy.

Can you imagine putting a dollar, your 401k, or you group RSP, and now you've got $5.95? You know what? When I talk to people who don't do it, they got a much bigger problem, like honestly, right? When I ask them why they don't do it, you know what the answer is? They need every dollar of their paycheck. And that's a big problem. And that goes back to your book. Again, I was reviewing it again this morning.

I haven't looked at it in many years. But, you know, I mean, live within your means. I mean, that's probably one of your biggest philosophies, right, from that book, right? the original book, is that you got to live within your means, you got to have a budget, you know, don't buy the right size house, get the right rent, like, you know, live within your means, have a budget. And that budget needs to include retirement savings. Or if you work for a company with a matching, your budget on top of food and clothing should include this free match because you're never going to do better than free money from your company, right?

No, I absolutely agree. That being said, I'm very sympathetic to the fact that costs have gone crazy Canada in the last X number of years. And for a lot of people in middle income and down, all of these speeches aside, it's very difficult to make the math work. I'm seeing a lot of spending summaries lately where people aren't wasting money. And they're still having trouble making ends meet.

So it's very, very difficult indeed. Okay, you mentioned earlier that you've got a number of tips you give to people ideas that they can pursue, that maybe can save them some tax dollars, throw two or three of the better ones at us. Yeah, look, the other one that I think of is making sure that our clients, that are investors are taking advantage of all the different registered plans.

I think we've got about a half a dozen registered plans now. I know. Depending on your needs, right? But, like, you know, I'll just tell a quick story. Like, you know, everyone wants the sexy new product, right? Or even the sexy old product. Like, we had a client a number of months ago that wanted to book a private meeting with me, very high net worth individual, because he wanted to talk about immediate financing arrangement,

leverage life insurance strategies. I said, great, very sophisticated, very powerful product. We sat around the table, we spent 45 minutes, went through it, he loves it, he's going to put millions, a great, great idea, right? He says, Jamie, you got anything else for me? And I said, well, I got lots of ideas for you, but, you know, I assume you guys have done the basics, right? Done RSP's, done TFS, you know what, Jamie, I'll be honest with you.

I actually don't believe in RSP's. Sorry, you don't believe in them? This is a high-income individual, a high-tax bracket for his whole career. You don't believe in RSP. It's like, it's not like a religion. Like, you don't believe in it. Like, I can show you the math. It's math.

My six reports I've written on RSP's, I can guarantee you hands down, you're better off with an RSP than RSP than RSP, even if you're always in the top bracket. People don't understand, if you're in Ontario where we live, right, and you're in a top bracket, let's call it 50% to make it easy. If I have $10,000 of employment income, and I put that into my RSP, I have $10,000 invested for me for the rest of my life until I take the money out of my RIF or until I die, right? If I choose, I don't believe in RSP's, which means I'm just going to invest the money in the stock market, let's say, instead. I take the $10,000. Right away, I lose half of them. It's not five.

It's not five. So I take that five, and I invest it in the best strategic, non-registered account, right? You still have only half the money working for you. Yep. So at the end of the day, even if you're in the same tax, you're always going to be worse off with a non-registered account than an RSP. So again, there are scenarios where, you know, if your time horizon short and you're in a low bracket now, you're going to be a higher bracket in five years time when you take the money out.

Yes, we have seen outlier scenarios. But certainly for high-income clients that we talk to, you're absolutely always better with the RSP. We've written many reports on this available on our website. We have myth-busting with RSPs. So I'd say, look, maximize all your registered plans. I would say RSPs are great for retirement. RSPs are also good to help with a down payment,

although that's less important now with the other plans, the FHSAs. Let's talk about TFSAs, tax-free savings account again. No age limit on that one, right? Any age, you have to be 71 or under, like with an RSP, right? So TFSAs are really an all-purpose type of savings vehicle that can be used for anything, including a wedding reception. Like, you can use your TFSA for buy a car to fix your roof. So TFSA, great emergency fund, things like that.

For children, if you've got kids, there's any remote chance, they're going to go to post-secondary school. It doesn't have to be some fancy university, right? It could be a vocational. program, could be a trade school, anything, right? RESPs. Again, free money, right? The government's going to give you 20% Canada education savings grant on the first $2,500 a year. So you put in $200 for child, $2,500 per year per child with a 20% match. That's a $500. I mean, it's a great deal. 20% guaranteed

rate of return every year. No bank will guarantee you that, right? 20%, right? So RESP is a no-brainer. And by the way, if the kids don't go to school, you can get all your money back. Like your contributions always come back to you, right? So, you know, RESPs are a slam dunk. You know, if you've someone in the family with a disability, people forget. You have a registered disability savings plan, which allows you to set up to $200,000 aside for any individual that qualifies for a disability tax credit.

And again, if they're under the age of 50, you can get, you know, $70,000 of disability grants and $20,000 of disability bonds to deposit directly into the account. And you know what's interesting is I've done poor job on this, to be honest, educating around DSPs. I've not given it enough attention. One of the things I've done lately dealing with people is I just use a $90,000 figure. That gets their attention. Absolutely.

I mean, I should have done that years ago, to be honest, because they go, wow, that's a crazy amount of money. And, yeah, we need everybody. The government needs to do a better job on that front, all of us do. But you're right, all these accounts, and you haven't even mentioned the FHSA yet. I would argue in many ways is the best of the bunch. It's the best of them, right? The way I explain the FHSA, it's got the best of the RSP and the best of the TFSA. See, with RIS, let's go back to basics. Like with RSP, you get a tax deduction on the way in, but you've got to pay tax

on the way out. With a TFSA, you're using after-tax dollars, so you don't get a tax deduction one on the way in, but at the end of the day, it's actually free on the way out. So mathematically, the RSPs or TFSAs are actually, they're mathematically equivalent if your tax rate is the same today as the same day in retirement, right? FHSAs are better than both because with an FHSA, you've got a tax deduction for the $8,000 that you put in to save for a first home, up to $40,000 over five years, right? $8,000 times five is $40,000. But when you buy that home any time within 15 years, the entire amount comes out tax-free. Not just $8,000 a year, but all the income and growth. comes out tax-free. And you know what, Dave, there's no downside. No. You don't buy a home

within 15 years? Guess what? The entire amount can go into your RSP. You don't even have to have any RSP room. Like, it's a great deal. Anyone who doesn't own a first home, in other words, no home in the current year in the previous four calendar years should start with the FHSA. Tax connection on the way end, no tax on the way out, and no tax for 15 years. So I think we went through five or six registered plans. And before you start talking to me about leverage universal life insurance strategies, let's just make sure that you've done all the basics.

And let's go back to your book. Pay now your credit card. I couldn't agree with you more. Now, I mean, you know, you and I see this exactly the same. I mean, I always say the FHSA is the perfect love child of the RSP and the TFSA. You got it. You know, it's like they made love and came up with this

and it's the best of all worlds. And it's amazing to me, up until about a year ago, how few people knew about it. Now, we have had a big pickup on the education front and people taking advantage of it more. You alluded to something earlier that's been probably my biggest source of frustration the last few years. And that's how many in the public and even some in the industry have incorrectly turned on RRSP's. There's so much misinformation out there. Mark McGroth and PWL, he's retired recently, but he did a great job.

We're bringing this to the forefront. And you said it eloquently. This isn't a religion you believe in or don't believe it. It's math. And so you and I look at all the math and we look at all the numbers. RFPs are still phenomenal. Are they always better than the TFSA? No.

They're not always better if you can only do one, which of course many people find themselves in that spot. But they're a very solid investment return. They're a very solid container for your investments because of the tax advantages. What happened that all of a sudden? I think it's baby boomers taking out the money and having to pay tax on it. They've lost sight of the basic underlying math. They did.

And I think that's exactly. You're bang on. That's why we wrote a whole report called refuting the myths of the whole RSP strategy is because the problem is that people say, oh, when I take the money out, it's just fully income. And they've done better in their life than they ever thought they would be. So they're now in a high tax bracket. They're losing their OAS, which they're, we could talk about that for hours.

People are angry that they have so much wealth that they've lost their free OAS. And don't get me started on that one, right? But good for you if you've lost your OAS, that's what I say. But in any of them, you know, people have so much money in retirement. They're in a 49, 50%, even 53% tax practice, and they're angry because now they're 72, and they have to take out, let's say, 5% in the first year, right? And they've got an RSP that's worth a million or a little million a half or whatever. And they're taking this money out and they're losing half of them.

And they said, I would have been better off had I invested in a non-registered account because then I don't have to force to take the money out. And it's capital gains. And capital gains are only 50% taxable. You're wrong. You're just wrong. Just look at the math. We wrote a report 15 years ago when I joined CIBC, one of my first reports that I wrote called Just Do It. Nothing to do with Nike. We didn't get permission, different industry, but it was called Just Do It. It's the case for tax-free investing. R-SPs give you a tax-free rate of return on your part of the contribution. On your part of the contribution. And we prove what I've been saying at stage. We have four charts. Just Google it. Just do it. Gollembeck, C-IBC. five pages. And if you read that, you still disagree with me. Send me an email. You'll love

the wealthy barber redo because it talks about this at length and how off people have gotten and all this. I want to leave this, but I do want to touch on something that I'm very passionate about in this argument about RRSPs. There's been a misconception again out in even the industry that everything you take out of your RRSP is taxable at your highest marginal bracket. That's not the case. Oftentimes, you'll have somebody take out 50,000 in a year, 70,000 in a year. It's not all taxable at the highest marginal rate. You have to look at the average rate on that money, the average tax rate and compare it to when you first contributed, even when you're doing the versus TFSA calculation. I cannot believe how many people get that wrong, including smart people.

There's just been this whole thing. Yes, it's all coming out in the highest marginal rate. It's not. Yeah, only if you are one of those, I'd say, 2% of taxpayers that are already in the top bracket. Well, all of them come out at the top rate, right? And there's very few people, right? It's in the hundreds of thousands of people in Canada, not in the millions, right? So very few people will have all of their income at the highest marginal rate. So what you have to do, and this is why we promote, you know, using task calculators. There's a lot of free tax calculators on the, on the websites available. I mean, for example, the one I used, I used it three times this morning already working on a client file. Ernst & Young, you know, again, we have no connection.

I'm not promoting them specifically, but they have an Ernst & Young online Canadian tax calculator for 2025, 2025, for every province, it's accurate to the dollar. I've checked it against the tax software, right? And I just, when I need a rough calculation, someone's making, you know, 40,000, 80,000, 150,000, I just type it in. In one second, I will get their tax, their marginal rates, or average, rates for every province in Canada all at once. So again, I use this multiple times a day. It's free, it's easy. And then we've also produced at CIBC a tax toolkit that actually looks, it's 24

page, it's available for free on our website. And what it does, it actually shows you the marginal tax rates for every single dollar of income in every single province. So if you take Ontario, you know, 0 to 10, 10 to 20, 20 to 30, all the way up to the bracket, you know, of 250,000, and all the different types of income. all the different types of income, right? Because not all income is taxed the same. And we haven't talked about this yet.

You know, employment income and business income and interest income, it's fully taxable, whatever your, you know, marginal rate is. But if you get Canadian dividends, you get a dividend tax credit. The maximum rate you would pay in Ontario is only 39%. If you make 10 million a year, it's 39%. And capital gains, we already touched on briefly, capital gains, that goodness, are still only taxed at a 50%. It's supposed to go to two-thirds, didn't happen.

50% inclusion rate, which means that even if you're in the top bracket in a province of, you know, 53 or 54%. 27%. 27%. That's the maximum rate. So when we look at clients investment portfolios and you want to have a knowledgeable chat with them about taxes, we say, hey, wait a minute. Can we be more tax efficient in the structuring your portfolio? Are we paying, you know, high taxes on interest, income, bonds, GICs? Should we remove some of it? you know, taking into account the risk return profile, of course, as you're aware of. But can we move some of it into equities, particularly Canadian equities, where we get Canadian dividends like bank stocks, high dividend-paying stocks, right, that are very tax-efficient. And then do we look at things that earn capital gains that we don't realize every single year? We don't sell our bank stocks every year. Of course not.

We sell them in five years or ten years. When we're rebalance, then we're not only getting a capital gains return, which is only half-taxable, but we're getting that deferral, the ability. to defer that tax to a later year. As we've often said, tax deferred is tax safe, right? Because you don't pay it now, you pay it in five, ten years. You have the time value of that money

continuing to appreciate on a pre-tax basis. Yeah, no, all that's true. Now, again, that's a non-registered account. Inside the TFSA and RSP, not quite the case. No, that's interesting. You know, you brought up something earlier that doesn't get much attention in Canada. Huge advantages to being

married later in life on the tax front. I mean, it's actually a very very big difference between what an equal family income of two people, married people, relative to a single person. Do you think that's fair? What can be done about that? Should we be doing anything about that? Or is that just what it is? Yeah, well, it is what it is right now. There is a movement to change that. I just wrote about this in a column a couple of weeks ago, right? I wrote an article on progressivity in the Canadian tax system. And one of the issues that we have here in Canada is that, you know, we file individual tax rates. We don't have a family tax return.

And that's very different in the U.S., right? The U.S., most couples, not everyone, but most couples file joint tax returns. And they've got, you know, combined income brackets. And one of the recommendations based on this article I wrote in terms of tax reform is the government reopened this and see if that's something that they would consider whether allowing couples to file, you know, together a joint return. Because you're right, there really is a big difference. And of course, the bigger issue, as I'm sure you know, is that our rates are so steeply progressive that our high rate kicks in way too soon. And we have our highest rates kicking in at $250,000 or so federally, right? And, you know, if you compare that to the U.S., their top rate kicks in at multiple times higher.

And in most places in the world, it kicks in at a higher level. No, we're an outlier there for sure. So that's part of reform. And, you know, there's arguments about the family unit and do we tax as a family. family unit and therefore is that a disincentive for some, you know, part of the population not to work. And I think they've been able to refute that in many cases as well. So a lot of work to be done there. It would be part of a very comprehensive tax reform. I don't see it happening in the near term, and maybe not with this current government. But maybe it's

something to look forward to in the future. But you're right. There are certainly are significant differences. If you have $100,000 of income earned by one person or $100,000 earned by two people at 50,000 each, obviously graduate rates and the fact that each get a basic credit, although you could share that anyway, really it's the graduated rates, the amount of taxes, it's in the thousands of dollars, right, of difference.

No, I would change. You start breaking it down. It's hundreds a month relative to mortgages. I mean, it's a huge difference maker, no question. You've talked a lot in the past. In fact, I think you've done the best job of anybody out there about the merits of using shares and companies to contribute to charities. Can you

just walk us through that? I actually think that got more attention years ago than it gets now. It got lost in the shuffle. You're the guy who actually keeps it alive a little bit and brings it up. Walk us through why that makes so much sense. You know, it comes up every day. I already had a client meeting on it this morning. This morning at 11.30 this morning, Eastern Time.

We did a call. And at the end of that call, one of the issues was the strategy. Strategy is simple. It's been around for over a decade. If you're going to make a charity, you never make money, by the way, by giving to charity. And if you do, you should be worried. You should be ashamed. You should be ashamed.

All those tax shelter deals. So if you're making money by giving a charity, there's a problem, okay? But generally speaking, if you're charitably inclined, philanthropically inclined, right, you're going to give to charity anyway. The best way to give to charity is to give appreciated securities if you have them in a non-registered account. Non-registered account. Let's think shares of Apple, shares of Navidia, mutual funds, segregated funds, anything that's got up in value. Because when you give those shares directly to a registered charity, or in some cases to a foundation that could be a donor-advised fund that's run by many of the banks have them, or maybe the public foundations have that as well, city foundations, community foundations. But when you give these appreciated shares to charity, not only do you get a donation receipt for the fair market value of that donation, which, depending on the province, it's worth up to 50%, right?

But in addition to that, you pay no capital gains tax. That's the key. So imagine you bought Shopify, you know, a year ago or so, and now you've got four times your money, right? You give that to charity. The entire gain is tax-free. So you get a receipt worth 50% and you save 26% potentially depending on your tax bracket of capital gains tax.

So this is the number one way people have appreciated securities outside of an RSB or a tip. right, right? You have to have them in an unregistered account should be giving to charity. It's amazing. And I work with one of the very major, major charities here in, I don't want to get too specific, but here in the Greater Toronto area. And this is a charity that receives, you know, hundreds of millions of dollars of year of charitable donations. And I once asked them to run the stats for me. I said, give me a list of, not the names, because they wouldn't tell me, but I'm involved with the charity. I said, you know, send me a list of how many people, you know, give over 10,000 a year.

every year. Because I figured these are wealthy people. Like if you're giving $10,000 a year to the same security, you probably have some kind of wealth. You probably have a portfolio of some time. And they said, okay, we've got this many people. I said, well, what percentage of those gave a gift in kind of shares or securities in the last year? You know what that percentage was? Very low, I bet. Five. I want to guess? Nine percent. Nine percent.

And I was shocked. And I said, here's what I would do. I mean, I'm not going to tell you what to do because I'm not on the board. If you get a check for $10,000 or more, don't cash it. And they look at you like, go back to them. Go back to them and say, do you realize that instead of giving me this $10,000 check, I'll work with your financial. People think it's complicated. I do it every year.

It takes five minutes, by the way. Five minutes. That's how much it takes me to donate my shares to a registered charity. So you work with a charity that knows what they're doing, like a big major, you know, either a foundation or a donor-advised fund or, you know, whatever. And in five minutes, you transfer $10,000 where the shares over, if that's the size of your donation. And right away, you've saved 26% capital gains tax. It's so easy to do.

I've been doing every single year, year after year. What I do personally, David, is I actually use a donor advised fund. So as part of a public foundation, I use a donor advised fund. And every year, I go to my advisor. I don't manage my own money, by the way. I have no interest in managing my. I work at a bank. I don't manage my own money.

I have a trusted advisor here at CIBC who manages all my money. So I go to my advisor in December every year. I look at my income in the year. Look at my expenses. Look at my budget. And I say, what's my biggest appreciated gain that I've had in the 17 years since I joined CIVC and started investing with this guy? And he'll just send it to me.

I said, great. Donate X amount in kind to the charity. I sign a forum, scan it. It's done. Five minutes. And I said 26% capital gains tax. If you are lucky enough to have big gains and in non-registered accounts to your point earlier and you want to make charity contributions, the way to look at this is it's by far the most tax-efficient way to do it. And the savings are not insignificant.

They're huge. I mean, yeah, they're huge. And so I think you've done a wonderful job. I mean that very seriously getting this out there. I'm very passionate. I'm involved with a number of very big charities. And our job, as a volunteer, of course, it's all volunteer work. Right.

My job is to help them with financial things. Sometimes I've been the treasurer and I've helped them with budgeting and stuff like that. But my real job is on the donor side. It says, bring me your donors. Bring me your donors. And let me talk to them. And I get put it in front of a very wealthy client sometimes. And I try to explain to them and I do seminars for them and again, all for free.

I just, you know, I really want to spread the word about philanthropy. Because in the end, we all benefit, right? As a society to the extent that, you know, people are more charitable and they want to give money to charity, everyone benefits, right? If you have a more tax-efficient scenario, that means you can afford to give more, right? And that's the exact right way to look at it. If it's more tax-efficient, you can afford to give more. And again, I don't even like the word give.

I've always felt that when you get involved with charities, you're investing. And you're investing into your community, you're investing into that cause. And frankly, it sounds corny, but the returns from those investments tend to be the best out there. And so I'm with you, and it's great. You're so involved in that end of things. All right, we're going to move to one more tax item around the average Canadian. because that was more for the upper income. A lot of people working out of their home now.

They're working remotely, fewer than were, obviously, two and four and five years ago. What can they do on a tax front to limit their taxes? What are they allowed to do legally? Yeah, so you're allowed to deduct your work from home expenses. I've been doing it, you know, since COVID. I never worked a day from home, a day in my life until March the 13th, 2020, which is the day that we were all sent home.

Right. And so I'm still working from home more than not, and more than 50% of the time, although that might change in the near future, where we've got some construction going on in our downtown headquarters right now, but I do come in regularly for client meetings and podcasts and things like that. But at the end of the day, if you're working more than half the time from home and your employer approves that, you can write off a portion of your home office expenses, right?

That could be utilities, you know, a whole bunch of things. So there's a forum to do that. You need your employer approval. But ultimately, this could save you substantial money, but be careful. Because I've been on it on this myself a couple of times, right? They want to know, you know, how much space are you using? Is this a dedicated space or is it the kitchen table where you presumably also eat dinner?

And therefore you've got a right number of hours that you're really using it for work. But the best is if you've got a dedicated room, like I've got a spare bedroom that I'm using full time for my office. So any expense associated with that square. But in my case, six and a half percent. Like when I divide up the home and take that bedroom and I add up the basement, you know, six and a half percent. So, you know, if you're writing off 30% or 40%, you're going to be, you're going to be audited, right? Yeah, for sure. That's a red flag for the CLA.

You can't write off your mortgage, right? Like, so, I mean, for most people, if you're a homeowner, you know, you're talking about utilities for the most part and, you know, maybe you'll save a few thousand bucks at the end of the day. Where it really, where I've seen it really come in is for renters. Like, renters who are paying thousands of dollars a month of rent, you know, you can duck five, 10% of that, and that's material. It adds up.

No, that adds up for sure. What about your property taxes insurance? They're all allowed to be included in the 6%. Yeah, it depends. Most people cannot. I think if you go to the rules, I think you have to be a commission salesperson that get compensated on commissions

to be able to write off the property taxes. You have to check that. But the rules are very, very specific on both the property taxes and on the insurance. You know, the principal residence exemption, of course, has been in the news a tremendous amount in the last couple of years. Rumors that the governments have been looking at ways

to maybe tax the equity, build up, et cetera, as we're so desperate for funds, one of the arguments I put forth is that it would be impossible to do in a fair fashion because people haven't kept receipts for all of the renovations they've done over the years. So you've got people bought a house for X. Now it's worth three X, but some of that growth is not just market forces. It's the fact they've invested a lot of money in the house. Do you agree that we'd almost have to do it going forward and not on retroactive growth? Yeah, look, I agree with you. But there's a number of ways. I've thought about this a lot over the last decade or so. I mean, Canada is very unique. We have an unlimited.

Principle Res exemption, very different than the U.S., for example. The U.S., I think it's 250 U.S. per person, 500 U.S. per couple, something like that, right? But in Canada, it's unlimited, right? So, you know, the average person, maybe they have $400,000 or $500,000 of growth. Good for them. It's a retirement fund, right? But there are people in Toronto and Vancouver and Victoria that have $2 million or $3 million of growth, which is, of course, tax-free. So, you know, the government could look at this and say, well, wait a minute, like, you know, is this really appropriate?

So I agree with you. They can't go back retroactively and say all of a sudden, as of tomorrow, you sell your house and we're going to tax the entire gain based on the cost. Because you're right, from a practical perspective, no one keeps the cost of their house and their renovations because you don't have to, right? Unless you have two homes, one's a cottage, right? There's reasons to do that, right? But I think what they could do, and I'm not suggesting this, right?

Because it's not necessarily the right policy. But what they could do ultimately is they could say, okay, going forward, we're going to start to pro-rate. So take your value, whatever your value of your house is now, and that's another story. Do we get valuations or whatever? Maybe they use the assessed value on the land transfer, you know, on the property tax schedule,

even though that might be off. At least it's a starting point. Something. And what they say is, okay, well, if you sell it this year, there's no capital gains tax on that home. If you sell it next year, you'll have one over two years since we introduced it. So half of that gain post the valuation will be taxable.

If you sell it in two years' time, it's two out of three years. If you sell it in three years' time, it's three out of four years. Or they could go back to the original ownership. And there's all kinds of ways they could do it. They could give everyone a million-dollar exemption, right? But you're right. It's complicated. People would not be happy.

And certainly, I would agree with you. I think most canes are relying, not everyone, but most canes are relying on the tax-free nature of their principal residence to fund their retirement. Because not everyone stays in their home till the end, certainly the last few years, depending on health issues, you know, you've seen this, health care issues, and, you know, whether it's a retirement residence, a nursing home, some kind of assisted living, things like that. And mobility. I mean, you may not be able to stay in your home. If there's stairs, you know, things like that, it's a challenge. You've got to sell it.

So people are counting on that. It would be unfair, obviously, in my view, to retroactively tax that. I don't certainly wouldn't be popular politically, but ignoring the politics for a moment. I don't think it will happen. I think they will at some point curb it. Although what's interesting is, I don't know if you saw in the last month, the U.S. is actually moving the other way. There's actually a bill in the U.S. to actually introduce an unlimited principal residence

exemption, right? So we'll see. Maybe they're sort of looking at Canada. I don't know if they're looking at Canada specifically, but they're sort of looking at that philosophy and say, maybe the U.S. moves to a tax-free gain, and then maybe there's less pressure here in Canada. So the quite wealthy seem to be getting a lot of influence on. U.S. tax policy. There's no question, and I think that you may see that come into play.

Okay, so we move on to estate planning. I'm going to give you a couple opinions. You tell me whether you think I'm right. I don't like joint powers of attorney for personal care. I think in theory, they look great because you're splitting the duty. I think the problem is they can be gridlock, and they often disagree. The process slows down. Some of those decisions have to be made carefully. Your thoughts? Yeah, it's a very, very difficult discussion. I think. think that if you're going to have anyone other than, I mean, most people will put the spouse, and if there's no spouse, they'll put their kids, and most people seem to put all their kids, right? Because they don't want to, like, trust one of the kids, offend. But the best thing

you can do, where I've seen this work the best, to be honest, and again, I'm not a lawyer, right? But where I've seen this work the best is if you can have an open and honest discussion with the kids, assuming that, you know, everyone's still talking to each other, which is not always the case. Absolutely. In families that don't talk, right? They actually don't talk to one of the kids or two kids don't talk to each other, right? But if you are a fortune in a situation where everyone's still talking to each other and you can have that family meeting, you know, at the holidays or in the summer or whatever, it sounds cliche, but it actually works. If you can sort of sit around the table as mature

adults and say, listen, you know, so-and-so is, you know, because of their family situation or because of their wealth situation or because of where they live, you know, it makes sense, I think, for me to name them as my, but I want to make sure that you guys are not offended. Yeah, I like that. If everyone signs off on it, that's the way to do it. I think, I mean, you know, I mean, better to have this discussion now than later on when they're fighting over, you know, because we've seen situations where, you know, the kids really disagree on, you know, the type of care and not in terms of like dramatic stuff like in the movie is like, pull the plug or unnecessary heroic means. That's rare, right? I'm talking about like, do you live at home? Do you live in a hospital? Like, like, who makes these medical decisions? How many hours a day care do you get? Do you have personal support workers over and? night. Well, you know what? You're going to draw down the inheritance. So there's a conflict there, right? Because you've got two kids. They're counting on receiving a few hundred thousand dollars from

the estate. And all of a sudden, you know, one of the kids says, you know, I don't need the estate. Let my parents spend the money on, you know, personal support workers, which can be $120,000 a year. It's crazy. And the other kid says, nah, I don't think they need that much help. And then you get a real conflict. So it is complex situation. But I think we're going through that right now. We have my father needs somebody over. overnight. And both my sister and I are saying, go ahead and spend down the inheritance. Do not move in with us. Okay? This tradeoff is a very good one. My dad just laughs. And so it goes in there. But I'll tell you an interesting example of where that kind of conversation can be

challenging. I did a video a while ago and I talked about how cottages tend to be the single most difficult thing to handle for families, the estate plan. Oh, it's crazy. And of course, one person has the money to improve the cottage. One person doesn't want to spend just goes on it. So I said the video it may be best to sell the cottage if you're not going to do that though you at least want to have the family conversation and talk about it to avoid these fights two weeks later one of my friends gets in touch to me and says dave you idiot i had that bomby conversation and now they're fighting anyway but i'm still alive to see it i would have preferred if they fought after i was dead i missed the whole thing and i couldn't argue it i mean it was a fairly good point so cottages are a

hot spot yeah i mean the estate planning front yeah where i you know we have the cottage conversation, I've written articles on, you know, your, the piece that I wrote on this is called What's Up, Doc, D-O-C-K. You can Google that, What's Up, Doc, Golumbeck, C-I-VC. And I wrote all about the tax issues, the state planning issues with the cottage. But, you know, what I often suggest, and this is non-financial, is ask the kids if they actually want it. Right. Because, you know, if the kid lives in Vancouver and your cottage is in Muscoca, they might want it sentimentally, but they're never going to use it. Like maybe. Right. Use it for a few weeks. Right. But at the end of the day, ask the kids, do you actually want it?

And if you don't want it, great, you won't get it. And then we'll equalize the estate through, you know, a principal residence or through other assets or maybe with a life insurance policy, which is very, very powerful. Yeah, no, I agree with all of that. I talked to way back when in The Wealthy Barber about the importance of putting a net worth statement with a lot of details with your will to help the executor. I think again, to give you credit, you've been one of the best people out there for pushing that and making this job, very difficult to ask as easy as possible on the executor. Don't you think it's more important now than ever? I mean, states have gotten so much more complicated.

People have multiple accounts, private business interests, foreign real estate, but also passwords. A lot of times now, people don't even know how to get into the accounts because they don't have all the information. So is that something you push pretty aggressively at the client base there? It is. So when I do my 10 steps to estate planning presentation, that I've been doing for 25 years, it's almost exactly the same, right? That I've been doing for 25 years. You know, one of those steps is, you know, a snapshot of your financial position

where you list all your assets. And again, I don't want people listing every GIC in stock and on they have. That's not what I'm talking about. I'm talking about I have an account at CIBC. This is the account number, and this is the fair market value as of whatever particular date. Just sort of very high level, right? I don't need to know the value of your clothing.

You're never going to get any money from your clothing. You're just not going to be able to sell it. Do you mean, are you saying that to me personally? Are you saying that to people in general? Maybe that shirt you can get some. Yeah, this shirt's pretty sharp. That's a nice shirt. But I'm saying, generally speaking, like, don't bother with your personal effects, right?

Maybe some salvage company you'll get five cents on the dollar. That's not what I'm talking about. I'm talking about the major financial assets, liabilities. You know, I sort of joke sometimes that, you know, even those liabilities that, you know, sort of are off book. So maybe a brother loaned you, you know, $50,000 years ago when you were in trouble, and you might think, oh, he's going to be so upset when I die that he'll simply forgive the loan. Of course, what happens is they come knocking

at the executive's door the day after you die and they say, hey, before you give the money to the kids, I want my $50,000 back. And all of a sudden, this liability emerges out of the woodwork, right? So I tell people, list all your assets, list your liabilities, including these sort of off-the-book liabilities, and look at your net worth and have that statement, put it in a safe place,

which, by the way, is not your safety deposit box. because no one will find it there because they don't even know you have a safety deposit box. Absolutely. Because on your list, you're going to put, I have a safety deposit box

and the location of it, right? Put a copy at home in a safe place, make a photocopy, and then tell your spouse or partner, your adult children, your executor, where it is.

Like I know my parents told me years ago, they've got a certain location in their condo. It's in this location. I know exactly where it is. Now, you are such a trustworthy person, such an intelligent person. You must be asked to be an executive.

quite frequently. What are your thoughts on taking on that very big burden? Never. Never. Never. You sound like Dave Chilb. I did a video. I don't help it. No, I'll never do it. You know what? I would do it. Maybe. I think my parents are each other's executor. I think I'm a backup. That's it. Yeah. I get it. No, I get it. It's so much work and you and I are most. It's a liability. You have a liability. You have a liability. You have a liability. You can be sued, but also the family friction that comes with it. I mean, it's just a thankless job. Now, if it's a very straightforward estate, Some people are going to argue with me and say it's not that bad. Even then, I'm cautious.

But on these new complex estates with blended families, I mentioned foreign real estate, hold coes, all these things we're seeing more and more frequently. I want nothing to do with it. I was speaking with someone recently. It was a lawyer who's acting as an executive of a couple of states. The stuff that she has to deal with, you wouldn't even believe it.

This is a high-priced lawyer in downtown Toronto. And she's spending hours on the phone, making phone calls to get insurance for the gas, wood, stove, locate, like, this is the stuff the executor has to do is. Someone dies, and they've got to make sure that the property is secure. Like, it is crazy. Absolutely with you. By the way, to get to all our listeners, you've got to have a contingent executor over and over again we're seeing now that somebody names an executor doesn't put a contingent. The executor moves on with their like dies, whatever refuses to do it, and all of a sudden you're in trouble again. So,

do you always advocate for that too? And what do you think of corporate executors? Yeah, look, I think I absolutely want to have a replacement or alter an executor, right? And I think that there is a role. Look, I'm unbiased. I work at CIBC, we have a CIVC trust company. It has a great job.

It's been around for over 100 years. Again, you know, we don't take small estates, right? Like it's not worth it. It's not cost effective for us or for you, right? But for a more complex estate, you know, a couple million dollars or more, you know, if you don't have family members in the country or you don't have family members that get along,

or you have a more complex estate with either a business or a bunch of real estate or some rental properties, sometimes a corporate executor is the easiest way to go. They have experience. They don't get emotional. They've done this a thousand times. They can liquidate your experts in property management. They know how to get insurance.

They know how to do all this stuff in terms of selling the assets, the estate. They're real experts. And look, they don't even have to be the sole executor. Sometime, a lot of the trust companies will act as agent for the executor. That's right. We've got a family member that's actually making the, you know, the sentiment. You get this picture and you get this silverware and things like that. But you have the trust company that's actually doing the physical administration.

So they're handling, paying the bills and opening the estate accounts and managing the money before it's distributed. And that's a lot cheaper, right? So agent for executor, people should look at it. And if you're unsure, just speak to your local banker and say, look, can I do a free consultation with your estate? people. Well, I want to talk to your trust company. I want to quote, you know, here's my situation. What do you think? What's it going to cost? And in many cases, I think that having a corporate executor, certainly for, you know, more wealthier clients that just don't have, you know, someone that really has the time. Maybe they've got the kids, the kids have got

young grandkids. Like, you know, they just don't have the time or expertise or they really can't be bothered. You know, a corporate executor can be a great option. Yeah, I think that's a good option for a lot of people, but I'm going to put you out there as the number one option. I think people should contact you personally to be their executive. Do not call. Do not call. You mentioned one of my favorite subjects in estate planning when the executor says, you know, you're going to take this and you're going to take that. Over my career, I've seen more arguments result from how those types of personal items that aren't necessarily very valuable, but have great sentimental value, how they are distributed. I mean, I've gone public many times now saying you've got to do

that ahead of time almost and do it through a lottery system or a game of buying some way. I've seen some very smart. I've worked with a bunch of estate lawyers. They're very good at this and they've got a lot of experience, right? That's why it's a good idea to get advice in advance. And I've seen some very interesting scenarios where the assert lawyer will go to the home with the beneficiaries and ideally before death, but it doesn't have to be when the person dies and everyone gets colored stickers. Have you seen this, David? That's right. Absolutely. That's what we did. We did the same thing. No, you read blue and they take turns. They flip a coin or a three-sided coin or whoever goes first, right?

And then they go in order. And they say, you put your sticker on anything you want, and then you get choice and you get choice. And they just keep going until everyone's chosen everything they want. And the rest of it, they donate to charity. The best one I saw because it was so much fun was everybody got 50 bidding points. And then the four or five people got to bid on the items. And you could spend 45 of your 50 on one item if you really liked it.

I thought that was really cool too. But kidding aside about these, you need to do one of these things. Because I'm being sincere when I say, it may be the biggest cause of family friction are those little things that, again, have sentimental value to the kids, the grandkids, and everybody else. Talking this through ahead of time makes sense.

Yeah, some people are just also not rational. Again, I hear stories all the time from lawyers, and we deal with this, and they play playing stuff all the time. A recent story I recently heard was that someone had passed away, and one of the relatives was very, very fond of these, you know, concrete planters that were up at the cottage.

And these weigh, like hundreds of pounds, and, you know, the advice was, we'll just give them away. They absolutely objected, and they insisted that it'd be shipped to them in the U.S. And it was going to cost thousands and thousands of dollars to ship. I said, just go to Home Depot or no matter where. It'd be way cheap, but it's emotional.

It is. It is. It is. And they could not convince the client who has actually hired a mover to come up and bring these concrete planters. It's emotional. it is my sister and I are like that we're very emotional but we're fighting over who has to take my dad's cardigan sweater collection we each want the other person to grab it for sure we don't want to have anything to do with it when he eventually what there has to be there has to be what they call a sinking fund which you often see with a cottage where absolutely take the sweaters you also get a thousand dollars you could pay for a thousand dollars you could pay for a cold storage unit I love that idea right it's just like with a cottage where someone takes the cottage but they also leave them a pool of cash to be able to pay for the annual maintenance which is actually a a great strategy. It is a good strategy. My dad, by the way, thinks this all of this is silly because he believes he's going to outlive us and everybody else. His plan is to never die. In fact, my poor sister is his power of attorney for personal care. And he said, I only have one instruction for you. Never let me die. She has immense pressure on her. I'm just doing the finance stuff. That's actually quite. There's a lot of talk about this longevity stuff. I just read an article just over the weekend. And this week's New Yorker magazine where there's this whole movement.

in the U.S. of these people that are, you know, actually doing this research and doing all this stuff with biometrics about, you know, could you actually mathematically live forever? And maybe not forever, but for 700 years. And it's actually fascinating. And mostly it's billionaires that, you know, can afford to do this kind of stuff. But, you know, it's just a fascinating discussion among the science and the pseudoscience that's out there. But if you want a good read, take a look at I'll check it out. I love that kind of stuff. I don't think the actuary is a factor that into our analysis, so we could be in trouble. Okay, I'm going to let you go soon, but just two more things.

Seeing a tremendous amount of gifting now, where you've got parents and grandparents helping kids out to buy their homes with this expensive marketplace, but it's not just that. It's people realizing that I've got enough, and I'd rather see the kids and grandkids enjoy the money now. They can do more things so that they can max the FHSAs, they can pay down the non-deductible debt, or they can even do something frivolous, but I get to see them do that, and I get to see them enjoy it. Are you seeing a lot more of that in your practice? Tons of it. In fact, we're big fans of this. I wrote a report about maybe seven or eight

years ago that we just updated recently. And you know what's called? It's called give a little bit, which of course is reference to the super tramp song, right? One of my favorite bands from the 70s. But, you know, give a little bit. I mean, if you can afford to do so, and this is where it's important to work with a financial advisor, have a financial plan, a retirement plan to make sure that you don't need the money. Because, you know, as we often say, the biggest problem with a gift that it's very hard to get it back later on. You can't, yeah. You can get it back, right?

So if you can afford to give, I would agree with you. So whether it's helping the kids, you know, finance a home, help them with a wedding reception, help them pay off debt, student debt, you know, the CRA debt, some case, or is right? For sure. These are all great uses of money. You get to see them enjoy the money. Look, I say to clients, if you're going to give them the money anyway at the end of the day, and you know this is never money, money you're never going to spend in your lifetime, why not give it to them in advance. A, you can see them enjoy the money, right? But B, maybe they don't need a mortgage. And now of a sudden, instead of paying interest to a third party like a bank,

no offense, we want your interest, but at the end of the day, no, why not just keep it in the family? So you're saving an external cost, and there's more ultimate net worth for the entire family. So look, I'm a big fan of gifting. There are ways to protect a gift if you're worried about a marriage down by getting a mortgage. There's ways to go to a lawyer, get the right advice, you know, marriage prenuptial agreements. There's all kinds of ways to do it if the gift is significant. But again, there's also different philosophies on this.

You know, when I talk to clients about you're going to make a major gift, you're going to give them, you know, $100,000, $500,000 to buy a home. And some clients are worried. What if they get divorced? I lose half the money. Yes.

Other friends like, you know what? They get divorced? Well, they're still the parent of my grandkids. That's what I say. The money, you know, and so they don't care. So you've got to have these conversations, but there are ways to protect the money, but I'm a big fan of gifting.

And, you know, what people don't realize, unlike the U.S., right? We don't have a gift tax. That's right. You can give us much money to your kids whenever you want. It's not even reported on a tax return. So, other words, you give your kid a million dollars cash tomorrow. That's it.

They don't report it. It's like a tax-free gift in Canada. Now, if you give them a million dollars of Apple shares. Sure. They've got the deemed disposition. Disposition capital gains tax. But if you're giving cash, just like money in the bank or you've liquidated something already, you've got cash, that is a non-reportable transaction.

and you just give it directly to the kids. There's no tax on it. They can take that money and do whatever they want with it. You know what? I really wish you hadn't brought that up because my kids listen to this podcast. Uh-oh.

And I have told them for decades, there's a huge gift tax in Canada. And so they're now going to discover, I'm lying. We do have the true reversal again. I hate to pick up my dad, but my dad will say to me, you've been lucky to do well.

What about gifting me some money now and helping me? The guy's like 115 years old, but, you know, whatever. Okay, last thing is I put a video out recently about probate. And my argument was, A, it's amazing how few Canadians know what it is.

Like when you walk on the street and ask people, they don't know what probate is. But beyond that, I think the governments, the provincial governments would be doing themselves a favor to have low to no probate fees

or a very low flat fee. They'd probably bring more money in because they wouldn't have all these people working so hard to avoid probate. Yeah, no, I agree with you. Look, I mean, look, probate is a valuable process and it's very important

to protect the executor. And at the end of the day, you know, the problem is that the fee that many governments, not all, some provinces have a flat. Some are great fair. They're nominal. They're $400 or whatever, right? But provinces like Ontario, Nova Scotia, BC, where you're looking at, you know, one and a half percent on average probate, right? For what? For nothing?

For validating a will. In other words, it's a tax. And in fact, they've renamed it in Ontario. It's not even called probate, right? It's called state administration tax. The acronym, we love it, eat. Right? Eat your money.

So estate administration tax is the name of probate in Ontario. They take one and a half percent of the value. They do the same amount of work, whether you've got a million dollars of cash or you've got $50,000 of cash. Of course, the first $50,000 is lower, but anything above that, one and a half percent. So there's all kinds of schemes. Some are better than others about trying to avoid probate, using joint accounts, naming beneficiaries on RSPs and RIFs and TFSAs and life insurance to much more

sophisticated strategies like a multiple will strategy, but doesn't work in every province. It works in Ontario. We have one will for your assets and one will for your non-provatable, like your private company shares. And then you get into like bear trust corporations and it gets kind of complicated. But look, I agree with you. I think at the end of the day, this is a revenue raise from the government. It would be great if people actually embraced probate and people wanted probate because it's a way of protecting the executor. Look, the example I give in seminars, people get so angry with probate.

I said, you should be happy about probate. You should be angry about the fee associated with it. because at the end of the day, said the exact same thing. Someone comes into us and they shows us the will. And they said, they've got two kids, Kid A and Kid B, I am Kid A. Here is my passport.

Here is my ID. Here is the signed seal will of my dad. Comes into CIBC. We say, great. We verify you. We've known you for 30 years. And we pay out to Kid A. A week later, Kid B walks in with a will from the dad and said,

look, I am the sole beneficiary of Dad's estate. And we say, that's impossible, because we, We have a copy of it. We kept a photocopy. We showed him the will. He goes, oh, what does the date on that will? Because my dad actually changed the will a month later because he got into a fight with Kid A. And actually, I am the sole benefit of kid B. So CIPC has now paid the wrong person. Right.

We are liable. Yeah. Because we relied on the will without getting a probate will copy from the court. So it protects the executor, protects someone paying out under the will. Probate is a good thing. The fee is a bad thing. And that's why there are all kinds of planning out there. But I would just end on this probate discussion is that I am not a big fan of joint ownership for anything other than a spouse or partner.

Okay. So I am so glad you brought that up because I think that people are screwing this up big time. Yeah, they are. So you've got one spouse is deceased and the other one obviously still alive has a big pent-up capital gain on something. They want to avoid probate. So they just stick somebody's name on there, one of the kids. but they still have to pay tax somehow, some way on that. And they don't recognize that.

They think it's just going right over to that person, but the tax liability is still there. It's still there. I mean, most cases, they'll argue that at the time they added it was for estate planning purposes, so that it's not a deemed disposition, although Ray might argue otherwise. But on death, they haven't really changed the beneficial ownership,

which means on death, there's a disposition of the account. Absolutely. You still have to pay the tax on that. Where I really see big problems, and I'm sure you've seen this as well, is where you name, you know, multiple kids on there or you don't name all the kids on there and, you know, what was the intention?

Was it joint? Was it meant to really, you know, go to all the kids equally, you know, or was it really just done for convenience purposes? It is a mess. I've written many articles on the dangers of joint account. The joint account has actually gone to the Supreme Court of Canada on at least a couple of occasions because people could not agree

what was mom or dad's intention when they made an account joint. So again, my message would, be you want to do a joint account with your spouse or with your partner, no problem, tax free transfer, tax not free on death, like no problem, okay? But if you're starting to do a joint account with your kids, be very careful. There are legal issues and there are control issues. I mean, the final example. So agree. We had someone in Vancouver, the British property is a client maybe 15 years ago. It was a client that was in their 90s and she added

her son as the joint owner of her real estate about a year later, she wasn't feeling great, she wanted to sell her home. The son said, no, no, no, I don't think it's time. The market isn't right. But because the son was joint on the home, the real estate agent refused to take the listing because they didn't get the permission of the son, who was a joint legal owner on the home, says the mother couldn't sell her own home because the son was named as joint owner on the home and refused to sell because he didn't agree with the market timing. Imagine that, right? I'm going to give you another compliment as we wrap up here. I think we're unique and why you're so strong at this is you have the educational background, obviously, you're very

bright, you've studied all this, but you have a lot of frontline experience. And you can see in your answers that you're weaving in psychology, human nature, what really happens on those front lines when you give a lot of this advice. I think occasionally we have a lot of financial experts and they are very knowledgeable, but they haven't sat across the dining room. table from the people. They haven't sat across from all the advisors and seen the real life scenarios because they don't tend to play out the way you think they're going to. And I think that's one of the reasons you and I tend to agree on everything is because we've both seen these things play out and all the things that can go wrong. And when it comes to estate planning,

sadly, if it can go wrong, it usually does. Yeah. Again, I'm in a fortunate position. I've been in CWC for 17 years. I've been in this industry for over 30 years. And I've seen almost everything. And the nice thing is I sit here as sort of at head office. And I really run the Tax and State Group for all of Canada on the client's side. And I see the most interesting, complicated cases because they eventually, you know, ultimately will funnel up to me. Not for practical issues on how to deal with an estate. We have a whole department that deals with that. But on the planning side, on the advice side, because I hear from the advisors. We have thousands of advisors who have millions of clients.

And I hear all the good stuff, right? So I hear all the juicy stories. I'm out there speaking 80 to 100 times a year. So I actually meet with real people and actually meet with real clients. every week I have two or three actual meetings. No, you can see it. Again, you can see it come through with the stories. And we see all kinds of stuff. And the good thing is that there's common themes. And we try to learn from those themes and provide feedback.

And some families give us ideas. We share with other families. And that's why I really think the important message is advice. People need advice. And I think there's a lot of great advice out there. If you don't have a great advisor, you should get one. Because there are some great advisors out there, whether it's lawyers, whether it's accountants,

whether it's a financial planner. but people don't have to do this on their own, right? It could be very intimidating. You didn't say whether it's a barber. You were supposed to throw that in, too. That's true, absolutely. Listen, I really enjoyed this. I mean, great seeing you again.

Your knowledge blows me away. You're very, very good at this. And you're a great communicator. Yeah, and yourself as well. Mutual admiration, for sure. And, again, I was thrilled when I got the invitation. And again, until recently, I taught an MBA class in personal finance at the Shulik School of Business at York University in Toronto.

For 17 years, got an MBA course 13 weeks a year for 17 years. I just stopped a few years ago during COVID with the, you know, the distant learning and I didn't want to go back. Anyway, but I always said at the beginning of my class, when I do my chapter on budgeting and goal setting, I show them a copy. I actually tried to find it this morning.

It's somewhere in my house, the original wealthy barber from the original tour when we met in a Halifax Casino Hotel by the water that keeps changing names. It was a shirt that's right. You were speaking and I was speaking and I think it was a co-sponsored event with my previous firm. And I just tell people, look, just follow David's advice, the wealthy barber, save 10%. If you can save 10% that you're going to be just fine. Now, they ask me, is it gross or not gross? Gross. Save 10% of your gross income. You're going to be

fine. Now, you said all that very well and thank you. And it's amazing you and I don't look any differently than we did all those years ago. You look exactly the same. I wish. I wish. Anyway, good seeing you again and come back anytime. Absolutely. Thank you. Thanks again for having me.