May 2022 Radio Show

Announcer: [00:00:00] CIBC Wood Gundy is a division of CIBC World Markets Inc, a subsidiary of CIBC and a member of the Canadian Investor Protection Fund, an investment industry regulatory organization of Canada. Wade Kozak is an Investment Adviser and Portfolio Manager with CIBC Wood Gundy in Calgary. The views of Wade Kozak do not necessarily reflect those of CIBC World Markets Inc. If you are currently a CIBC, Wood Gundy client please contact your investment advisor.

Randy Sharman: [00:00:25] Welcome to another edition of Talk to the Experts on 770 CHQR. I'm your host Randy Sharman. Today joining me in studio is Wade Kozak and Harrison Kozak from the Kozak Financial Group, CIBC Wood Gundy. www.KozakFinancialGroup.ca is their website and their phone number. If you have questions you want to call them, set up a consultation. You can do that for 403-260-0568. Hello, gentlemen.

Harrison Kozak: [00:00:50] Hey, Randy. How are you doing?

Randy Sharman: [00:00:51] I'm good, thanks.

Wade Kozak: [00:00:52] Good to be back.

Randy Sharman: [00:00:54] We always like to start talking about the markets. I don't follow them like you do, but I do get it like a it's a daily email. It's called the Morning Brew or whatever. And they always have them.

Wade Kozak: [00:01:06] The little talker in the corner.

Randy Sharman: [00:01:07] Corner. Yeah. The top five markets or whatever. And it seems to me a lot of stuff in the red. The last couple of weeks I got the feeling the markets didn't do very well. But you are the experts here.

Wade Kozak: [00:01:21] Well year to date if you're if you're just kind of following it from by that measure or just watching the talking heads on TV, it does feel pretty terrible this year. So from January one, right to Friday's close, markets in North America have been quite weak. The Nasdaq composite down about 22 and a half percent. The S&P 500 down about 13% year to date. The Dow down about 9%. Here in Canada. We fared better with the energy contingent in in the TSX Composite only down right now, around two and a half percent year to date. However, that doesn't really tell the whole story. There is basically been one segment of the market that has been very weak and the rest of the market has done okay. And that very weak segment has been the large cap growth stocks in North America. So, you know, in Canada, the likes of Shopify and Lightspeed are down significantly from their all-time highs and are down quite a bit this year. And in the US, names like Netflix, Amazon, Google, Facebook, Snapchat, all of all of those Mega-cap growth stocks that did very well during the pandemic have given up a lot of those gains.

Wade Kozak: [00:02:40] And because those names make up such a large portion of the overall indices, it's dragging the indices down. What's actually done reasonably well year to date have been the blue-chip dividend paying value stocks. One of the reasons I think they've in general done well is because during periods of inflation in the past, what has protected you from that? Inflation has been blue chip dividend paying, value-oriented stocks. And so that side of the stock market is actually holding up quite fine. So, the equity portfolio that we run at the Kozak Financial Group for our clients, that core portfolio of dividend paying stocks is actually up a little bit year to date, January one to right now because we have some exposure to those large cap growth stocks that that have been weak. But we don't have a whole lot of exposure because they don't pay dividends. So the market has actually had two sides to it and it almost feels a little bit like the the sell off in technology stocks back in 2000 when that one sector was doing terribly. But the rest of the stock market was doing just fine. Thank you very much.

Randy Sharman: [00:03:52] Mm hmm. And this kind of just goes back to your whole philosophy of how to do things. Anybody that's listened to talk to the experts with you kind of knows that's you, you don't get caught up in the highs and lows. That's the whole idea of how you do things. So you can weather the storms or for lack of a better term and those types of things, right?

Wade Kozak: [00:04:11] That's correct. Like the stocks that we want to hold for our clients, we want them to pay a regular cash flow in the form of that dividend so that even during during bad years in the stock market, when those stocks are down, too, that cash flow is still coming in and can fund the retirement withdrawal that a client wants to make. And so that that helps clients feel a lot calmer and makes them less likely to panic and sell out at the bottom. And in my experience, that's a very good way of building a retirement income portfolio. And times like this are an excellent example. If you had retired in December of this past year, just in time to go and see the markets go and take this bit of a swoon, it would probably concern you a great deal. If you were counting on future growth from those names to go and fund your retirement income. But if you're counting on dividends from a dividend paying stock portfolio, whether the stocks are up or down doesn't necessarily affect the dividend that you're getting paid. That cash flow continues to come in.

Harrison Kozak: [00:05:16] Not to mention striking a balance and adding in a little bit of a fixed income component into your portfolio. It doesn't matter whether the stocks go up, down or sideways. The only thing that's really going to influence interest bearing bonds is changes to the interest rates. Of course, we've seen interest rates climb over the beginning of this year, which has pushed down existing bond prices. But that just makes it all the better to purchase new bonds as you have maturities roll into the account and new cash to go and get reinvested in a new bond.

Randy Sharman: [00:05:48] Mm hmm. So let's talk about interest rates, because as always in the news, it seems to be lately. How does when you hear a story of the Bank of Canada is going to raise interest rates to fight inflation, how does that affect portfolios?

Wade Kozak: [00:06:02] That will affect the current market value of the existing fixed income or bonds that a client has. So, you know, our constant listeners will know that the way we invest in bonds for our clients. So, for that guaranteed side of the account, we want to build a ladder. We want money coming due next year. We want money coming due the year after. We want money coming due in three years all the way out to ten years. Typically, we want to build that ten-year bond ladder and then as bonds come due, we simply roll them over. Now an end. Interest rates have moved up during the months of April and May, probably about as much as I've ever seen them move up in that short of a period of time like this has been a very, very steep rise in interest rates. You can get on on bonds at every point in that curve. So, for instance, in January, we were hard pressed to go and buy a ten-year investment grade corporate bond, paying 3%. On Friday, I actually bought a nine-year investment grade corporate bond paying about five and a half percent, which is a huge move in a short period of time. And what those interest rates are that will affect the current market value of the existing bonds, however, that you have in your portfolio now, a bond coming due one year from now is very short. And it's, you know, it has a guaranteed maturity date and a guaranteed maturity value that, you know, you're going to get on that date one year from now. It's not going to move very much. And so that bond hasn't moved very much during during this period of rising interest rates.

Wade Kozak: [00:07:40] The ten year bond may have moved quite a bit, right, if it was only paying you 3% back in January. And a buyer today is demanding 4 1/2% or 5% for that same bond. The current market value of that bond will have diminished somewhat. It still has a guaranteed maturity date. It still has a guaranteed maturity value. So, it only can move so much. But it will have moved, I'd say the like a one, three, ten year ladder, that overall bond portfolio probably has a dropped in value in the last couple of months by I'd say, between 4 1/2% and 5 1/2%. So if you look at that whole ladder, it has diminished in value between 4 1/2% and 5 1/2%, but it is still paying its interest. That bond is still going to come due. We're still going to be able to roll it over at current interest rates and get a better yield than ever before. And I want to point out that if that's how much a bond portfolio can move a one through ten year ladder during a period where this is about as much as we've ever seen interest rates rise in this shorter period of time, I'm not saying we should be, you know, casual and unconcerned about that, but in the grand scheme of things, that's a much smaller move than you would see during a period of volatility in the stock market. You know, we just looked at the Nasdaq down 22% year to date. And so even during periods like this, those bonds tend to be more stable and hold their value better than an equity portfolio.

Randy Sharman: [00:09:10] Just getting underway, chatting with Wade Kozak and Harrison Kozak from the Kozak Financial Group, CIBC Wood Gundy, KozakFinancialGroup.ca, is their website. If you have questions, want to set up a consultation 403-260-0568. So one of our topics this week is going to be intergenerational wealth transfers. We'll chat about that and other things financial with the Kozak Financial Group when Talk to the experts continues on 770 CHQR, Wade Kozak from the Kozak Financial Group and Harrison Kozak from the Kozak Financial Group, CIBC Wood Gundy, KozakFinancialGroup.ca. is their website. 403-260-0568. Gentlemen, when I when I call that number and you pick it up and you say, how can I help you? What are some of the main concerns that people have in general when they talk to you for the first time or even, I don't know, for the 10th time?

Wade Kozak: [00:10:08] Well, for the first time, I think often they're quite surprised to get a human being on on the telephone and not and not a voicemail message. But typically, people, especially after hearing us for years talking about the things we talk about here, they have a general sense of already of kind of what we're about and the kind of philosophy we have. And they just want to know more about how our particular philosophy will affect their investment portfolio and their particular circumstances. So usually they're prepared to sort of share a little bit as far as what their personal circumstances are, and we can then customize our message a little bit to their specific circumstances. Mm hmm.

Harrison Kozak: [00:10:58] Yeah. And when people are calling in for the first time, they've listened to the radio show and want to learn a little bit more about what we do. Often, one of the biggest concerns for them is what is all this look like in transition? More often than not, somebody calling in, looking down the barrel of retirement and are concerned about how they turn their pension plan and their retirement assets into their paycheck. And they want to know how we can help with that. And that's what we spend a lot of time talking about here on the show. Typically, you'll run into a lot of people who are running into those sort of mental hurdles of how do I pull the trigger and know that I'll be okay and make that official first leap of faith hoping for the best?

Randy Sharman: [00:11:45] Well, I would guess because I'm not retired yet. It is kind of a scary proposition, especially if you worked at one career for most of your life and now it's like, Oh, I'm not going to do it changes your whole identity. And, you know, there's other things to consider too, right?

Wade Kozak: [00:12:01] There is fear at all kinds of levels. And, you know, I think a younger investor kind of thinks that the biggest fear button is going to be the do I have enough right and how do I save enough? And how do I get to that point where I have enough that I can retire? And I think the as clients approach that date and they get closer to that date, most of those do I have enough fears more or less go away. They're they're still there to a certain extent. But now the fears that come in are, what am I going to do with myself and what's going to get me out of bed in the morning and where am I going to draw my self-worth from? Like once I see some employment and move on to whatever the next stage in life is. And, you know, to be honest, we aren't trained to give advice on on that side of things. But just by the nature of having, you know, held so many people's hands across that threshold as they make that change, we know what a lot of those pitfalls are. And we can just share our experiences and the experiences of other clients who've who've done this before them as to as to how that ends up working out.

Randy Sharman: [00:13:10] Mm hmm. That number, again, is 403-260-0568, if you want to call and set up a consultation. Kozak Financial Group. Okay. We're chatting with Wade Kozak and Harrison Kozak from the Kozak Financial Group. All right. Let's get to one of our topics today. Inter-generational wealth transfer. What is that?

Harrison Kozak: [00:13:31] So staying on the themes of concern, Randy, one of the one of the biggest sort of question marks for a lot of people when looking at their financial picture is how am I planning to give some or all or part of this to the next generation, to my kids or to my grandkids? And that is that is a little bit of a scary proposition for a lot of people. Sometimes it can be hard to sort of relinquish control officially. And this runs on the scale of maybe you own a family business that's being passed on to the next generation all the way down to just I plan to give my kids a substantial gift for their wedding or to purchase their first home. And more often than not, people will have one or more concerns thinking about, Oh, I'm not sure if my kids are ready for this, if they'll know how to handle it. And that can that can give them pause before they before they do anything. And it can it can sort of give them cold feet to the whole proposition. Very worst case scenario is that the kids find out what kind of assets they're going to receive at the first time. The will is read when their second parent passes. And you don't at that point have the ability to answer questions or address concerns of your kids. So our advice is often to start today. Why don't we open this conversation up to to the kids and include them in the planning and what you're thinking? That being said, I should point out that we are not tax or legal advisors. And so anything that comes to do with the legality of your will and power of attorney etc. Or the tax picture either for your estate or while you're living. You should address those experts as well. Your accountant and your lawyer.

Randy Sharman: [00:15:13] Mm hmm.

Wade Kozak: [00:15:15] So when when Harry first suggested this as a as a topic of conversation, my first thought was, I wonder if he's coming at it from a point of hopefulness. But but that aside, this is this is a question that that we often get. And at a at a very basic level. A question that I'll often get from a client who is considering writing a check to a child for whatever reason is what is the tax consequences this of this like is this a if I write a check to my son or my daughter for $50,000 to help them out with a down payment, is that taxable income to them? And the answer to that question is unequivocally in Canada. No, it is not. It's that is a gift like any other. There is no tax consequence to giving that gift to a to an adult child. There can be tax consequences if you give that gift to a minor child and they start earning investment income with it. That income can be attributed back to the parent because that CRA doesn't want you using your minor children to put investments in their hands and earn income in their hands, and they'll attribute that income back to back to the parent. But if it's just a straight up gift to help out with a down payment for a for a wedding, for just for any reason, that is not taxable income to the child or tax deductible to the parent, for that matter.

Randy Sharman: [00:16:42] And a lot of the stuff is outside of your realm. I get it. If you're talking about writing up wills and those types of things, but you also can kind of point people in the right direction if and when it is outside your realm. Right. There's I'm sure over time you've developed a quite a repertoire of people that you can refer those questions to.

Wade Kozak: [00:17:03] Right. Of course. Yeah. We have we have tax and legal experts in our corner that can can certainly help. And and if we need a third party opinion on certain things, we certainly have those people to bring into the picture. But from a general knowledge point of view, we can, like you say, help steer clients in the right direction on these things. And one thing that comes up quite a bit, especially in today with with housing prices, the way they are in certain jurisdictions, is parents wanting to help their kids with down payments on on houses.

Randy Sharman: [00:17:37] Mm hmm. Great advice. Give them a call. 403-260-0568. KozakFinancialGroup.ca is Wade Kozak and Harrison Kozak and their team, their website. It's the Kozak Financial Group today on Talk to the experts CIBC Wood Gundy again that phone number 403-260-0568. And we'll be back with more financial advice from the Kozak Financial Group when Talk to the Experts continues next on 770 CHQR.

Randy Sharman: [00:18:09] I'm Randy Sharman. Joining us today is Wade Kozak and Harrison Kozak from the Kozak Financial Group, CIBC Wood Gundy, KozakFinancialGroup.ca is their website and the phone number 403-260-0568. We were talking about intergenerational wealth transfers and you talked about in general terms last segment. What about some examples or some scenarios that you can give us a bit with to help us understand it a little bit better?

Harrison Kozak: [00:18:38] Sure. So Wade's example of perhaps you're going to give your kid $50,000 to help out with a down payment on their first house. A lot of times parents will wonder about the sort of implications for this with the kid. How does that impact them? Way to address that. Of course, it's not taxable or tax deductible to the parent, but there are other more sort of minutia related questions about sort of the emotional ties to that money and maybe some potential pitfalls down the road. One question we get a lot is if I give my son or daughter $50,000 to buy a house and they're married or have a long term partner, how do I ensure that that money stays safe and out of the partner's hands in the event of a possible relationship breakdown? Mm hmm. And that's that's a difficult conversation to have, both with your child and for your child to have with their partner. Mm hmm. One of the tips that I can give is you want to start early, and you want to give a lot of sort of advance notice that these conversations can be had so that you can protect feelings as best as you can, while also protecting your interests. In the case of a single child, it's not so much a concern that you might be concerned down the road if the house gets put into dual names. And of course, at that point, the matrimonial home, no real way to protect that money if it's in the in joint hands that way.

Wade Kozak: [00:20:08] There are there are some protections that can be put in place. So cohabitation agreements can basically be set up such that the the partner who is in financially contributing to the purchase of the home basically signs a form saying they understand they're a tenant in this home and they they have no rights to the value of the home and the event of in a relationship breakdown if if it's possible through the debt servicing ratios, etc., the advance can be done through a form of a prescribed rate loan. So technically there's a promissory note outstanding that the parent could demand that money back in the event of a relationship breakdown to go and protect the assets. A lot of that protection goes off the table, though, once there's children involved, right. If if if a couple living together has children and is now a matrimonial home and that that loan might still be outstanding, but you can't it's very difficult to have a cohabitation agreement with somebody you're parenting with. So there's a limited amount that you can go and protect there, mainly because you can't keep that money separate and apart. There, again, we're not legal experts in this regard, but we do have some experience. But if if you receive a gift from your parents and you always keep that gift separate and apart from other household assets, even as a married couple.

Wade Kozak: [00:21:38] So you inherit $100,000 from a grandparent, you put it in a separate investment account, you invest it separately. You don't mix it with other household money. In the event of a marriage breakdown, that account will always be off the table before everything else gets split up. And so there are things that can be done if you arrange your finances carefully to protect these assets. Once it's once it's used to make a down payment on a house in joint names, it's it's by definition, comingled into the into the household assets. So it becomes a little bit more difficult. And you have to be careful. The best way to protect those assets is through equal financial contribution from both partners, quite frankly. Right. And this only becomes an issue when there is lopsided, unequal contribution to to that that house purchase. Otherwise, it's always our advice when anybody receives a significant inheritance to keep that inheritance in an investment account off to the side in a separate account number. So you can always point at it and say that money came from that inheritance and it was never used for any other purpose. And that always keeps it off the table.

Randy Sharman: [00:22:55] And you, Harrison, were talking about having conversations that can be difficult, but it's better to have those conversations now rather than go through that sort of scenario, whatever it is and then. Have to talk about it then, right?

Harrison Kozak: [00:23:08] Exactly. And starting early helps, right. The sooner you start these conversations with your own kids or with your kids and their partners, the better. If you wait until it's too late, it can sometimes feel a bit icky. And you don't want to have that conversation and you think, Oh, it'll probably all be fine, and you might come to regret that down the line. If you can do the difficult work upfront of having that sort of uncomfortable conversation, at least the first time, it'll get a little bit easier and easier as it goes. And you and your kids can develop a understanding of how all this works together. And that doesn't just go for perhaps this gift we're talking about, but for the entire financial picture, if you're a person with substantial assets that are going to be transferring to their kids, you want to plan ahead such that when they eventually inherit all of this, they don't turn into a lottery winner who walks away thinking, Well, I'm set for life now. And suddenly, a couple of years down the line, from that point, it's not so true.

Wade Kozak: [00:24:16] So like that scenario we just described, you're kind of imagining in your head a you know, I'm saying relatively younger children, right? Maybe in their late twenties or early thirties, that's, you know, the stage are they're ready to go and buy a house. Another scenario we run into are more elderly clients who, you know, they've come to a point in their life where they realize that they are never going to be using all of their assets for themselves. And there is going to be a significant sum left over for the estate, and they have it in their head that perhaps they would like to share some of this now. You know, I had a client who called it giving with a warm hand, which is, you know, fairly descriptive. And they and then they perhaps can actually see their kids and their grandkids enjoy the benefit of this. And they want they want some guidance on that. And usually by this stage, there might be fewer issues about I want to protect my child from a relationship breakdown, etc., because there's already grandkids in the picture, etc., etc.. But there's still there's still can be concerns. And what I see where I see the gifter, the parent who wants to make the gift sometimes getting their their head tied up in knots is they want to write this check to each of their children and give this gift, but they want to somehow keep strings attached to it even after the money is changed hands. My advice to them is always to give the gift and kind of forget about it. Right. And you might not approve of maybe what some of that money you might think they're going to use it to pay down a mortgage, but instead a boat shows up in the driveway.

Randy Sharman: [00:26:00] And they're off to Mexico for ten days.

Wade Kozak: [00:26:03] And you just kind of have to get over that, right? Otherwise it'll kind of eat you up inside. And you will you will not be a happier person for having done this. And part of the reason you're making this gift, perhaps, is to. Is to get let them make some mistakes with that money and perhaps learn from some of those mistakes so that when they receive a more substantial sum, when the will is actually being read, perhaps they've actually gained some wisdom from those first gifts. And they they've learned something, and they handle it a slightly different way.

Randy Sharman: [00:26:35] Mm hmm.

Harrison Kozak: [00:26:37] Exactly. And this is more anxiety counseling than it is financial counseling.

Randy Sharman: [00:26:43] Exactly.

Harrison Kozak: [00:26:43] However, it it is worth discussing now. Right. And again, the more time you spend talking about it, whether that's with your financial advisor or your spouse or with your kids, the better, because you'll be more comfortable at that eventual date and you'll be confident in what's going to happen.

Randy Sharman: [00:27:01] Yeah. Yeah. These are people people problems, not financial problems, but your clients are people. So I'm sure this comes up as you're talking about it and it's part of your job, even though you know it isn't part of your job.

Wade Kozak: [00:27:13] But well.

Randy Sharman: [00:27:14] That's the way it is.

Wade Kozak: [00:27:16] That's part of our experience. Yeah. And we can share that experience from other scenarios as to what, what's worked well, what doesn't work well. And there's like there's a myriad of other options, right? Including using trusts, including having having family meetings and counseling sessions to to kind of break all of this to people slowly and there. And all of those options, including trust, have advantages and disadvantages. I would say probably nine out of ten times when we're asked by clients, should, should I be considering a trust in this scenario, we look at it and come away saying no. Like adding the trust basically adds a layer of complexity that is unnecessary in this particular situation. But there are some absolutely excellent situations where where trust can be used and are very useful.

Randy Sharman: [00:28:14] Chatting with Wade Kozak and Harrison Kozak from the Kozak Financial Group, CIBC Wood, Gundy, Kozak Financial Group. Okay. If you want to set up a consultation or if you have some questions for 403-260-0568. We'll chat more with Wade and Harrison when Talk to the Experts continues next on 770 CHQR.

Randy Sharman: [00:28:42] Welcome back to Talk to the Experts on 770 CHQR. Today, our guests are Wade Kozak and Harrison Kozak from the Kozak Financial Group, CIBC Wood Gundy, KozakFinancialGroup.ca is their website, 403-260-0568 is the phone number to set up a consultation. Doesn't cost anything to chat, does it?

Wade Kozak: [00:29:04] Nope.

Randy Sharman: [00:29:05] We were talking about before the break intergenerational wealth transfers, talking about, you know, parents handing down to the children. What about the other way around? What about scenario of the children are making really good money and the parents are struggling and they want to help out their parents.

Wade Kozak: [00:29:23] So we've seen that when it's when there's just one child involved, as in the parents only have one child. It's really easy. The children basically can help the parents as much or as little as they want financially. And they know that, you know, in the end, anything left over is just going to come straight back to them through through the will. It gets a little more challenging when there's when there is siblings and one has the financial means to help mum and dad, but the other one doesn't. And so the one who's helping, you know, I'm not saying this is their primary concern, but perhaps you want to make sure that as much as you're helping, perhaps most of it comes back to you if there's anything left, you know, quote unquote, in the end, so that the scenario I've seen occur is mum and dad are renting. The landlord is is moving them out and they have to find a new place to live at, perhaps an elderly age, which isn't very comfortable. And so one of the siblings says, you know what? Mom and Dad, I'm just going I'm going to buy you a condo. I'm going to buy you a house. I'm going to buy you a condo. Set you up to live in for as long as you are able. And in those situations, I basically tell the client, the son or daughter with the means to buy that property and keep it in their own name. So it's not part of mum and dad's estate. And if they, if they bought that house from mum and dad, that house basically comes back to them when Mum and Dad no longer needed. And that helps keep everything fair and protect the assets for themselves, etc.. Mm hmm.

Harrison Kozak: [00:30:58] And again, I'm a bit of a broken record on this at this point. But if you're if you're going through this and you have a sibling and you're worried about what this looks like down the road, the easiest way to get around that is to talk about it and say, this is what I'm doing for mom and dad. This is how I'm setting it up and why. And if you'd also like to help out, you know, we can figure out how that works or simply this is what I'm doing and you leave it at that. And that way your siblings know up front what's going on and don't feel left out of the conversation.

Randy Sharman: [00:31:30] Mm hmm. Well, yeah, I can see the scenario you're talking about. If you buy them a home or a condo, it's very easy to keep it in your name. Is there any repercussions if, say, I don't know, you give them $100,000 and let mum and Dad do what they want with it or.

Wade Kozak: [00:31:46] Not really, but but I would give them the same advice that I would give the in the other scenario, the parents, that is, if you give them a gift, it's a gift. Right. And however they spend that gift, you kind of have to, you know, not pay attention. Right. Otherwise, it'll drive you crazy if you don't if you don't approve. So if it's a gift, it's a gift. And I more see a matter of children with means, basically taking over a certain number of the bills their parents have. So rather than writing a six digit cheque, they basically say, I'm going to cover off your your utility bills, your Netflix bill, your whatever bill write to and for however long. And so basically it's a gift. It's a gift in kind of utilities or whatever.

Randy Sharman: [00:32:36] Mm hmm. Any other scenarios that come to mind that we haven't covered? Do you want to?

Wade Kozak: [00:32:43] There is one scenario that that will occur is when you have a somebody who's financially dependent on Mom and Dad, even as an adult, that that they are all of their life going to be dependent on somebody. And so Mom and Dad typically then have to make provisions in their will that a certain number, a certain amount of the assets are set aside to care for this financially dependent child throughout the rest of their life. And that may tie up some assets of other siblings. Right. That it might not be as simple will, where it's just divided, say three ways between three siblings, maybe more of Mom and Dad's assets have to be allocated towards making sure that this financially dependent child is taking care of the rest of their life. And perhaps that money has to go into a trust and be administered and doled out to them so that they don't lose their benefits, that they they continue to sort of arrange their financial affairs in as best a way possible. And so those situations can get much more complex and typically need the input of tax and legal professionals and sometimes even social work professionals as to as to how many assets can this child have in their personal hands before certain benefits start getting drawn back? And how do we avoid those those government benefits being from being drawn back? And usually it's one of their siblings that ends up being the trustee of that trust.

Wade Kozak: [00:34:20] So that's a scenario that I can think of that we've dealt with in the past. I've seen clients set up more complex structures where there is a lifetime trust, where all of the income is distributed to the children, and when the children are gone, the principle goes to charities. Oh yeah, they're quite rare, but pretty much anything under the sun is possible with the trust, but always understand that with the trust there's now a separate tax return that has to be filed. There's a trustee that has to pay attention to these things. It is a more complex situation and if at any point you make a mistake with how you're allocating the income out of the trust, etc., you can get into a lot of trouble with CRA and perhaps lose a lot of the benefits that that you thought you would have. And so we typically only recommend that in circumstances where it warrants that level of complexity.

Randy Sharman: [00:35:17] Lots of different scenarios. So that's why you should call them to get a get an appointment made up. It's free. 403-260-0568 KozakFinancialGroup.ca. Today we're chatting with Wade Kozak and Harrison Kozak. We have about 2 minutes. What should people be doing right now? I know the tax season is done as far as getting your filings and everything like that. I don't think tax season is ever done, but anything in particular that people should be looking at before the summer, because it seems to me people will in the summer comes, they kind of forget about what's going on, don't they?

Wade Kozak: [00:35:51] Well, one timely thing is the notice of assessments are out like so you've probably already filed your taxes, you probably have your notice of assessment back. Now is the time. Don't wait till the end of the year, see what the RSP contribution is. Make a determination if you if you if it makes sense to make that RSP contribution this year because you should know by now, right, that you're still employed and have income, etc. And while it's top of mind and that number is still sitting on a desk somewhere and not filed away, get that contribution done.

Harrison Kozak: [00:36:23] What do you and we talked a little bit last time about financial spring cleaning. We've talked a lot about legal stuff today. Yes. Maybe it's a good time to review your will and your power of attorney, make sure that you have both in place. One does not equal the other, so you'll need an executor and a power of attorney and vice versa. And if you don't have those, make sure you get in touch with your legal advisor, whoever that may be.

Randy Sharman: [00:36:46] Mm hmm. Well, it sounds like you have a good team of advisors who've been doing this for a very long time. So, you know, anything that you can handle, you can find someone that could help your clients out, right?

Wade Kozak: [00:36:57] 100%, yeah. And we have some excellent professionals who we've dealt with multiple times, and I trust their opinions and they don't cost an arm and a leg. So I like people who people who I am willing to deal with myself.

Randy Sharman: [00:37:13] Give them a shout. 403-260-0568. To set up your consultation. Kozakfinancialgroup.ca is their website. We've been chatting today and learning a lot from Wade Kozak and Harrison Kozak from the Kozak Financial Group, CIBC Wood Gundy. Some parting thoughts, gentlemen.

Harrison Kozak: [00:37:33] Have a good weekend.

Wade Kozak: [00:37:34] And you know, Summer seems like it's finally here, finally a little disappointed with the with the last hockey game I watched. But, you know.

Randy Sharman: [00:37:43] Football season's here.

Wade Kozak: [00:37:44] Now. That's right.

Harrison Kozak: [00:37:44] Exactly.

Wade Kozak: [00:37:45] You can turn the page.

Randy Sharman: [00:37:46] Exactly. And you've been listening to talk to the experts on 770