distinctive features, such as the following:
1. Estate bypass
Because of the nature of the Contract they’re sold under, the Death Benefit is automatically paid out to the Beneficiary designated in the Contract
within five business days1, thereby avoiding estate settlement costs and delays. That way, your client’s loved ones won’t have to jump through hoops to access the funds they need for their immediate needs.
1 Some conditions apply, including receipt of required documents (e.g., death certificate). The Beneficiary must be named in the Contract.
2. Decision-making control
Because the Death Benefit isn’t part of the estate, it’s paid out confidentially to the Beneficiary designated in the Contract2. If confidentiality is a priority for your clients, or if they want to make a private donation, a guaranteed investment fund Contract can be a valuable estate-planning tool.
Gradual wealth transfer
Plus, with the annuity settlement option, your clients can set the conditions for how their Beneficiaries will receive their share of the Death Benefit.3
2 Except for a TFSA Contract, tax slips must be sent to the Estate’s trustee to declare the Contrat’s fair market value at the moment of the Annuitant’s death.
3 For the Death Benefit to be paid out as an annuity, the Contract Owner must complete form 17-0136_800E, Beneficiary Designation – Annuity Settlement Option (Endorsement), either when they complete their Contract Application or any time thereafter.
3. Creditor protection4
If your client is self-employed, a business executive, a board member or a professional such as a doctor, lawyer or notary, their work puts them at high risk of liability. One of the advantages of the Helios2 Contract is that it can be made exempt from
As an annuity contract issued by an insurance company, the Helios 2 Contract is able to provide some protection from creditors.
4 The information in this guide is provided for illustrative purposes only and does not constitute a legal opinion. Exemption from seizure rules can be complex and may vary between provinces. Interested parties should consult a legal expert (lawyer or notary) for an assessment of their specific situation.
|Class of Beneficiary designated in an annuity Contract established by an insurer||During the Owner’s lifetime|
Preferred revocable Beneficiary
- Married spouse*
- Ascendants:* parents (and grandparents in Quebec)
- Descendants:* children and grandchildren
|Exempt from seizure|
|Any irrevocable Beneficiary||Exempt from seizure|
* In Quebec, the relationship must be between the person(s) named in the table and the Contract Owner. In the rest of Canada, the relationship must be between the person(s) named in the table and the Annuitant of the Contract.
4. Estate planning
The Helios2 Contract is a great way to balance out an estate plan.
1. A temporary solution while finalizing a will
Did you know that half of Canadians don’t have a will?5 When someone dies without a will, the law decides how their assets are distributed. But by designating a Beneficiary on their Contract, your clients can make sure their wishes are respected if they die before their will is finalized.
5 CIBC (2013).
2. A smart solution to supplement a will
Did you know that it generally takes over a year to settle an estate? Plus, there are fees involved in the probate process. In many provinces, probate fees are based on the value of the estate.
|Settling an estate||Up to 10% of the value of the investment ||Up to a year|
Five business days7|
6 The Beneficiary must be named in the Contract.
7 Some conditions apply, including receipt of required documents (e.g., death certificate). The Beneficiary must be named in the Contract.
Use the estate impact calculator to show what your clients will save on fees.
In addition to the fees, another aspect of the probate process is that the will is made public. However, a Helios2 Contract isn’t part of the estate. Your client’s Contract details will remain confidential.