Estate Planning

Using segregated funds to protect the value of your estate

Your estate is the sum of your lifetime of hard work, smart investing and sensible financial planning. It is your greatest legacy to your loved ones. Estate planning allows you to protect the wealth you have accumulated over a lifetime, while helping you to better manage your family’s financial future.

What are segregated funds?

Segregated funds are investment funds which take the form of life insurance contracts, which are completely separate from the general investment funds of the company that offers them. Segregated funds offer the combination of growth potential and principal protection. Incorporating segregated funds as part of your estate planning can benefit you in two primary ways:

1. Capital preservation

The death benefit feature preserves your capital for your named beneficiaries. It guarantees that beneficiaries will receive a specific percentage of the value of the investment upon the death of the person whose life is insured under the contract, even if the market value of the investment goes down. It’s a feature you won’t find in any mutual fund or traditional stock or bond portfolio, and it’s your reassurance that the inheritance you want to leave for your loved ones will be there for them.

2. Bypassing probate

This enables your segregated fund assets to bypass probate (the process by which a court formally approves a will as the valid and last testament of the deceased person), thereby minimizing the costs of probate. Probate is often a lengthy, costly, and public process. Since the money held within a segregated fund bypasses probate, proceeds are paid directly and quickly to your named beneficiaries, saving your beneficiaries the time and costs involved in the probate process. Additionally, segregated fund contracts are not public documents, so the disposition of the assets stays private, unlike assets distributed through a will.