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Using a Family Trust to finance your child's education By Heather Hwang Family trusts have been used for generations to hold wealth and property for children and grandchildren. A lesser-known benefit of family trusts: they can be used to finance your children's education in a tax-efficient manner. Bill Steele, a 44-year-old business-owner and Chartered Accountant, took the advice of Alan Stewart, his Investment Advisor and Financial Planner, to create a family trust as a means to pay for his two children to attend an independent school. "The RBC Dominion Securities Family Trust is a fully documented trust that allows Canadians to save taxes by earning investment income and capital gains in the hands of children or grandchildren who pay little or no taxes," explains Stewart, an Investment Advisor and Financial Planner with RBC Dominion Securities. "Every child or grandchild in Canada who has no other income can earn up to a certain amount of investment income tax-free every year. The Family Trust can be established to take advantage of this annual opportunity while still providing the parent, in certain circumstances, with control over the monies loaned to the trust." The strategy of diverting income to your children or grandchildren through a trust is possible because every person in Canada, regardless of age, can earn about $10,000 in interest income, $20,000 in capital gains or $50,000 in eligible dividends a year before they are required to pay any income tax (Ontario). Children are unlikely to have additional income, so any investment income and capital gains earned in a Family Trust can be distributed to the children and will likely be tax-free in their hands. "For our family, this financial strategy will not only reduce our tax burden, but it will benefit our children," says Steele. To learn more about family trusts or what options may be best for your family, consult with your legal or tax advisor, or contact Alan Stewart at alan.stewart@rbc.com. For more information about independent schools, please visit www.educationoakville.com. Alan J. Stewart, CFP is an Investment Advisor & Financial Planner with RBC Dominion Securities Inc. Member-Canadian Investor Protection Fund Paying for School Advertorial 19 · Wednesday, September 5, 2012 OAKVILLE BEAVER · www.insideHALTON.com KIDEX WEEKEND ACTIVITIES ·Art ·Chess ·Drama ·Yoga ·Leadership ·Anti-Bullying Strategies ·Photography ·Science & Technology Fall Bridge Lessons Mississauga-Oakville Bridge Centre For Beginners...8 weeks, $189.00 For "rusty" Players...8 weeks, $189.00 Monday evenings 7:30, beginning Sept. 17th Monday mornings 9:30, beginning Sept. 17th Wednesday afternoons 1:30, beginning Sept. 19th Tuesday evenings 7:30, beginning Sept. 18th Bridge games For newer Players... Wednesday evenings at 7:15 - ongoing weekly · Thursday mornings at 9:00 - ongoing weekly And The American Contract Bridge League Please call (905) 820-5728 www.raynerbridge.com · Core French · Literacy · Math · Science · Culture · Music · Art Enriched JK/SK Program Toddler and preschool Programs Full Day and Half Day Options Year Round Programs 3420 Rebecca Street Unit #11 Oakville L6L 6W2 905.827.7166 · admin@kidex.ca · www.kidex.ca