Miranda and Sébastian sold their accounting firm

THE SITUATION

Miranda and Sebastian are 64 and 66 years old and have 4 adult children and 2 grandchildren. They came to meet us to get a second opinion on their financial situation. When they sold their accounting firm 5 years ago, they obtained several million dollars. It took them more than 25 years to build a major office with hundreds of commercial clients and in-depth expertise in cross-border taxation.

Having almost always done business with the same local financial institution, it was therefore natural for them to entrust the fruits of their labor to the advisors in place in their branch. They were praised for the sophisticated products for wealthy clients and the security of capital through the reputation of this major Quebec institution.

In 60 months, they consider themselves to have made good returns, but they understand that the market has been quite generous to just about everyone. But now, two elements of the service offered disappoint them. Since opening their account, they have seen at least 6 different advisors come through. This high turnover of staff makes them dizzy and insecure. With each change, a new relationship is slowly established with the obligation to retell their professional story from the beginning and to repeat their financial and property concerns. According to their words, we understand that these too frequent changes exhaust them morally.

Then, they have discomfort with the financial plan* that we prepared for them 3 years ago.

This rather simplified plan leaves several questions unanswered. Having worked for a quarter of a century in taxation, they have the impression that many tax aspects have been glossed over.

Like for example:

• Calculation of taxes on the condo in Florida and the chalet in Orford, in the event of the death of both spouses.

• They have almost exhausted their unregistered capital held personally, and are wondering whether they should immediately disburse RRSPs or the amounts in their management company

• They are also very surprised to see that their TFSAs are not maximized. The approximately $30,000 they have together only serves as reserves for municipal tax payments. They doubt this unstrategic use.

OBJECTIVES

Join a team of trusted advisors who will follow them for years. This team must have advanced tax expertise, in order to better plan their capital disbursements and the transfer of their assets.

KEY FIGURES

Balance sheet as of January 1, 2021

Combined assets

Bank accounts: $18,000

Primary residence: $926,000

Chalet in Orford: $620,000

Condo in Florida: $340,000

TFSA: $30,000

RRSP: $729,000

Management company: $4,550,000

Net worth: $7,213,000

OUR SOLUTIONS AND RESULTS

After a few meetings, Miranda and Sébastian clearly felt that, unlike their institution, the advisors and planners of our firm are entrepreneurs who have been in office for decades and very happy with their lot. By dealing with “associated professionals” in business like they were when they owned their accounting firm, they realize that “staff stability” becomes an incredible added value.