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The Quarterback

When a client with a disability came seeking answers to an inheritance conundrum, Eric Warden reached out to his network of tax and estate experts for creative solutions.


Date: October 6, 2017

At Eric Warden’s office in Peterborough, Ont., the phone rarely stops ringing – even though it’s August. It has become so busy that Warden, a financial advisor at IPC Investment Corporation, recently convinced his son to leave a major energy company to join the business. “My practice is never slow,” says Warden. “With all the turmoil in the industry, with all the regulatory change, it’s going to be a tremendous opportunity for growth.”

Warden’s increase in call volume might be on account of the expertise he brings to the table – a combination of advisory services coupled with extensive tax knowledge that allows him to reduce his clients’ tax burdens. These skills certainly come in handy with his cross-border clients, and small and mid-size business owners, as well as his high-net-worth clients. “We combine investments with tax knowledge so we can actually improve the benefits above what you would get just on the investment side alone,” says Warden, CFP, CLU, CH.F.C., TEP.

Warden sees himself as a quarterback, acting as a conduit between seasoned experts and his clients. He’s not afraid to ask questions of his network, a group of advisors who belong to STEP – the Society of Trust and Estate Practitioners – and he often calls on the Mackenzie Tax and Estate Planning team for tax advice. “I always like to get a second opinion – that’s been valuable more times than I can count,” says Warden. He says he’s often in contact with the Mackenzie team two or three times a month.

That’s who he turned to when a client who is paraplegic and now in his mid-sixties approached him, wanting to invest some funds without cancelling out his Ontario Disability Support Program (ODSP) income. The program only allows recipients to earn just $200 a month or less – every dollar above $200 reduces ODSP income by 50 cents.

“Unbeknownst to him, an uncle left him an inheritance,” says Warden. “It wasn’t huge, but the amount would have disqualified him from ODSP. It caused the individual a huge amount of stress.”

Warden first considered placing the assets in a Henson trust, which allows an estate trustee to pay expenses for a child with a disability out of a fund set up by their parents. He knew the client’s parents had planned to invest the profits from their lakeside property in such a trust. If Warden’s client gifted the inheritance to his mother, she could add those funds to the trust. This type of arrangement does not affect ODSP payments because the estate trustee manages the assets; for ODSP purposes, the money in the trust does not technically belong to the recipient of the funds.

But Warden knew a Henson trust would not give his client absolute control over his money. He emailed Mackenzie’s Tax and Estate Planning team for guidance. That’s when Carol Bezaire, the company’s Vice-President of Tax and Estate Planning, suggested Warden examine the registered disability savings plan.

These plans, which a lifetime contribution limit of up to $200,000, allow income to grow on a tax-deferred basis until money is withdrawn, and the recipient can access funds either in a single withdrawal at any age or in instalments beginning at age 60.

“I hadn’t thought of that,” says Warden. “It allows him to have some control over it, as the payments from the RDSP do not affect his ODSP pension.”

His client is thrilled with how things worked out, all because Warden had people he could call on for help. “We have a huge responsibility to clients,” says Warden. “We need to follow through in ways that go beyond the numbers on the investment.”

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