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[theme music] >> Hello, I'm Greg Bonnell. Welcome to MoneyTalk Live, brought to you by TD Direct Investing.
Every day, I'll be joined by guests from across TD, many of whom you'll only see here.
We're going to take you through what's moving the markets and answer your questions about investing.
Coming up on today's show, we will discuss what president Joe Biden dropping out of the presidential race means for the markets. TD asset management Christian Medeiros weighs in. Later, TD Wealth's Nicole Ewing is going to take us through how to do a midyear checkup of your personal finance situation. And in today's WebBroker education segment, Bryan Rogers will show us how to set up alerts while using the platform. Here's how to get in touch with us. Just email moneytalklive@td.com or fill out the viewer response box under the video player on WebBroker.
Before we get to all that and our guest of the day, let's get you an update on the markets. First trading day of the week.
Some green on the screen on Banwell streets. 120 points for the TSX Composite Index, you're up about half percent.
Among the notable movers include Sleep Country. Fairfax Financial buying Sleep Country for roughly $1.7 billion, has those shares moving higher to the tune of 27 1/2%.
I want to check in on Air Canada. Of course, that global IT outage, on Friday was a spotty day, it's been hitting the airline. Air Canada is now down 4% on today's session, $16.32. South of the border, let's check in on the S&P 500.
It was a bumpy week last week. We are making gains today but they are modest. 31 points to the upside are about half a percent. Tech heavy NASDAQ, how is it bearing against the broader market?
The NASDAQ is up about two thirds of a percent. Verizon out with their latest earnings and this street is clearly not impressed. $39.02 on Verizon, you're down a little more than 6%. And that's your market update.
Got another twist in the race for the White House, incumbent Joe Biden dropping out of the running. Now here to discuss what it could mean for the markets and the economy, Christian Medeiros, VPN portfolio manager for asset allocation at TD asset management. People know what's happened up till now with Joe Biden saying it, I will not seek reelection. What happens next?
>> The Democratic National convention on August 19, they need to be elected by the majority of delegates to be the nominee for the party.
And then they will make it onto the ballot. With Biden stepping down, those delegates are no longer pledged to him.
They become available to anybody else. But what happened is a Biden endorsed Kamala Harris and many people in the party have endorsed her, we are increasingly seeing state delegations followed behind her and others that may have challenged her, such as prominent governors like Gretchen Whitmer or Newsom have decided to run in the convention, so it seems like Kamala Harris will run the delegates on the convention day.
That seems the likely path forward. We saw the month until then. It's possible the Democratic party might want a more open convention with other challenging her or many primary. But those are less likely.
>> If we end up in a situation where it's Kamala Harris, what about policy positions? Would she take a different track than Joe Biden has?
>> It's very likely that she's going to have a status quo and be very similar in policy and priorities to Joe Biden. It's unlikely she would run on a different platform at this point. If she were to win the election, it's very likely that given the congressional map, they would have large majorities in either the House or Senate. It would likely be split. Even if she were to have different policies she would be unlikely to pass them.
>> Let's talk with that. You brought up an important point. We have been so, and for good reason, focused on the presidential contest. Now you have Pres. Biden saying he will not run for reelection, endorsing Harris. Come November, there will be a presidential election but also Congress.
This is pretty key.
>> I think it's one of the most important things to consider because if you control Congress, you can pass legislation. If you don't, it's tougher for the president.
In this case, one big thing that forced Biden to resign was not only his pulling looking back for himself in key swing states, it was also looking challenging for people down the ballot in Key House and Senate races which are pivotal for Democrats in this election cycles that put a lot of pressure on him to resign.
Now that he's off the ticket, it looks a lot better for those congressional candidates in the house and Senate races because Kamala Harris will be better at turning out the vote and she doesn't have the same baggage about old age and concerns a lot of others had behind Pres.
Biden. As a result, we might see better turnover Democrats in those key races which means it's more likely to have a split Congress, even if Trump won the election, it was looking like a sweet before but now is what Congress is back is a possibility which means he's not going to be able to do as much as he would've liked to do if he had swept Congress.
>> Let's talk about former Pres. Trump. We have been so focused on the Democrat side with all these breaking developments, what are the implications for his policy omissions? We know he has laid out certain things that he would like to put into play.
>> On tax, the big tax cuts he passed back in 2017, they need to be extended or made permanent in this presidential cycle.
It is quite possible that if he does not have a sweep of both the House and the Senate, it will be a lot harder for him to extend those tax cuts. As a result, we might actually have some of those cuts expire. It's not a done deal.
On immigration, there a lot of short-term changes he could make. Lastly, when it comes to repealing or undoing some of the Biden air legislation like the inflation reduction act, things he is on climate, if Trump is unable to win control of Congress, he will not be able to repeal some of that Biden air legislation.
>> Obviously, it's a long road to November, a lot happened just in the past week.
What are investors supposed to think about this to Mark what are the applications about the markets?
>> The markets word feeling confident in a Trump win and sweep of Congress last week.
Not too much has changed.
I think what it shows that we should not be betting the farm for months out from an election.
Already in July, we have three or four big surprises, poor debate performance, an assassination attempt, Biden dropping out of the race, we have to be opened to other possibilities. Biden was constrained in his path to winning you and the vast majority of Americans thought he was too old and incapable of taking office. Now we're going to have a new candidate who will not have that baggage.
It's possible Democrats could do much better than people expect. Democrats have a fighting chance and is going to make the election much more interesting going into November.
>> That was Christian Medeiros, VPN portfolio manager for asset allocation at TD Asset Management.
Right now, let's get you updated on the top stories in the world of business and take a look at how the markets are trading.
Canadians will be watching our central bank this week to see if Gov. Tiff Macklem delivers back to back rate cuts. A pullback and headline inflation and soft consumer spending are increasing the odds of an interest rate cuts in the Bank of Canada. If you took a look at last week's inflation report, it did show a lack of progress on the bank's core measures.
Got shares of Bank of America in the spotlight.
According to regulatory filings, Warren Buffet's Berkshire Hathaway has trimmed its stake in the Wall Street giant. That's after Bank of America shareS rallied more than 25% year-to-date. While Berkshire sold almost 1.5 billion in bank of America shares over several days last week, it is still there second-largest holding behind Apple.
Last week's far-reaching IT outage still weighing on a major US airline.
We will start with CrowdStrike, the IT company and their update at the heart of what happened to Microsoft computers around the world. Delta has cancelled more than 4600 flights over the weekend.
Delta is down to the tune of about 2% today.
Quick check in on the markets. First trading day of the week. Some green on the screen on band Wall Street. 124 points to the upside, about half a percent for the TSX Composite Index.
The S&P 500, after a bit of a choppy ride last week, is showing a bit of strength today. It's of 31 points were little more than half percent.
While summer is a good time for getting outdoors and enjoying the weather, it can also be a good time for a little midyear review of your personal finance situation.
Joining us now with some of the things you may want to keep in mind is Nicole Ewing, Dir. for tax and estate planning with TD Wealth.
>> Thank you. Great to be here.
>> People define themselves with a little bit of time on their hands. Maybe go away somewhere and you've got a computer with you, maybe you want to start thinking about a few things. Where do you want to start? Maybe our budget?
>> Sure. That's where we should reign things and or make changes immediately if we are offsite. Budget is a good place to start. Hopefully you spent the beginning part of the year putting together what you expected to be spending, what you expected to be saving and making some decisions about discretionary versus nondiscretionary spending. Let's reflect on it, see whether or not we are in line with that spending and may be why we are not if we are not.
Anything can happen, right? We are not just stagnant through the first number of months of the year. Life may have changed as well. We may have had a job change, a lifestyle change, perhaps our rent or mortgage amounts have changed as well.
Use that information and bring it into your budget, make the appropriate changes were necessary and give yourself a pat on the back if you are otherwise on track.
>> If you or otherwise on track. A pat on the back to anyone out there who was on track because it's hard in the summer. You start having a time, maybe start spending more than you should. Checking your credit score, why is this important?
>> Again, I get these notifications that I need to go back and check and check and check and frankly, if you are not making a point of going in and checking, you may not be aware of things that happened that you either intended to happen or that may not have been you're doing but might be a mistake. If there is something that's wrong, go in, make sure you are identifying that, making the appropriate actions on that.
It has increased or decreased, this may give you an opportunity to reflect on some of the things that your credit score influences.
For example, maybe you have some debt, maybe you have some financing arrangements that if your credit score has increased, you may have the opportunity to renegotiate those in a more favourable way. If your credit score has taken a hit, it might give you a good chance to reflect on why. Maybe something went off the rails that needs your attention.
>> We have taken a look at our budget and credit score to see where we stand there.
Some of us, I like to do this. I sent monthly contributions for certain things and I said it and I forget it. Every once in a while, maybe you need to think about it.
Un-forget it.
>> Look back at your goals, see if things of change, maybe your contributions are impacted by that.
Maybe you have the opportunity to increase that a little bit more than you had anticipated to be able to but also just to make sure that you are on track for the plan, we don't want to be coming in year end and quickly trying to make changes.
We have TFSAs, RRSPs, first home savings accounts, RESPs, all of these have the opportunities for us to make contributions. Be aware of what they are and allocate accordingly.
>> Now, obviously, through the course of the year, when you talk about getting some information together, I've had several friends and colleagues who have done various walks or rides for charity, put some money behind it, good causes, and then a receipt lands in my Gmail and it's just sitting there and I'm not gonna go looking for it until January or February or March,. Is it time guarantees together?
>> Get your receipts together, not just charitable but all of your receipts.
Anything you are needing to rely on next year for your taxes. I was it just that when it comes to charitable giving, it's a really good idea to have a plan for that, a strategic approach to your charitable giving. If that means helping out friends this year and giving 20 here in 20 there, you're going to need to accumulate those who are in a position to defend your prove that you have made those contributions.
Maybe you want to think as well about changing your giving strategy said that you are ensuring you have the biggest bang for your buck and your contributing in the way that you want to. Maybe you're maximizing things, looking at your gains, your securities that may have gains on them. There could be an opportunity to make a more impactful gift than you otherwise would be able to make.
You need to be able to defend your position to CRA next year, not only for your charitable donations but for all of the spending. Maybe you're at the cottage and doing some work that will allow you to increase the adjusted cost base of that property. Again, you will need to be able to demonstrate that down the road. You may not sell for another 10 years, make sure you know what you're doing with the receipts, have a plan and a way of ensuring that you know where they are when you need them.
>> Interesting discussion there are tax obligations. We might turn off parts of our brains during summer vacation, the tax machine never goes away.
Reevaluate maybe withholding taxes, tax loss harvesting?
>> Yes. Withholding taxes, if you are having taxes withheld on employment income, for example, you have either changed your life circumstances, you have the opportunity to ask your employer to make changes to those withholdings you can better maximize the use of those funds.
For tax loss harvesting, this is something that should not just be done at the end of the year. We need a strategy around that and we need to understand what we are doing. Certainly this year with the change in the capital gains inclusion rate, having these two different periods where taxes are going to need to be thought about, tax loss harvesting might look a little bit different to people in 2024 than it has previously and the way that is going to look in 2025. Certainly, if you are doing any investing through Corporation, there's a capital dividend account at play, pulling a gains tax free from the capital dividend account and making your tax loss harvesting part of your strategy.
>> This is a big one, estate plans. At maybe there has been some big news, weddings and aunts, babies and aunts, moving across the country. All of these things need our attention. Making sure that we have the appropriate documentation in place to ensure that if something happens to us and we find ourselves incapacitated or there's a death in our family that we have the appropriate documents to be able to go out there and do what we need to do to administer those affairs effectively and things change.
The law, unfortunately, has not changed to significantly in that regard.
In the capital gains tax, we expect taxes on death will be higher than they would've been previously because we are deemed to have disposed of all of our assets, we have a capital gains bill so maybe that estate planning in terms of planning for any taxes on death would need to be updated this year. If your personal circumstances have changed, they should be reflected in your documentation.
>> All important things to turn our minds to over downtime in the next couple of weeks over the summer. A great start to the program. We'll get your questions about tax and estate planning for Nicole Ewing in just a moment's time.
And a reminder that you can get in touch with us any time.
Just email moneytalklive@td.com or fill out the viewer response box under the video player on WebBroker.
Now, let's get our educational segment of the day.
Alright. If you want to stay up-to-date with what's happening in the markets, what progress tools which can help. Bryan Rogers, Senior client education instructor with TD Direct Investing joins us that was more. Great to see you. Let's talk about using alerts.
>> Alright, Greg, we are also busy these days. Any time we can work smarter and not harder, we will take advantage of that. So what I want to do is show people and web broker, there are some interesting tools you can use for alerts if you want to stay up to speed on market news and even stock news and things like that as well.
If we jump over to a broker, the way I think about this, if we go to research, news and commentary, it's pretty smart. On the top right hand side, because I am in news and alerts, that means it's going to be related to getting updates on current commentary and news and so on. If I click there, I click on set alerts, there is a number of ways you can get market gainers and losers as an example, you can look at this from a higher level basis on the index, you can set a frequency if you want to have it before the market opens or maybe afterwards, whatever your preference is there, you can look at prices going up or down. This is more of an overview. If you go up to the second tab, there's news and research. You can now enter in keywords. There's a lot of news about the election right now. Joe Biden taking back his candidacy. If you have a favourite report, you can set it that way. All this is going to do is is going to let you receive an email on a daily basis or whatever you want to set it as or you can get, in many cases, push notifications to your phone as well.
>> That covers the big macro themes and there are plenty of them to cover these days. What about individual holdings, whether peace talks or something else, you want to keep up-to-date on that stuff, how do we do that?
>> Let's take a look at that.
If we jump back into the platform, I'm going to close this. If I go to research and then click on stocks, the same place you would go if you are looking to pull up any stock as a symbol. I got Home Depot appear right now. Really simple. Same thing. Ewart is going to look for set alerts.
It's almost in the middle here.
You can click set alerts. It's amazing, the stuff you can do! Whether the price drops below a certain price or rises above, you can click the little radio button here to set whatever you want to look for and then you brought news, ratings, analyst readings that have changed.
There is just a huge plethora of information you can get, possibly even too much, but one thing you can do is it's almost setting up your own personal virtual assistant that can provide you all that information.
>> Great stuff as always, Bryan. I'm going to say before I let you go, I am going to set an alert for your summer beard there.
I tried last summer, I came back from vacation, you came back with a great beard.
It's a hard time of year to do it. But we will see how long your conviction holds.
Thanks for that, Bryan.
>> Thank you. Take care.
>> Bryan Rogers, Senior client education instructor with TD Direct Investing. For more information on educational resources, visit the education Centre on what broker or use this QR code to navigate to our social media page. Before you back to questions about tax and estate planning for Nicole Ewing, a reminder of how you can get in touch with us. Do you have a question about investing or what's driving the markets? Our guests are eager to hear what's on your mind, so send us your questions.
There are two ways you can get in touch with us.
You can send us an email anytime at moneytalklive@td.com or you can use the question box right below the screen here on WebBroker. Just write in your question and hit send.
We'll see if one of our guests can get you the answer right here at MoneyTalk Live.
We are back with Nicole Ewing, take your questions about tax and estate planning.
This one just came in before the show began.
You for this one. I have a grandson who will be going off to college in the United States in August for the first time. Could you please talk about what I need to know about making withdrawals from the RESP has set up for him and how to do them? Thanks, Don. Thank you for the question, Don.
>> Congratulations to your grandson.
The rules are not that different between a university in Canada and the University in the US. So if you are using or accessing the educational assistance payments, and there is, in Canada, a list of universities and colleges that it needs to be on a designated list of qualify that.
In the US, the rules are different. It does not need to be on that list but it does need to be a program that has 13 consecutive weeks, or university program, three weeks. I would recommend, the government of Canada has excellent resources on this in terms of what needs to be done, in what order and specifically for foreign universities. You can access that on the Canada.ca website, it has very clear information. Generally, the rules will be terribly different for your grandson attending university out of the country than it would be in the country.
>> Interesting set. Get to know and thanks for sending in that question, Don. Another question here for you. Someone says, I know how to donate securities to a charitable organization.
I understand the advantages of donating securities rather than cash. What I need to know is how to word it in my will the directions to my executor and accountant.
I have the impression that the CRA is fussy about this.
Would you devote a program to this? Thank you, Elizabeth.
>> It's a great question. Truly, working with a lawyer who has expertise in estate planning and can ensure that your will is drafted in an effective way is the best way of doing this but let's talk about some of the considerations.
When you make a gift in your will, there are a few different ways that you can structure that. You could, for example, say that you want a particular amount to go to charity. You could indicate that you want a formula to be used if you're trying to offset, for example, taxes that would otherwise be due. You will want to ensure that your executor has the authority to exercise some discretion around which assets are sold and so if you want those to be securities with gains on them, I would flag that if I were drafting this document, I would be slagging it and turning my executor's eye to that to say, when you are making charitable bequests or donations, be sure to do this in the most tax effective manner and to the extent I have any securities with accrued gains, they should be considered for this purpose. But when it comes to ensuring their maximum effectiveness is to really give your executor the authority and power and discretion to make some decisions. For example, when a bequest is made by and estate, the rule will deem that gift to have been made at the time that the charity receives that gift as opposed to on the date of death of the individual.
Now, provided that they estate qualifies as a graduated rate estate, and this is something that your executor would need to ensure to make the election that it would be treated as that, that's generally a 36 month period where the graduated rate exists, graduated rate estate exists and the bequest made during that time from the estate, there is some flex ability here.
It can either be used to offset taxes in that year, so the credit can be used for current taxes, it can be used for an earlier year of the graduated rate estate or it can be used to offset taxes the last two years of the deceased taxpayer and there is some flex ability there. That can be allocated. The credit can be allocated to maximize the tax savings in that instant.
I would suggest that this is really part of an overall giving strategy that we should be thinking about.
There might be even more effective ways of maximizing that gift that you are making in your will and working with a professional that's familiar with not only estate planning but also with the tax implications there is going to be critical.
There is some nuance around we can't give too much flexibility or too much decision-making to the or leave too much up to the executor to make a decision about where and how much of the donation will be made because it isn't really a charitable donation of the individual, did they actually make that? There are some nuances around that but work with a professional and really look at how you can maximize that gift but building in some flex ability at the same time.
>> A lot there on that one. Another great question. Thank you for that one, Elizabeth.
Another question for you here. Someone says, if I incurred a capital gain prior to June 25, 2023, and I produce a capital gain after June 25 of $250,000, with the inclusion rate at 50% and 60% 66% over $250,000?
>> This year, we have two different periods that we need to think about what we are looking at capital gains and losses. So pre-, so up until June 24, we have the rules that we have all known to come and love to the extent that again is realized on or after June 25, that's the second period.
It's the net capital gain, if there is net capital gain in that second period, it would have the full $250,000 lower inclusion rate applicable, sorry, the lower capital gain inclusion rate would be applicable to that $250,000 threshold.
Afterwards, you would go up to 66.67% but there are two periods for this year and it's not prorated. The $250,000 included at the lower amount is not prorated for 2024. 2025, different story, but this year, as long as, be careful just when it comes to your losses that might be realized because you might be offsetting them against gains from the earlier period. If you realized losses in the first period, it's your net capital gain again for the secondary period.
So there are some nuances to the transitional rules but there is no prorating of the $250,000 threshold for 2024.
>> That's another situation where if you are unclear, sit down with someone and have a chat.
>> This is not tax advice. You would want to get that from your individual advisor who can look at your personal circumstances and make sure they are taking into consideration all of the factors.
>> Another question for you here about wills. I have two children and wish to will them one third each and then one third to charity. How am I going to be taxed?
>> The opportunity to give to our will.
That donation tax credit can be used either by your state or by your previous tax years, as we just discussed. There some flex ability, that your executor can allocate. It's interesting when we think about making these decisions about 1/3 is that pretax, is that after-tax? If you have the opportunity to make a donation in a really tax effective way, for example, donating securities, we don't have to pay capital gains tax on that we get the full benefit of the tax credit that we could use against different income, making sure that you are specific and clear in your will about what entitlement the charity is actually going to have, if it's a specific dollar amount, if it's an after-tax amount versus a pretax amount, is there any flexibility by your executor and how those decisions are made?
Because, as a beneficiary of your estate, and charity will have a right to challenge decisions that are made, including decisions in terms of whether or not the estate was maximize, whether or not the values were realized by your executor in a way that they deem to be appropriate and so again, and advisor in this area who specializes in estate planning can give you insight on how to structure things in the way that you get the result you want to not potentially leading to some unfortunate litigation with your estate when you are trying to do something so wonderful as make a charitable donation to a charity of your choice. Doing it in a way that it's clear and that leaves no opportunity for there to be disputes is important.
>> Hadn't thought about that angle in terms of charitable giving. Fascinating stuff. We will get back your questions for Nicole Ewing on tax and estate planning in just a moment's time.
As always, make sure you do your own research before making any investment decisions.
And a reminder that you get touched us at any time.
Do you have a question about investing or what's driving the markets?
Our guests are eager to hear what's on your mind, so send us your questions.
There are two ways you can get in touch with us.
You can send us an email anytime at moneytalklive@td.com or you can use the question box right below the screen here on WebBroker. Just write in your question and hit send.
We'll see if one of our guests can get you the answer right here at MoneyTalk Live.
[music] We are having a look at TD's Advanced Dashboard, a platform designed for active traders available through TD Direct Investing.
This is the heat map function, a nice view of the market movers. We will dig into the TSX 60 here, we are screening by price and volume. The composite index is up about half percent from its first trading day of the week.
Where are we getting the bump from? Energy space, modest green on the screen from the likes of Enbridge or Suncor.
Trapp, TRP. TC Energy I think is what they call them these days.
In the financial space, some life coast to the upside along with some of the banks. I stand up to the downside is Shopify in the technology basket, down about 2.5%.
South of the border, after a bumpy ride last week for Wall Street, you got the S&P 500 showing strength, we are going to narrow down to 100 socks, it's easier on my eyes I find. Nvidia, the big chipmaker, it's been the centre of so much activity for the past year and 1/2, gaining about 3%. Tesla up about 4% and some other tech plays, whether it's Google or Meta or AMD showing a bit of strength.
We told you earlier in the show about Verizon, the street clearly not pleased with the latest earnings report. Verizon is down to the tune of about 6%.
We are back with Nicole Ewing from TD Wealth. Let's take more of your questions.
Does power of attorney mean different things in different provinces, for example Québec?
>> That's a really good question.
So when we think about power of attorney, it's essentially a substitute decision-making document. This is giving somebody else the authority to make decisions on your behalf. There are different ways that can be structured. In Ontario, for example, you can have a limited power of attorney for a specific item or property or event that you want that to be effective for. You can have a, you want to ensure, if it's a financial planning or power of attorney, that allows for it to be continued after incapacitated, does not become an effective, you can have spraying powers of attorney that comes into play in certain times, power of attorney for personal care, allowing someone to make your medical decisions for you, that's all the terminology in Ontario. Each of the other provinces also has substitute decision-making documents. Different terminology may be used and there might be some differences in terms of what decisions can be made. We would have representation agreements, for example, in BC where it allows you to make some bill payment and financial decisions as well as the medical and personal care decisions.
In Québec, we have a mandate that again gives certain authority to people to act.
It would be important to ensure that the document you have is validated and executed properly in the province that you are currently in. There are some differences there are so it might require one signature versus two signatures for witnesses. So being sure that it is valid in your current province. The good news is to the extent it was validly executed in the province that it was drafted in, it's going to be accepted in all of the other provinces as an agreement between all the provinces allows that to happen but I would encourage you to update it and make sure that is recognized by the people who are going to be seeing it most often. If you go into a bank in Alberta, you want the document to look at the way that they expect it to look. Similarly, in Québec, you want that language to match what they are used to seeing just for convenience.
>> Okay. Another question from the audience for Nicole. Someone says, I'm considering gifting money to one of my children to help with the home purchase.
They said they would like to try to pay me back eventually.
Does it make sense from a tax perspective to consider this alone?
>> Good question.
We really need to be clear on what the things are gifts or loans. Depending on how you are helping support them during this event, whether or not you are, if you have gifted them money and they are now declaring to the financial institution where they might have financial arrangements that this was a gift, that's relevant as well. You cannot decide whether it was a gift or loan after the fact. Up front, you want to make that decision. From a tax perspective, there will be tax implications about whether or not there is going to be interest charged on the loan.
Whether or not the money that was borrowed by your child is used for their personal residence or whether to use for recreational property or property that earns income, the implications on whether or not they would be able to claim that interest payment will depend on whether it's being used towards personal property or a business property. You will want to know after the fact, you will want to be in a position after the fact to say whether something was a gift or loan particularly for-- where you have spouses involved, if they are going to be bringing in a debt to a marriage versus bringing in an asset, those implications are going to be different from a family law perspective, whether or not they need to share the money.
All to say, get this in writing. Let's make sure that we know exactly what the gift was. There was a story recently about an individual who was suing his ex-girlfriend, took her to a tribunal to say, those concert tickets were not a gift, they were alone and you need to pay me back in the tribunal agreed with him and said yes, based on the facts of that case, this is not intended to be a gift.
Some other parts were but that was, it slacked, alone. It would've been much easier if they had in advance written that out and indicated what their intentions were. Whether that's in an email, and napkin over a small thing, for a large purchase like a mortgage on a large property for a home, let's make sure we know whether this is a gift or a loan and make those intentions clear. And there's more than just tax considerations to keep in mind for that.
>> Concert tickets?!
>> I know!
>> I have another viewers saying, I have another commitment right now and cannot attend to watch the show.
Will there be a transcript available and where will I find it?
Of course, you can find full episodes and transcripts in both English and French in the MoneyTalk Live archive page on our website. Just go to moneytalkgo.com.
You can catch up with the program after you are clear of your commitment there.
>> I noticed this morning that a viewer had sent in a question directly to my inbox. I caution, please don't do that only because I'm not terribly good at going through and seeing those. It's just not the way that I manage my inbox so I might miss it and I don't want our viewers to be sending a question and for me to not be seeing it so I will give a response back to that but if those questions come straight into MoneyTalk, you will ensure that they get to me versus me.
>> A whole team of people sees them, working around the clock.
>> I will see it, we just want to ensure that it is answered efficiently.
>> A few more eyes on MoneyTalk.
I saw an article recently about someone who was not able to receive a monetary gift from their parents because they had power of attorney.
What's going on there?
>> That was a really interesting case.
So when you have a power of attorney document, it will outline the powers that the individual has and, essentially, they are required to be acting on your best interest. They must be making decisions that are for the benefit of the person who has granted that authority and they can not do self-dealing, they cannot give themselves gifts or sell themselves property or transfer your assets into their name, and there is legislation in each province that explicitly says, refers to gifts and so in certain provinces, it says very clearly that the person who is acting under a power of attorney is permitted to make gifts to other family members or others that the individual otherwise would have given gifts to provided there is a history of that or it's generally known that that is in line with what the individual did before they lost capacity. However!
The individual who is acting as power of attorney, they do not benefit from that rule. Even if every year mom gave you $10,000 as a Christmas gift and you have been counting on that for the last 20 years, you do not have the authority to do that unless the document specifically says that you are able to give yourself those gifts. And so that's what happened in that case is, essentially, the parent had previously indicated that they wanted their child to have this $250,000, the child transferred it to themselves and it was reversed. It was deemed that they did not have the authority to do that because the documentation did not specifically say that they had the authority to do that.
There was no allegation of any wrongdoing on the part of the individual. There was no concern… >> They just had not crossed their Ts and dotted their Is.
>> Exactly. The language in those documents, this is where professionals can ensure that your documents will be your needs. If you are a big gift or and you want to continue doing that after you've lost capacity, make sure your documentation explicitly says that the person who is doing the job for you can also benefit from those gifts.
>> Important stuff. I learned a lot today, as always, every time you're on.
Before we let you go, as we said at the top the show, we are this summer, we have a lot of time on our hands. Maybe we want to think about personal finances.
>> I would encourage you. I'm going to do it. I have carved out time for myself, I have my time off and anything that my spouse has been saying to me recently about, what about this and that and are we gonna do renovations?
I have said, those decisions are going to be made in August when I have time to be thinking about it. I'm going to turn my mind to it and really make that list of what I need to be thinking about, make those commitments, plan it with the renovations might be, whether I'm going to do this one room at a time.
It's a really ideal time to sit down, reflect and see whether you are on track, off-track and just when you are not receiving all of the other emails that you might be getting, take the time to send the ones that are important and get your updates from your advisor, your lawyer, accountant and feel good heading into the rest of the year.
>> Another week off in August, my wife wants the front door of the house painted a different colour. I'm gonna tell her, there is a process here. I'm gonna look at the budget, see if we can afford a can of paint. I'll get back to you.
Nicole Ewing told me there is a process.
He's a big fan of yours to so she might listen. Always a pleasure to have you here. Always great when you come and join us in person. Look forward to the next time.
>> Me too. Thanks for having me.
>> Our thanks to Nicole Ewing, Dir. for tax and estate planning with TD Wealth.
As always, make sure you do your own research before making any investment decisions.
if we did not have time to get your question today, we will aim to get into future shows. Stay tuned for tomorrow show.
Leslie Preston, Senior economist with TD will be our guest giving us a preview of the Bank of Canada rate decision coming on Wednesday. We will also take your questions about the economy and interest rates.
You can get a head start with all his questions. Just email moneytalklive@td.com.
That's all the time we have for the show today. Thanks for watching. We will see you tomorrow.
[theme music]
Every day, I'll be joined by guests from across TD, many of whom you'll only see here.
We're going to take you through what's moving the markets and answer your questions about investing.
Coming up on today's show, we will discuss what president Joe Biden dropping out of the presidential race means for the markets. TD asset management Christian Medeiros weighs in. Later, TD Wealth's Nicole Ewing is going to take us through how to do a midyear checkup of your personal finance situation. And in today's WebBroker education segment, Bryan Rogers will show us how to set up alerts while using the platform. Here's how to get in touch with us. Just email moneytalklive@td.com or fill out the viewer response box under the video player on WebBroker.
Before we get to all that and our guest of the day, let's get you an update on the markets. First trading day of the week.
Some green on the screen on Banwell streets. 120 points for the TSX Composite Index, you're up about half percent.
Among the notable movers include Sleep Country. Fairfax Financial buying Sleep Country for roughly $1.7 billion, has those shares moving higher to the tune of 27 1/2%.
I want to check in on Air Canada. Of course, that global IT outage, on Friday was a spotty day, it's been hitting the airline. Air Canada is now down 4% on today's session, $16.32. South of the border, let's check in on the S&P 500.
It was a bumpy week last week. We are making gains today but they are modest. 31 points to the upside are about half a percent. Tech heavy NASDAQ, how is it bearing against the broader market?
The NASDAQ is up about two thirds of a percent. Verizon out with their latest earnings and this street is clearly not impressed. $39.02 on Verizon, you're down a little more than 6%. And that's your market update.
Got another twist in the race for the White House, incumbent Joe Biden dropping out of the running. Now here to discuss what it could mean for the markets and the economy, Christian Medeiros, VPN portfolio manager for asset allocation at TD asset management. People know what's happened up till now with Joe Biden saying it, I will not seek reelection. What happens next?
>> The Democratic National convention on August 19, they need to be elected by the majority of delegates to be the nominee for the party.
And then they will make it onto the ballot. With Biden stepping down, those delegates are no longer pledged to him.
They become available to anybody else. But what happened is a Biden endorsed Kamala Harris and many people in the party have endorsed her, we are increasingly seeing state delegations followed behind her and others that may have challenged her, such as prominent governors like Gretchen Whitmer or Newsom have decided to run in the convention, so it seems like Kamala Harris will run the delegates on the convention day.
That seems the likely path forward. We saw the month until then. It's possible the Democratic party might want a more open convention with other challenging her or many primary. But those are less likely.
>> If we end up in a situation where it's Kamala Harris, what about policy positions? Would she take a different track than Joe Biden has?
>> It's very likely that she's going to have a status quo and be very similar in policy and priorities to Joe Biden. It's unlikely she would run on a different platform at this point. If she were to win the election, it's very likely that given the congressional map, they would have large majorities in either the House or Senate. It would likely be split. Even if she were to have different policies she would be unlikely to pass them.
>> Let's talk with that. You brought up an important point. We have been so, and for good reason, focused on the presidential contest. Now you have Pres. Biden saying he will not run for reelection, endorsing Harris. Come November, there will be a presidential election but also Congress.
This is pretty key.
>> I think it's one of the most important things to consider because if you control Congress, you can pass legislation. If you don't, it's tougher for the president.
In this case, one big thing that forced Biden to resign was not only his pulling looking back for himself in key swing states, it was also looking challenging for people down the ballot in Key House and Senate races which are pivotal for Democrats in this election cycles that put a lot of pressure on him to resign.
Now that he's off the ticket, it looks a lot better for those congressional candidates in the house and Senate races because Kamala Harris will be better at turning out the vote and she doesn't have the same baggage about old age and concerns a lot of others had behind Pres.
Biden. As a result, we might see better turnover Democrats in those key races which means it's more likely to have a split Congress, even if Trump won the election, it was looking like a sweet before but now is what Congress is back is a possibility which means he's not going to be able to do as much as he would've liked to do if he had swept Congress.
>> Let's talk about former Pres. Trump. We have been so focused on the Democrat side with all these breaking developments, what are the implications for his policy omissions? We know he has laid out certain things that he would like to put into play.
>> On tax, the big tax cuts he passed back in 2017, they need to be extended or made permanent in this presidential cycle.
It is quite possible that if he does not have a sweep of both the House and the Senate, it will be a lot harder for him to extend those tax cuts. As a result, we might actually have some of those cuts expire. It's not a done deal.
On immigration, there a lot of short-term changes he could make. Lastly, when it comes to repealing or undoing some of the Biden air legislation like the inflation reduction act, things he is on climate, if Trump is unable to win control of Congress, he will not be able to repeal some of that Biden air legislation.
>> Obviously, it's a long road to November, a lot happened just in the past week.
What are investors supposed to think about this to Mark what are the applications about the markets?
>> The markets word feeling confident in a Trump win and sweep of Congress last week.
Not too much has changed.
I think what it shows that we should not be betting the farm for months out from an election.
Already in July, we have three or four big surprises, poor debate performance, an assassination attempt, Biden dropping out of the race, we have to be opened to other possibilities. Biden was constrained in his path to winning you and the vast majority of Americans thought he was too old and incapable of taking office. Now we're going to have a new candidate who will not have that baggage.
It's possible Democrats could do much better than people expect. Democrats have a fighting chance and is going to make the election much more interesting going into November.
>> That was Christian Medeiros, VPN portfolio manager for asset allocation at TD Asset Management.
Right now, let's get you updated on the top stories in the world of business and take a look at how the markets are trading.
Canadians will be watching our central bank this week to see if Gov. Tiff Macklem delivers back to back rate cuts. A pullback and headline inflation and soft consumer spending are increasing the odds of an interest rate cuts in the Bank of Canada. If you took a look at last week's inflation report, it did show a lack of progress on the bank's core measures.
Got shares of Bank of America in the spotlight.
According to regulatory filings, Warren Buffet's Berkshire Hathaway has trimmed its stake in the Wall Street giant. That's after Bank of America shareS rallied more than 25% year-to-date. While Berkshire sold almost 1.5 billion in bank of America shares over several days last week, it is still there second-largest holding behind Apple.
Last week's far-reaching IT outage still weighing on a major US airline.
We will start with CrowdStrike, the IT company and their update at the heart of what happened to Microsoft computers around the world. Delta has cancelled more than 4600 flights over the weekend.
Delta is down to the tune of about 2% today.
Quick check in on the markets. First trading day of the week. Some green on the screen on band Wall Street. 124 points to the upside, about half a percent for the TSX Composite Index.
The S&P 500, after a bit of a choppy ride last week, is showing a bit of strength today. It's of 31 points were little more than half percent.
While summer is a good time for getting outdoors and enjoying the weather, it can also be a good time for a little midyear review of your personal finance situation.
Joining us now with some of the things you may want to keep in mind is Nicole Ewing, Dir. for tax and estate planning with TD Wealth.
>> Thank you. Great to be here.
>> People define themselves with a little bit of time on their hands. Maybe go away somewhere and you've got a computer with you, maybe you want to start thinking about a few things. Where do you want to start? Maybe our budget?
>> Sure. That's where we should reign things and or make changes immediately if we are offsite. Budget is a good place to start. Hopefully you spent the beginning part of the year putting together what you expected to be spending, what you expected to be saving and making some decisions about discretionary versus nondiscretionary spending. Let's reflect on it, see whether or not we are in line with that spending and may be why we are not if we are not.
Anything can happen, right? We are not just stagnant through the first number of months of the year. Life may have changed as well. We may have had a job change, a lifestyle change, perhaps our rent or mortgage amounts have changed as well.
Use that information and bring it into your budget, make the appropriate changes were necessary and give yourself a pat on the back if you are otherwise on track.
>> If you or otherwise on track. A pat on the back to anyone out there who was on track because it's hard in the summer. You start having a time, maybe start spending more than you should. Checking your credit score, why is this important?
>> Again, I get these notifications that I need to go back and check and check and check and frankly, if you are not making a point of going in and checking, you may not be aware of things that happened that you either intended to happen or that may not have been you're doing but might be a mistake. If there is something that's wrong, go in, make sure you are identifying that, making the appropriate actions on that.
It has increased or decreased, this may give you an opportunity to reflect on some of the things that your credit score influences.
For example, maybe you have some debt, maybe you have some financing arrangements that if your credit score has increased, you may have the opportunity to renegotiate those in a more favourable way. If your credit score has taken a hit, it might give you a good chance to reflect on why. Maybe something went off the rails that needs your attention.
>> We have taken a look at our budget and credit score to see where we stand there.
Some of us, I like to do this. I sent monthly contributions for certain things and I said it and I forget it. Every once in a while, maybe you need to think about it.
Un-forget it.
>> Look back at your goals, see if things of change, maybe your contributions are impacted by that.
Maybe you have the opportunity to increase that a little bit more than you had anticipated to be able to but also just to make sure that you are on track for the plan, we don't want to be coming in year end and quickly trying to make changes.
We have TFSAs, RRSPs, first home savings accounts, RESPs, all of these have the opportunities for us to make contributions. Be aware of what they are and allocate accordingly.
>> Now, obviously, through the course of the year, when you talk about getting some information together, I've had several friends and colleagues who have done various walks or rides for charity, put some money behind it, good causes, and then a receipt lands in my Gmail and it's just sitting there and I'm not gonna go looking for it until January or February or March,. Is it time guarantees together?
>> Get your receipts together, not just charitable but all of your receipts.
Anything you are needing to rely on next year for your taxes. I was it just that when it comes to charitable giving, it's a really good idea to have a plan for that, a strategic approach to your charitable giving. If that means helping out friends this year and giving 20 here in 20 there, you're going to need to accumulate those who are in a position to defend your prove that you have made those contributions.
Maybe you want to think as well about changing your giving strategy said that you are ensuring you have the biggest bang for your buck and your contributing in the way that you want to. Maybe you're maximizing things, looking at your gains, your securities that may have gains on them. There could be an opportunity to make a more impactful gift than you otherwise would be able to make.
You need to be able to defend your position to CRA next year, not only for your charitable donations but for all of the spending. Maybe you're at the cottage and doing some work that will allow you to increase the adjusted cost base of that property. Again, you will need to be able to demonstrate that down the road. You may not sell for another 10 years, make sure you know what you're doing with the receipts, have a plan and a way of ensuring that you know where they are when you need them.
>> Interesting discussion there are tax obligations. We might turn off parts of our brains during summer vacation, the tax machine never goes away.
Reevaluate maybe withholding taxes, tax loss harvesting?
>> Yes. Withholding taxes, if you are having taxes withheld on employment income, for example, you have either changed your life circumstances, you have the opportunity to ask your employer to make changes to those withholdings you can better maximize the use of those funds.
For tax loss harvesting, this is something that should not just be done at the end of the year. We need a strategy around that and we need to understand what we are doing. Certainly this year with the change in the capital gains inclusion rate, having these two different periods where taxes are going to need to be thought about, tax loss harvesting might look a little bit different to people in 2024 than it has previously and the way that is going to look in 2025. Certainly, if you are doing any investing through Corporation, there's a capital dividend account at play, pulling a gains tax free from the capital dividend account and making your tax loss harvesting part of your strategy.
>> This is a big one, estate plans. At maybe there has been some big news, weddings and aunts, babies and aunts, moving across the country. All of these things need our attention. Making sure that we have the appropriate documentation in place to ensure that if something happens to us and we find ourselves incapacitated or there's a death in our family that we have the appropriate documents to be able to go out there and do what we need to do to administer those affairs effectively and things change.
The law, unfortunately, has not changed to significantly in that regard.
In the capital gains tax, we expect taxes on death will be higher than they would've been previously because we are deemed to have disposed of all of our assets, we have a capital gains bill so maybe that estate planning in terms of planning for any taxes on death would need to be updated this year. If your personal circumstances have changed, they should be reflected in your documentation.
>> All important things to turn our minds to over downtime in the next couple of weeks over the summer. A great start to the program. We'll get your questions about tax and estate planning for Nicole Ewing in just a moment's time.
And a reminder that you can get in touch with us any time.
Just email moneytalklive@td.com or fill out the viewer response box under the video player on WebBroker.
Now, let's get our educational segment of the day.
Alright. If you want to stay up-to-date with what's happening in the markets, what progress tools which can help. Bryan Rogers, Senior client education instructor with TD Direct Investing joins us that was more. Great to see you. Let's talk about using alerts.
>> Alright, Greg, we are also busy these days. Any time we can work smarter and not harder, we will take advantage of that. So what I want to do is show people and web broker, there are some interesting tools you can use for alerts if you want to stay up to speed on market news and even stock news and things like that as well.
If we jump over to a broker, the way I think about this, if we go to research, news and commentary, it's pretty smart. On the top right hand side, because I am in news and alerts, that means it's going to be related to getting updates on current commentary and news and so on. If I click there, I click on set alerts, there is a number of ways you can get market gainers and losers as an example, you can look at this from a higher level basis on the index, you can set a frequency if you want to have it before the market opens or maybe afterwards, whatever your preference is there, you can look at prices going up or down. This is more of an overview. If you go up to the second tab, there's news and research. You can now enter in keywords. There's a lot of news about the election right now. Joe Biden taking back his candidacy. If you have a favourite report, you can set it that way. All this is going to do is is going to let you receive an email on a daily basis or whatever you want to set it as or you can get, in many cases, push notifications to your phone as well.
>> That covers the big macro themes and there are plenty of them to cover these days. What about individual holdings, whether peace talks or something else, you want to keep up-to-date on that stuff, how do we do that?
>> Let's take a look at that.
If we jump back into the platform, I'm going to close this. If I go to research and then click on stocks, the same place you would go if you are looking to pull up any stock as a symbol. I got Home Depot appear right now. Really simple. Same thing. Ewart is going to look for set alerts.
It's almost in the middle here.
You can click set alerts. It's amazing, the stuff you can do! Whether the price drops below a certain price or rises above, you can click the little radio button here to set whatever you want to look for and then you brought news, ratings, analyst readings that have changed.
There is just a huge plethora of information you can get, possibly even too much, but one thing you can do is it's almost setting up your own personal virtual assistant that can provide you all that information.
>> Great stuff as always, Bryan. I'm going to say before I let you go, I am going to set an alert for your summer beard there.
I tried last summer, I came back from vacation, you came back with a great beard.
It's a hard time of year to do it. But we will see how long your conviction holds.
Thanks for that, Bryan.
>> Thank you. Take care.
>> Bryan Rogers, Senior client education instructor with TD Direct Investing. For more information on educational resources, visit the education Centre on what broker or use this QR code to navigate to our social media page. Before you back to questions about tax and estate planning for Nicole Ewing, a reminder of how you can get in touch with us. Do you have a question about investing or what's driving the markets? Our guests are eager to hear what's on your mind, so send us your questions.
There are two ways you can get in touch with us.
You can send us an email anytime at moneytalklive@td.com or you can use the question box right below the screen here on WebBroker. Just write in your question and hit send.
We'll see if one of our guests can get you the answer right here at MoneyTalk Live.
We are back with Nicole Ewing, take your questions about tax and estate planning.
This one just came in before the show began.
You for this one. I have a grandson who will be going off to college in the United States in August for the first time. Could you please talk about what I need to know about making withdrawals from the RESP has set up for him and how to do them? Thanks, Don. Thank you for the question, Don.
>> Congratulations to your grandson.
The rules are not that different between a university in Canada and the University in the US. So if you are using or accessing the educational assistance payments, and there is, in Canada, a list of universities and colleges that it needs to be on a designated list of qualify that.
In the US, the rules are different. It does not need to be on that list but it does need to be a program that has 13 consecutive weeks, or university program, three weeks. I would recommend, the government of Canada has excellent resources on this in terms of what needs to be done, in what order and specifically for foreign universities. You can access that on the Canada.ca website, it has very clear information. Generally, the rules will be terribly different for your grandson attending university out of the country than it would be in the country.
>> Interesting set. Get to know and thanks for sending in that question, Don. Another question here for you. Someone says, I know how to donate securities to a charitable organization.
I understand the advantages of donating securities rather than cash. What I need to know is how to word it in my will the directions to my executor and accountant.
I have the impression that the CRA is fussy about this.
Would you devote a program to this? Thank you, Elizabeth.
>> It's a great question. Truly, working with a lawyer who has expertise in estate planning and can ensure that your will is drafted in an effective way is the best way of doing this but let's talk about some of the considerations.
When you make a gift in your will, there are a few different ways that you can structure that. You could, for example, say that you want a particular amount to go to charity. You could indicate that you want a formula to be used if you're trying to offset, for example, taxes that would otherwise be due. You will want to ensure that your executor has the authority to exercise some discretion around which assets are sold and so if you want those to be securities with gains on them, I would flag that if I were drafting this document, I would be slagging it and turning my executor's eye to that to say, when you are making charitable bequests or donations, be sure to do this in the most tax effective manner and to the extent I have any securities with accrued gains, they should be considered for this purpose. But when it comes to ensuring their maximum effectiveness is to really give your executor the authority and power and discretion to make some decisions. For example, when a bequest is made by and estate, the rule will deem that gift to have been made at the time that the charity receives that gift as opposed to on the date of death of the individual.
Now, provided that they estate qualifies as a graduated rate estate, and this is something that your executor would need to ensure to make the election that it would be treated as that, that's generally a 36 month period where the graduated rate exists, graduated rate estate exists and the bequest made during that time from the estate, there is some flex ability here.
It can either be used to offset taxes in that year, so the credit can be used for current taxes, it can be used for an earlier year of the graduated rate estate or it can be used to offset taxes the last two years of the deceased taxpayer and there is some flex ability there. That can be allocated. The credit can be allocated to maximize the tax savings in that instant.
I would suggest that this is really part of an overall giving strategy that we should be thinking about.
There might be even more effective ways of maximizing that gift that you are making in your will and working with a professional that's familiar with not only estate planning but also with the tax implications there is going to be critical.
There is some nuance around we can't give too much flexibility or too much decision-making to the or leave too much up to the executor to make a decision about where and how much of the donation will be made because it isn't really a charitable donation of the individual, did they actually make that? There are some nuances around that but work with a professional and really look at how you can maximize that gift but building in some flex ability at the same time.
>> A lot there on that one. Another great question. Thank you for that one, Elizabeth.
Another question for you here. Someone says, if I incurred a capital gain prior to June 25, 2023, and I produce a capital gain after June 25 of $250,000, with the inclusion rate at 50% and 60% 66% over $250,000?
>> This year, we have two different periods that we need to think about what we are looking at capital gains and losses. So pre-, so up until June 24, we have the rules that we have all known to come and love to the extent that again is realized on or after June 25, that's the second period.
It's the net capital gain, if there is net capital gain in that second period, it would have the full $250,000 lower inclusion rate applicable, sorry, the lower capital gain inclusion rate would be applicable to that $250,000 threshold.
Afterwards, you would go up to 66.67% but there are two periods for this year and it's not prorated. The $250,000 included at the lower amount is not prorated for 2024. 2025, different story, but this year, as long as, be careful just when it comes to your losses that might be realized because you might be offsetting them against gains from the earlier period. If you realized losses in the first period, it's your net capital gain again for the secondary period.
So there are some nuances to the transitional rules but there is no prorating of the $250,000 threshold for 2024.
>> That's another situation where if you are unclear, sit down with someone and have a chat.
>> This is not tax advice. You would want to get that from your individual advisor who can look at your personal circumstances and make sure they are taking into consideration all of the factors.
>> Another question for you here about wills. I have two children and wish to will them one third each and then one third to charity. How am I going to be taxed?
>> The opportunity to give to our will.
That donation tax credit can be used either by your state or by your previous tax years, as we just discussed. There some flex ability, that your executor can allocate. It's interesting when we think about making these decisions about 1/3 is that pretax, is that after-tax? If you have the opportunity to make a donation in a really tax effective way, for example, donating securities, we don't have to pay capital gains tax on that we get the full benefit of the tax credit that we could use against different income, making sure that you are specific and clear in your will about what entitlement the charity is actually going to have, if it's a specific dollar amount, if it's an after-tax amount versus a pretax amount, is there any flexibility by your executor and how those decisions are made?
Because, as a beneficiary of your estate, and charity will have a right to challenge decisions that are made, including decisions in terms of whether or not the estate was maximize, whether or not the values were realized by your executor in a way that they deem to be appropriate and so again, and advisor in this area who specializes in estate planning can give you insight on how to structure things in the way that you get the result you want to not potentially leading to some unfortunate litigation with your estate when you are trying to do something so wonderful as make a charitable donation to a charity of your choice. Doing it in a way that it's clear and that leaves no opportunity for there to be disputes is important.
>> Hadn't thought about that angle in terms of charitable giving. Fascinating stuff. We will get back your questions for Nicole Ewing on tax and estate planning in just a moment's time.
As always, make sure you do your own research before making any investment decisions.
And a reminder that you get touched us at any time.
Do you have a question about investing or what's driving the markets?
Our guests are eager to hear what's on your mind, so send us your questions.
There are two ways you can get in touch with us.
You can send us an email anytime at moneytalklive@td.com or you can use the question box right below the screen here on WebBroker. Just write in your question and hit send.
We'll see if one of our guests can get you the answer right here at MoneyTalk Live.
[music] We are having a look at TD's Advanced Dashboard, a platform designed for active traders available through TD Direct Investing.
This is the heat map function, a nice view of the market movers. We will dig into the TSX 60 here, we are screening by price and volume. The composite index is up about half percent from its first trading day of the week.
Where are we getting the bump from? Energy space, modest green on the screen from the likes of Enbridge or Suncor.
Trapp, TRP. TC Energy I think is what they call them these days.
In the financial space, some life coast to the upside along with some of the banks. I stand up to the downside is Shopify in the technology basket, down about 2.5%.
South of the border, after a bumpy ride last week for Wall Street, you got the S&P 500 showing strength, we are going to narrow down to 100 socks, it's easier on my eyes I find. Nvidia, the big chipmaker, it's been the centre of so much activity for the past year and 1/2, gaining about 3%. Tesla up about 4% and some other tech plays, whether it's Google or Meta or AMD showing a bit of strength.
We told you earlier in the show about Verizon, the street clearly not pleased with the latest earnings report. Verizon is down to the tune of about 6%.
We are back with Nicole Ewing from TD Wealth. Let's take more of your questions.
Does power of attorney mean different things in different provinces, for example Québec?
>> That's a really good question.
So when we think about power of attorney, it's essentially a substitute decision-making document. This is giving somebody else the authority to make decisions on your behalf. There are different ways that can be structured. In Ontario, for example, you can have a limited power of attorney for a specific item or property or event that you want that to be effective for. You can have a, you want to ensure, if it's a financial planning or power of attorney, that allows for it to be continued after incapacitated, does not become an effective, you can have spraying powers of attorney that comes into play in certain times, power of attorney for personal care, allowing someone to make your medical decisions for you, that's all the terminology in Ontario. Each of the other provinces also has substitute decision-making documents. Different terminology may be used and there might be some differences in terms of what decisions can be made. We would have representation agreements, for example, in BC where it allows you to make some bill payment and financial decisions as well as the medical and personal care decisions.
In Québec, we have a mandate that again gives certain authority to people to act.
It would be important to ensure that the document you have is validated and executed properly in the province that you are currently in. There are some differences there are so it might require one signature versus two signatures for witnesses. So being sure that it is valid in your current province. The good news is to the extent it was validly executed in the province that it was drafted in, it's going to be accepted in all of the other provinces as an agreement between all the provinces allows that to happen but I would encourage you to update it and make sure that is recognized by the people who are going to be seeing it most often. If you go into a bank in Alberta, you want the document to look at the way that they expect it to look. Similarly, in Québec, you want that language to match what they are used to seeing just for convenience.
>> Okay. Another question from the audience for Nicole. Someone says, I'm considering gifting money to one of my children to help with the home purchase.
They said they would like to try to pay me back eventually.
Does it make sense from a tax perspective to consider this alone?
>> Good question.
We really need to be clear on what the things are gifts or loans. Depending on how you are helping support them during this event, whether or not you are, if you have gifted them money and they are now declaring to the financial institution where they might have financial arrangements that this was a gift, that's relevant as well. You cannot decide whether it was a gift or loan after the fact. Up front, you want to make that decision. From a tax perspective, there will be tax implications about whether or not there is going to be interest charged on the loan.
Whether or not the money that was borrowed by your child is used for their personal residence or whether to use for recreational property or property that earns income, the implications on whether or not they would be able to claim that interest payment will depend on whether it's being used towards personal property or a business property. You will want to know after the fact, you will want to be in a position after the fact to say whether something was a gift or loan particularly for-- where you have spouses involved, if they are going to be bringing in a debt to a marriage versus bringing in an asset, those implications are going to be different from a family law perspective, whether or not they need to share the money.
All to say, get this in writing. Let's make sure that we know exactly what the gift was. There was a story recently about an individual who was suing his ex-girlfriend, took her to a tribunal to say, those concert tickets were not a gift, they were alone and you need to pay me back in the tribunal agreed with him and said yes, based on the facts of that case, this is not intended to be a gift.
Some other parts were but that was, it slacked, alone. It would've been much easier if they had in advance written that out and indicated what their intentions were. Whether that's in an email, and napkin over a small thing, for a large purchase like a mortgage on a large property for a home, let's make sure we know whether this is a gift or a loan and make those intentions clear. And there's more than just tax considerations to keep in mind for that.
>> Concert tickets?!
>> I know!
>> I have another viewers saying, I have another commitment right now and cannot attend to watch the show.
Will there be a transcript available and where will I find it?
Of course, you can find full episodes and transcripts in both English and French in the MoneyTalk Live archive page on our website. Just go to moneytalkgo.com.
You can catch up with the program after you are clear of your commitment there.
>> I noticed this morning that a viewer had sent in a question directly to my inbox. I caution, please don't do that only because I'm not terribly good at going through and seeing those. It's just not the way that I manage my inbox so I might miss it and I don't want our viewers to be sending a question and for me to not be seeing it so I will give a response back to that but if those questions come straight into MoneyTalk, you will ensure that they get to me versus me.
>> A whole team of people sees them, working around the clock.
>> I will see it, we just want to ensure that it is answered efficiently.
>> A few more eyes on MoneyTalk.
I saw an article recently about someone who was not able to receive a monetary gift from their parents because they had power of attorney.
What's going on there?
>> That was a really interesting case.
So when you have a power of attorney document, it will outline the powers that the individual has and, essentially, they are required to be acting on your best interest. They must be making decisions that are for the benefit of the person who has granted that authority and they can not do self-dealing, they cannot give themselves gifts or sell themselves property or transfer your assets into their name, and there is legislation in each province that explicitly says, refers to gifts and so in certain provinces, it says very clearly that the person who is acting under a power of attorney is permitted to make gifts to other family members or others that the individual otherwise would have given gifts to provided there is a history of that or it's generally known that that is in line with what the individual did before they lost capacity. However!
The individual who is acting as power of attorney, they do not benefit from that rule. Even if every year mom gave you $10,000 as a Christmas gift and you have been counting on that for the last 20 years, you do not have the authority to do that unless the document specifically says that you are able to give yourself those gifts. And so that's what happened in that case is, essentially, the parent had previously indicated that they wanted their child to have this $250,000, the child transferred it to themselves and it was reversed. It was deemed that they did not have the authority to do that because the documentation did not specifically say that they had the authority to do that.
There was no allegation of any wrongdoing on the part of the individual. There was no concern… >> They just had not crossed their Ts and dotted their Is.
>> Exactly. The language in those documents, this is where professionals can ensure that your documents will be your needs. If you are a big gift or and you want to continue doing that after you've lost capacity, make sure your documentation explicitly says that the person who is doing the job for you can also benefit from those gifts.
>> Important stuff. I learned a lot today, as always, every time you're on.
Before we let you go, as we said at the top the show, we are this summer, we have a lot of time on our hands. Maybe we want to think about personal finances.
>> I would encourage you. I'm going to do it. I have carved out time for myself, I have my time off and anything that my spouse has been saying to me recently about, what about this and that and are we gonna do renovations?
I have said, those decisions are going to be made in August when I have time to be thinking about it. I'm going to turn my mind to it and really make that list of what I need to be thinking about, make those commitments, plan it with the renovations might be, whether I'm going to do this one room at a time.
It's a really ideal time to sit down, reflect and see whether you are on track, off-track and just when you are not receiving all of the other emails that you might be getting, take the time to send the ones that are important and get your updates from your advisor, your lawyer, accountant and feel good heading into the rest of the year.
>> Another week off in August, my wife wants the front door of the house painted a different colour. I'm gonna tell her, there is a process here. I'm gonna look at the budget, see if we can afford a can of paint. I'll get back to you.
Nicole Ewing told me there is a process.
He's a big fan of yours to so she might listen. Always a pleasure to have you here. Always great when you come and join us in person. Look forward to the next time.
>> Me too. Thanks for having me.
>> Our thanks to Nicole Ewing, Dir. for tax and estate planning with TD Wealth.
As always, make sure you do your own research before making any investment decisions.
if we did not have time to get your question today, we will aim to get into future shows. Stay tuned for tomorrow show.
Leslie Preston, Senior economist with TD will be our guest giving us a preview of the Bank of Canada rate decision coming on Wednesday. We will also take your questions about the economy and interest rates.
You can get a head start with all his questions. Just email moneytalklive@td.com.
That's all the time we have for the show today. Thanks for watching. We will see you tomorrow.
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