Insurance Insights
Advice from Brian Poncelet, CFP

Every year accountants, tax preparers and Canadians who do their own personal taxes miss out on millions of dollars of tax refunds and credits. How can you prevent this from happening to you?

My personal story may help your family. I have two boys that were born in 1999. They were born prematurely so my wife and I basically lived at Mount Sinai Hospital for 3 months during what we thought would be the most challenging period in our lives.

Looking back, our experience at Mount Sinai pales in comparison to one day in 2003 when a doctor told us that both of our children have Autism. The mental and physical challenge was only just beginning and would stay with us probably for life.

For the next several years our family trudged along, making use of the many services that are available to special needs children in Ontario. However, like many in our situation, we became very centrally focused with the knowledge that we no longer have anything in common with our friends and their typically developing children. Moving forward to 2007, it was just by chance that my wife mentioned the boy’s diagnosis to our tax preparer and we learned of the Disability Tax Credit (DTC). After completing all of the necessary paper work, our tax preparer revised our tax returns back to 2003 (the date of diagnosis). We received a cheque for over $17,000 and we continue to save on our taxes yearly by making use of the DTC.

Here is what I have learned from all of this. Accountants and tax preparers provide an excellent service based on the documents that you provide them, but they rarely have time to ask questions about your personal situation. And, unless you are aware of your CRA entitlement, you are not likely to mention personal information to your tax preparer.

Likewise, those who do their own taxes may also be missing out.

At a recent seminar we learned of a man whose father had died 3 years ago. Since the CRA allows you go back 10 years, the son was able to claim the DTC and revise his father’s taxes for 7 years. He received over $15,000 for the family.

The following is a list of conditions that may qualify for the Disability Tax Credit. This list is by no means complete and not all individuals will qualify.

• Addictions: illegal or prescriptions
• ADHD: Primarily Hyperactive/impulsive
• Autism (an estimated 190,000 Canadian children)
• Pervasive developmental disorder (PDD)
• Asperger’s syndrome
• Alzheimer’s disease
• Angina: an estimated 6% of Canadians between ages 50-64 have this symptom of heart disease
• Anxiety
• Arthritis
• Auditory syndrome
• Antisocial personality disorder
• ALS (Lou Gehrig’s Disease)
• Bi-polar disorder
• Chronic Fatigue Syndrome
• Chronic pain disorder
• Colitis
• Coronary artery disease
• Fibromyalgia
• Gambling Addiction
• Glaucoma
• Deafness
• Hepatitis C
• Huntington’s Disease
• Learning Disabilites
• Irritable bowel syndrome
• Migraines
• Arthritis
• Multiple Sclerosis: every day 3 more Canadians are diagnosed with MS
• Obsessive-compulsive disorder
• Parkinson’s Disease: nearly 100,000 Canadians have Parkinson’s Disease, 20% are under age 50
• Post traumatic disorder: military, paramedics, front-line nurses and victims of abuse, violent crimes or accidents
• Feeding: unable to feed themselves or take significantly longer to eat than most to do so
• Stroke: more than 50,000 strokes occur in Canada each year, one stroke every 10 minutes
• Vision problems: blind in both eyes or 20/200 or 20 degrees field of vision
• Walking: unable to walk 100 meters or take significantly longer than most to do so
• Sleep disorder
• Fetal alcohol syndrome
• Dressing: unable to dress or takes significantly longer
• Depression
• Down’s syndrome
• Quadriplegia

As an advisor I don’t do my clients’ taxes personally. I use the experts for this.

I am working with a firm which specializes in submitting all the paperwork to start the process. To date, they have collected over $2,000,000 for their clients. This process takes on average 60 to 90 days and a small referral fee is charged by the firm if they collect.

DON’T DELAY!

2009 is coming to a close and you will miss out on the 1999 credit as of 2010…this may mean thousands of dollars lost forever!

Once you have the Disability Tax Credit you can open an RDSP (registered disability savings plan).

In my next article I will discuss the RDSP and how some can get over $164,151 from only $20,000 invested in twenty years, assuming a modest 3% rate of return. Also, find out what most banks are missing in their advice of the new RDSPs and what you need to know.

Phone me at 905 338-7689, or e-mail me at brian@rightinsurance.ca.

Here’s an excerpt from Ann Landers that I considered very relevant!

DEAR ANN LANDERS:  Last year at this time I was a secure, happy wife and mother.  Today, I sit here wondering if I can get together the money to pay my utility bills before they shut off the electricity and gas.  The grocer has been wonderful about credit.  He knows I must feed myself and the five-year-old twins.

Fourteen months ago, I received a phone call from the hospital across town.  My husband was in critical condition.  He had suffered a heart attack while driving home.  By the time I reached the hospital, he was gone.  I couldn’t believe it.  The man had never had a sick day.  The ironic part of this story is that less than one month before he died, I asked him to buy some life insurance.  He refused; saying the smart thing to do is to keep his money in a savings account where he will produce interest. When he died, the bank gave me the $2,200 he had in his savings account.  If he had bought the life insurance policy, I would have received $50,000.

I loved my husband dearly, but I can’t help feeling resentful.  After all, the children were HIS responsibility.  He should have looked out for us.  I hope you will print this letter. Maybe somebody will learn from it. “ HIS WIDOW

DEAR WIDOW:  Your husband made a mistake, which unfortunately you and the children are paying for.  Put aside your resentment and accept the fact that he was not inconsiderate.  He was ignorant.

DEAR ANN LANDERS:  I have read with interest several letters in your column from widows whose husbands had very little life insurance, or in some cases, none at all.  Some of those widows were bitter because their husbands had not planned ahead.  But in my case, I was the guilty party.

Every time our agent suggested that Mel increase his insurance, I came out with that stupid remark We’re insurance poor.  The truth was that I, like so many other wives, thought my husband would live forever.  Widowhood was something that happened to other women. Today, I’m that other women.

Last week, while going through my husband’s desk drawer I came across an insurance proposal for $40,000 of life insurance.  It was dated five months before Mel died.  It was a good plan and we could have afforded it.  Our agent was trying to help and I knew it, but Mel was in perfect health and I figured I could use that $21.57 a month toward a new color TV. Today, I’m working in a steak restaurant trying to keep my family together.  Believe me, it’s tough.  I hope you will print this letter for the benefit of all those wives out there who don’t appreciate life insurance as much as widows do.  Sign me “KICKING MYSELF IN WINSTON-SALEM.

DEAR FRIEND:  Twenty-Twenty hindsight is easy.  The family that looks ahead and makes provisions for the long shots is the one that sleeps better at night.  I’m sorry your husband didn’t override your veto.  Good luck to you dear.