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207. Tax Reporting Rules That Suck! Watch Out For Trusts! · Wealth On Main Street

• 0:00
  Speaker A: You are listening to the wealth without Bay street podcast, a canadian guide to building dependable wealth. Join your hosts, Richard Canfield and Jason Lowe, as they unlock the secrets to creating financial peace of mind in an uncertain world. Discover the strategies and mindsets to a financial future that you can bank on. Get our simple seven step guide to becoming your own banker. It's easy. Head over to Sevensteps CA and learn exactly the learning process required for you to implement this amazing strategy into your financial life. That's Sevensteps ca. So the government just created a whole new bill and they shoved it through. And what you should be asking yourself, or you might want to know as a listener, is who's the one that actually gets stuck with the bill? Well, turns out it's you. So if you're in Canada, really our friends in United States, I'm sure the problem is the same there. These bills go through and they get approved. Somewhere along the line they become law. And generally speaking, someone's going to have to pay for it or something in there you're going to have to pay for. Well, that's what we're going to talk about today. I'm joined with my good friend Henry Wong, and we're going to talk specifically about Bill C 32. And we're going to find out a little bit about how that bill, which came into being in December of 2022, we're recording this in early 2024. We're going to talk through what specifically has come up in that bill that's now potentially creating some unnecessary, some hidden, some surprise challenges, at least for the canadian consumer. So buckle your seatbelt, we're going to have some fun, and we're going to figure out how do we go from this bill being proposed to being completed to being today, where it might show up as a problem for you and your family. Where should we begin? Henry, there's a lot to talk about today.
• 1:54
  Speaker B: Well, I guess the first thing I want to talk about is actually a little bit of a step back related to the process of bills, at least from the federal standpoint, I'm sure. Now, the part I want to bring that connection from is when people hear bill, at least from a government context, they think it's just some, I'll call it rules or some new information that's being shared. However, when we think of bills as it's supposed to be defined, especially in a commerce standpoint, a bill is an expectation of a collection of something to come in the form of money. So when bills are proposed, they go through a process and then in that process, it will get a stamp. And in the tax world or the government's world, it's called the royal ascent. So the specific bill we're going to talk about today is called Bill C 32. Now, I'm just trying to start with that because any listeners who listen to mainstream media will hear parliamentary debates talking about bills here and there, but they kind of don't make the connection with the fact that a bill means that there's a bill that's going to come in terms of you potentially needing to pay money out. So Bill C 32 received royal assent, meaning that stamp on December 15, 2022. And you're probably wondering what that bill talks about. Well, the bill actually first goes through talking about penalties for non compliance with these new rules. In the income tax system, there's always penalties for not following their rules. And this bill specifically talks about creating what's called a t three trust, income tax and information return filing obligations. And it's specifically for certain trusts. Now, when it received royal assent and the information that was kind of distributed to the public, you're thinking about, oh, it's just regular trust reporting and things of that nature. And you're like, oh, okay, this is only for, quote, unquote, the rich who have trusts that are formalized legal agreements. And that's pretty much it. Now, one of the main things now, in terms of why we're talking about this today, because there was basically a full year of a kerfuffle trying to figure out what the scope of this bill actually meant and what it was going through in terms of coverage.
• 4:12
  Speaker A: And by scope, you really mean how far reaching, how in depth into our back pocket is this bill going to reach and how many back pockets is it going to be reaching into? I think is what you're identifying as far as the breadth of scope on who is truly impacted by this new bill?
• 4:28
  Speaker B: Absolutely correct. Because in the professional communities that I'm part of, I can see people asking questions amongst each other and trying to figure out exactly what this bill and the scope of what it covered. And the main thing I wanted to highlight in this conversation is this new bill includes, in terms of a scope, something called a bear trust arrangement. So again, when the average canadian or us individual listens to things, they think of a trust, they think of a legal agreement, and then they formalize some complex tax structuring or planning together. And then if they seem diagrams, it'll be like a triangle and whatever it is. But there's this new component that got slipped in there, which is called the Bear trust. Now, in terms of a trust, you're required to report, just like your personal tax return, your corporate tax return, at its specific year end date, a trust return, you've got to file it by the deadline for March 30. And so for those of you in 2023, this is actually when this whole bill is actually enacted for. So you have a calendar year, December 31, which you must file your trust return by March 30, 2024. This is where people are trying to figure out what was included in it and that bare trust. So in terms of this reporting requirement, the first thing is this bill is first focused on just a reporting requirement. I want to really make sure that understanding is very clear. Just like in 2017, 2016, when the government introduced through royal ascent another bill that your principal residence needs to be reported on your personal tax return. Things like, now, a bear trust needs to be reported in this filing requirement. Now, before, again, I dive into the explanation of what a bear trust is. The component that I first want to highlight is if you do not file a return, the CRA is going to penalize you. And the way that they penalize you is, let's say, 5% of your taxes owed, and then interest begins accumulating on that. And on the trust requirements, it's usually at a minimum of not filing that information.
• 6:56
  Speaker A: So there's a direct, like a cash fine, essentially, for not filing, based on these rules. And it sounds like, I'm guessing that will vary based on the size of the trust, maybe?
• 7:08
  Speaker B: Correct. So let's say again, just on standard trusts, the way that trusts are taxed, they're pretty much on the individual's income when the money from the trust is distributed to those beneficiaries. But again, if you don't make a filing, you get penalized for it, just like if you never filed your personal tax return. So, in terms of that component, the other part now I want to highlight is there's a new penalty calculation on trust, and a new penalty that applies to the trust are subject to those disclosure rules. And if you don't file the return, the penalty will be the greater of $2,500, or 5% of the maximum fair market value of the property. So if you had a home, and the fair market value of the home is a million dollars, like it is in Toronto, then that's a pretty significant penalty bill.
• 8:07
  Speaker A: And that would be per. Let's just, let's just run that back, because you said property. Now, when we say the word property, our brain typically goes to the physical brick and mortar property of like a house or apartment building or whatever. But actually in property, what you're really just talking about is the asset. Whatever the asset is. That property could be something else that could formalize the value of a trust arrangement, whatever the arrangement is. So it could be as an example, hey, maybe I'm a musician. Well, I'd be great if I was a musician. I'm not, but I have property in albums, music I've written, and there's royalties, things like that, or writing books. So that could be a form of property that a trust essentially owns. And it could have a certain amount of value or recurring revenue, which then produces a value amount, which then you'd be paying that tax bill on. So the 2500 is the minimum and then up to 5% of, and the air quotes of up to 5%. I'm guessing is someone at CRA is going to be able to. One who's going to determine that percentage? I'm guessing the consumer who's going to pay the tax bill and do the filing isn't going to be the one that's going to be able to decide which fee structure they pay for.
• 9:23
  Speaker B: Actually, the penalty is first on, if you didn't file, you have a penalty from one hundred dollars to two thousand five hundred dollars for not filing the t three return. And then the component of the additional penalty, this is the new component that is part of the bill.
• 9:38
  Speaker A: It's a two layer penalty system.
• 9:40
  Speaker B: Yeah.
• 9:41
  Speaker A: So we have a progressive tax system with multiple layers. And now within the progressive tax system with multiple layers in the trust world, you now have multiple fees around the non filing of taxes for that particular thing. Okay, got it. That's totally clear.
• 9:58
  Speaker B: And then there's interest compounded daily on top of it. And in 2024 it's 10%, which you also can't deduct against expenses. The layer on the non filing penalty, just that one ticket item is the new penalty. There's a new penalty which is an additional 2500 greater of 2500 or 5%. So it's 5%, not like 1234. It's not a range in there, but it's 5% on the fair market value of the property. So the fair market value of the property is kind of at where they will use their method of deciding what fair market value is.
• 10:40
  Speaker A: Right. So if it's a physical piece of real estate, and I have my realtor buddy run me some comparables and I give them how I want them to run the comparables, they're going to go run their own comparables and determine what they think fair market value is. Now granted, they're going to do it three or four or five years later when they're doing an audit, probably, and they're coming after you. And they're also coming after for all the back taxes and the extra fees that they want to charge you with increased penalties of interest that have accumulated over that time frame, because there's not enough people working for that government agency to deal with all the canadian tax consumers to properly assess things on a yearly basis. So probability is when you would find out this is a problem for you, is going to be years later, and then you have to back pay for the problem that you didn't know about. Am I on track there, Henry?
• 11:26
  Speaker B: Yes. And then they've compounded the interest daily on top of the taxes that you're owing them. So let's put this into perspective. You have a million dollar property that is held in trust. We're not even talking about the definitions of the kind of trust, but we're just talking on held in trust. So if you have a million dollar property, 5% penalty. So either 2500 or 5% on the 1 million, that's $50,000 just for that one year.
• 11:53
  Speaker A: Now, it was four years before they audited you. So then it's the fee for not filing, let's say, because you didn't know you had to. And then it's the 50 grand for each of those years. So you're at 200 grand plus all the level one, the layer one fees for the not filing, plus the interest penalty on all of those things combined at 10% current interest rate in early 2024 on the whole works. So that could probably easily ratchet up to 300 grand, I would say, in that time frame.
• 12:27
  Speaker B: Ballpark, I think more than that.
• 12:29
  Speaker A: Probably more than that. Okay. I didn't get a future value calculator out while we're recording the episode. I'm just kind of thinking it through. But let's just say that it reminds me of that commercial. I think h r block used to run these commercials where during tax time they'd have a guy, he goes into the doctor's office and I'm pretty sure it's a proctologist. And he leans over the thing where the paper is and everything there, and the doctor looks at him and says, oh, that's tax pain. I can't help you with that.
• 13:03
  Speaker B: So that is the part that is actually, first I wanted to point out, here's the penalization that the CRA has set up. Again, you can see the bill that is created for that. For, again, I'll call it someone else up at top who is collecting that bill. So that's that penalty component related to it. And now let's now dive into what is a bare trust.
• 13:34
  Speaker A: And before you even jump into that, I want to isolate this, because up to this point, we're talking about things that only affect trust. And so again, if you're listening and you're thinking, oh, well, I don't have a formalized trust agreement, so this doesn't impact me. This is where the understanding of some examples of a bear trust that Henry's going to walk us through is where you may not today, or you may, and you might not even know it. So what are some of the things that are in that definition that are being included or got kind of snuck in to the general description of this bill when it achieved royal ascent? And that's really where the crux of this episode ties into that Henry is going to walk us through.
• 14:10
  Speaker B: Yeah. And actually, for a lot of the practitioners, I can completely, I'll just say empathize with the situation that they were faced with, and they're educating all of their clients about this while having very ambiguous information as it relates to what was being defined and getting included into it. So the key thing that I think the point of this discussion that we're having today, Richard, is not to exercise professional judgment on a very particular circumstance and trying to help you figure out what it is on your situation. The first thing is actually recognizing if you are exposed to this problem, and also very important to recognize the context of the situation on your exposure. If there is an exposure to the.
• 15:02
  Speaker A: Problem, become your own banker and take back control over your financial life. Hey, is this even possible? You may be asking, can I even do this? Well, you better believe it. In fact, it's easy to get going. So easy that we put together a free report. Seven simple steps to becoming your own banker. Download it right now. Go to seventeps ca. That's seven steps ca. Now, let's get back to the episode. When you say practitioner, you're referencing accounting professionals that are working with clients and serving them in this regard because of this, really, we're at the one year timeframe of this bill being enacted, essentially, and we're at the first tax reporting season of it coming through, a full tax year. So the impact of this hasn't really been defined in the tax community. And so that's why professionals are in chat room, just like you might be in a know chat group? Well, there's professional groups where people like Henry who have professional level status in the tax environment are communicating with one another to make sure that they're understanding how best to interpret these. Well, I'll call them abysmal, horrific type rules that are created that impact everyone in the nation. And they're trying to figure out how do we best educate and understand this so that we can communicate it forward to our clients. And so really, it's been a bit of a waiting game trying to figure out how this will play out. And now there's some more understanding of how it's going to play out, which leads us to the recording of this show today.
• 16:34
  Speaker B: So what I want to just highlight and dive into is actually what that bear trust definition is. And the bear trust here exists where a person, so I'm not going to use too much trust language. So it's the trustee holds legal title to the property. Again, a property could people first think of just the physical brick and mortar type building, but property could be stocks, property could be vehicle, property could be just anything. That's how the income tax act defines things.
• 17:02
  Speaker A: Could be shares of business.
• 17:03
  Speaker B: Yeah, shares of a business for the benefit of another person, which is that beneficiary, other than to transfer the title to the property as directed by the beneficiary. So again, this gets very technical because the level of sophistication around legal jargon and terminology of trust and everything is very technical. It goes over people's heads. Now, the main thing I want to highlight is the context of the situation that this bill was proposed. And this is kind of the general behavior of observation, at least the current way the federal government operates, which is by, let's just push a bill through and then everybody will figure it out. It's not like they have actual implementation plans to work with professional communities to iron out the details or whatever it is. There was a lot of ambiguity, and this is not just on this specific bill. There was a whole bunch of other, I'm sure all of you can relate to. The government will just provide some policy that's listed out and then not really issuing, trickling out down the implications for these type of policies.
• 18:20
  Speaker A: The policy is basically a grenade. It's thrown on the tax community and the general public, and there's probably a bunch of small pieces of metal that is going to turn into additional shrapnel. It's like they're throwing the grenade at a bed of nails and the population is just kind of sitting within general vicinity of shrapnel. Of whatever the policy is that was created. That's kind of my interpretation visually, if you can imagine that. And they're just doing it on repeat. So every time they put a new policy out, they're not really thinking through the consequences or the unintended consequences of the policy. And then the follow up to that is when we get into talking about this bear trust agreement is going to be the idea of scope creep where they might, hey, this was the purpose of the bill. This was the main primary purpose. Oh, yeah. But under here, here's three or four things. We just kind of threw in the fine print down at the bottom that we're kind of like, man, no one's going to pay attention to that. And three or four or five years later, we're going to go and recircle back to that item and we're going to then tell everyone what it means and see how that. So you've already had surgery to repair the shrapnel from the grenade, and you think that you're down and you're good, but they actually missed some of the pieces that entered your body. So you got to go back under and they got to start withdrawing the other pieces of metal that landed on you, essentially. So it's kind of like, hey, it's kind of like transformers. There's more than meets the eye to what happens in the policy that's created, but you don't often know, and even the tax community doesn't often know its impact until a period of time goes by.
• 19:55
  Speaker B: Yeah, I mean, any individual who has to make a phone call to the CRA helpline, I'm sure you can imagine how much lack of information there is. And again, similar to this policy or bill getting just slammed down on people, and then they put these unreasonable penalties and everything related to that. So now you can see how the practitioner community is just scrambling so that their own clients aren't caught in this shrapnel, at least as minimized as much as possible to deal with this. And even then, they probably don't have the full answer to things. Just as I'm sharing with all of you today, the dust has pretty much settled here, but it still doesn't ignore the fact that there's a very big concern on that scope creep that now they've shoved this through, they've kind of put their foot in the door at some point. Just imagine that door opening wider for them to tap into more things. So here's kind of where, aside from the technical definition, this is where I wanted to share some possible examples for people to see as it relates to what that bear trust inclusions can be. So I'm just going to share my screen. I'm going to share five top common examples. And this is again, just for educational purposes. So for common types of bear trust includes a parent who adds an adult child to the title of their property for probate planning purposes. Now, probate for a lot of people, just so you know, is related to, I'll call it fees. That's set up at the provincial level as it relates to properties. Now, a common, I'll call it hack. That people do, whether it's right or wrong, is not a right or wrong answer. What they will do is they will include their adult children to the title of their property. Now, in the chinese community, this is very common that what they do, and I'm not going to talk about speak to whether it's right or wrong. I'm just sharing that. Now, this has included as part of the Bear Trust reporting requirement when a child, adult child has been added to the title of the parents, let's call it principal residence.
• 22:14
  Speaker A: And I'll speak to that for a second. And so one of the reasons that that would be helpful or important is with probate, we're not going to get into the inner workings of that. But there is obviously a fee structure to probate, and it usually has to do with the total asset value of the estate. And so this property might be worth a lot of money, maybe it's paid for and it goes into the state, and then the provincial government will then with their probate rules, will tax based on the size of the estate. But secondly is that period of time. So in order for things to clear probate, there's a time frame of verifying stuff that has to go on and that period of time, because they want to see if anyone's going to contest whether it's the will or some of these other things, and it could drag out. And so everyone who's listening here has heard horror stories of things that dragged out for months or even years through a probate process, and they're still not dealt with or settled yet. Now, that is less common. But things like this, where you put an adult child on a property because you want them to receive it, or maybe you only have one child, or maybe they're the one that's already said they're going to look after it, whatever. They're in a position now where they can make controlling decisions over that property without circumventing the timeframe issues that come up with probate. So it's not just about the fees. There's other criteria that there's a reason why this strategy might be beneficial if you want the decision making power to maintain in the.
• 23:40
  Speaker B: So, you know, as what Richard, you and I work with a lot of our clients on is protecting their assets, having control within the family. This is that example. Now that the government has decided to intervene, to say, you need to report that there's this type of legal relationship that exists. I'll call it private. Now it's become public. This is the part that I wanted to use this one example to really dive into the circumstances of what's been happening related to the magnitude and the extent of this type of bill that just was quickly shoved in. This is very, very important for people to understand that this is not just a reporting scope creep. Oh, now they know you have this type of thing. The government has introduced themselves into the equation of this situation.
• 24:30
  Speaker A: Again, just focusing on the primary residence here, because everyone has some kind of a primary residence, whether you own it or not, to be determined. Most people who listen to our show will probably be in that category. And we have different types of people who listen to our program. We have people who are perhaps the young adult child. Maybe it's your parents, and you've already been discussing this, or maybe it's already happened. Maybe you're already on title to that property as part of that probate planning process. It's already been done. So you need to be aware of this, and you can certainly bring it up to your parents and their tax professional, or vice versa. You're at a point where you're thinking about, okay, when it's my time to sunset off into the distance, and I'm thinking about my estate planning and being strategic, and you're already considering doing this process. Now, you need to recognize that this reporting requirement is now on your shoulders. And your tax professional, probably an amazing individual, may not even be aware that it's there. And I suspect, Henry, again, just because this is there doesn't mean that it's wildly popularized. It's not like every time that there's a change, you get like a nice, bold statement says, hey, by the way, you have to report blank. And it's nice and clear. No, it's all this ambiguity that needs to be sorted through by the tax community. So you may not know that this is even something that's necessary until it's several years down the road. And then you have to deal with the aftermath of not reporting something that you never thought you needed to report for.
• 25:57
  Speaker B: Yeah, this is actually just for educational for you to actually recognize that you probably want to have a good relationship with the professional that you're working with to start engaging in these type of discussions, because this is actually a very important moment that I think would really define whether you have a good relationship with that practitioner and also knowing where your exposure is and to their benefit. Right now, they're still dealing with the aftermath of getting clarity, exactly what this is. Now, the other kind of principal standpoint that I just wanted to share before I start diving into the other points. We're not going to go into the same detail as this first point, but the key that I want to highlight is probate, in my opinion, is just kind of a way that the government has inserted themselves to things to arbitrate the distribution of family assets. Like, yes, we've heard about horror stories where when there's distributions of assets, all of that, it's got to be written in a will and it's got to be properly. The government's like, I'm the arbitrator. I'm going to make sure everyone gets their fair share of things. This is, again, just another way for that to be very. They just, again, solidified more clarity for them that I want to know what you have so that when that time comes, sure, for probate planning purposes, they'll be good. But I think there's a different reason behind why they want to know that now.
• 27:26
  Speaker A: Yeah, you could infer, at least I would infer whether everyone else does or not. My educated guess is in 2017, when they ran on a platform, not on a platform, but they passed a bill around the tax reporting of a principal residence if a principal residence was sold in the year. So anytime the property is sold in the year, you have to report it now on your tax return. And prior, that was never the case. Now, they indicated at that time that, don't worry, don't worry, don't worry. We're not going to tax your primary residence in Canada. No, we'll never do that. Well, here's an example now where it's not a direct method of taxing it, but it's maybe an indirect method of creating some taxation on the principal residence with this arrangement in mind.
• 28:12
  Speaker B: Yeah. And they've already forced you with the type of level of penalties that they've already created for it. And it's also, again, in my opinion, very horrible that they don't have that clarity on that implementation. They just threw a grenade out. And then they're like, we'll see what happens from there. So the next point I want to highlight is, let's say a child adds a parent to the title of their property in order to obtain financing. So this is very common, especially in the Toronto community, when it related to wanting to buy a home and the huge lift and skyrocketing of the home prices. And in order to qualify for financing, let's say the husband and wife didn't have enough income to get a mortgage, so they just brought in another person as it relates, and a parent as it relates to helping them qualify for more borrowing. So this is where another type of bear trust arrangement exists. The next one is legal title is held by a bear trust corporation, but the beneficiaries, owners of separate entity. I'm not going to go, these are a little bit more technical, but I'll dive into a few more after legal title to the property is registered in the name of the spouse, even though both spouses have beneficial ownership and legal title is held on behalf of a group of owners and a partnership. So these are just some of those simple examples. And what I wanted to really highlight is that, again, bear trust explanation to me is like a catch all of anything, that there's multiple people involved on one of those properties. This is just a very high level. Again, I'm going to throw a grenade and just explain it in that broad scope standpoint. However, this is actually also important to recognize as it relates to thinking about, let's say, real estate investors who, let's say, move towards doing what's called a joint venture because they can't get financing. That's very similar to this. Number two here. So these are very large concerns to be very aware about.
• 30:21
  Speaker A: Number four on the list, legal title to the property is registered in the name of a spouse, even though both spouses have beneficial ownership. That is definitely a landmine under the ground because relationships change all the time. But nowadays you have a couple, they begin their courtship process. Someone already owns a piece of property and somebody moves into that property, it doesn't always make sense to go and change and update the title to any. There's extra legal work, extra paperwork, extra unnecessary fees and costs. A lot of people just don't even bother doing that. And then again, sometimes depending on provincial regulation, but there's something called dower rights that apply in the process of selling a real estate based on when someone gets married or even in a spousal situation where you're dealing with maybe you're not married, but you're in common law relationship. So there are some things that are designed to help protect people in that environment. But the fact that that essentially automatically creates a trust arrangement, a bare trust arrangement, most people, I certainly wouldn't have known that, and I don't think most people would have had any indication of that until certainly recording this episode. But now. So if you are in a situation where you're the only person on, you're married or you're in a common law relationship and you're the only person on title, you basically have to report this now on a go forward basis. And you probably didn't know that until you listened to this episode. So the way that this impacts people is not a small way. This is going to impact a large percentage of the population. And they just probably most of them won't even know it. And so I can see the blowback happening here, Henry, where ten years goes by and it's not until a property is sold or a person passes away where you're going to truly be dealing with the aftermath of this bill that has now been passed. And we're going to see, well, I envision someone who picks up, like after their dog and they just take it and they throw it into the fan. That's what I'm seeing. I don't know, maybe I'm wrong.
• 32:34
  Speaker B: I agree with you again, I can't speak to how the government operates because I'm not the one who shoves bills down people's throats. However, I think this is, again, not to make people have a lump of crap down in their pants when they've just seen those examples that I've just shared with you. But just be on the lookout to know that this is a very big problem, in my opinion. And I think it's just important to realize that in the context of where we are today in 2024, this is now the first year of its quote, unquote, first time reporting requirement. There actually has been debates related to trying to get more clarity, get more pushing back on the delays, of shoving something like this of ambiguity to citizens. I am just wanting for the listeners to really get an education on understanding the importance of protecting what's yours and getting clarity about that. And ultimately, here's the penalties that they've listed on it. When it comes to, I'll just say, the resources of the government, it's really important to recognize where are they going to target their resources if it's for someone who's on a common law relationship, it's like common law, person to person, are they really a large target? We don't know. I mean, they're probably going to solve a lot of these problems on a simple standpoint, just like the principal residence, they'll include it in the tax return, right? By virtue of you filling out your tax return and listing out your common law, and then you have that ownership, residence, whatever that type of thing. That's probably by default helping you on that reporting component. But that is not still a neglect. With the actual fact that this has now been put into place onto citizens. And this information reporting requirement just brings a lot of concerns because it talks about first, you can see there's a significant increase in administrative burden on the professional community and for yourself to put that information together, just to report to the government, that doesn't make sense. The second is the privacy concerns. Now these type of trust arrangements that were supposed to be in trust and in private now is trying to come out to be public. That's what the government has moved towards, taking private information and trying to shift it into the public domain. Uncertainty around the definitions of what canadian sources of income is going to be and that property, what is property going to include? And obviously there's other concerns around increased tax liability. And we talked about the lack of guidance around it, and it's the proactive people who are trying to hunt it down to get the information to help serve their clients. But it's not their fault, because if you can imagine a whole bunch of concentration of people trying to figure out this information, it's not an easy thing to do.
• 35:29
  Speaker A: Well, one thing I didn't see on the list was cash value insurance that you own personally because it's a private contract and it doesn't show up in any of these things. And it's also, and you can even co own that with another person. Like as an example, I could co own a policy on my kid when he turns 16 years of age and eventually transfer it over and remove myself as an owner on that policy. There's things like that that can be done. Not that you need to necessarily complicate things, but the fact that it's possible is certainly helpful to know. So the fact that the area around people who are choosing to implement the process of becoming your own banker, with the utilization of cash value insurance as a vehicle to accomplish that objective, basically you're in a very good position in relation to where you store your wealth as they continue to make these types of aggressive moves and changes. And maybe this isn't perceived as aggressive. I would perceive it as aggressive simply in its nature as being almost under the radar. And so under the radar and aggressive don't seem like they would go together. But because it's a method of capturing tax revenues that they're not being forthright about, it's not clear and concise to me that seems aggressive in nature. It seems almost as though it'll show up in a method that's almost attacking a certain member of the population base who would be most impacted by this tax grab. And the rationale for that doesn't seem far out of reach because there's a drastic need for increased tax revenues. There's no way to pay for all the exorbitant spending that's happening without an increase in a counterbalance of tax revenue. So they have to find ways to get it somewhere. This just seems like one way where they're trying to fill the void, to raise tax revenues to solve the problems that have been created over the last number of years. At least there's been problems every year with every government. But certainly we can all agree under this current administration that the level of spending is drastically greater than any previous administration. I mean, the data is in on that. The truth is just the truth, right? So it's a math problem. And in order to solve that problem, they need to raise capital through taxation, whether directly aggressive or indirectly aggressive means. And I would put this in the indirectly aggressive means.
• 38:08
  Speaker B: And this one touched on a more, I'll call it sophisticated technical domain that was very much under, for a lot of people, under the radar. And that way people don't know about it, they can't ask questions about it. So now what? Now, you know, this bill is shoved down and it actually includes most of the listeners, in my opinion. Now what? And that's very concerning, especially how it was brought in.
• 38:35
  Speaker A: Well, Henry, every time we have you on the program, we always learn a lot of new stuff. And I appreciate you bringing this to my attention. It's certainly something I wasn't aware about. So I'm very grateful to you for that. And on a positive note, for everyone that's already practicing the concept of infinite banking, and you're focusing on getting more of your financial energy into a system where you do have more control under private contract. You're going down the right path, and your active tuning in to these episodes is going to help you be mindful of some of these changes as they come about. And we'll do our best to help identify them along the road. And so again, very grateful, Henry, thank you for sharing all that for our listeners. Appreciate you so much for tuning in. Poof. Right there on YouTube, there's another recommended playlist of some amazing stuff. It says watch me. You should absolutely do that. And until next time, look forward to seeing everyone on the next episode. Thanks for listening to the wealth without Bay street podcast where your wealth matters us. Be sure to check out our social media channels for more great content, hit subscribe on your favorite podcast player and be sure to rate the show. We definitely appreciate it. And don't forget to share this episode with someone you care about. Join us on the next episode, where we continue to uncover the financial tools, strategies, and the mindset that maximize your wealth.