estate planning

Recently retired Ross and Penny have an estate planning challenge. They've accumulated a comfortable net worth, with a good portion of it in liquid investments. They plan to leave everything to their three adult children, but they also want to help them financially right now. The problem is that all of their children have a different relationship with money than Ross and Penny. In a nutshell, the parents are savers and the children spenders. If they give large sums of money, Ross and Penny would want their children to use the cash to improve their financial lives. Would they do that?

Ottawa dropped Estate Taxes over forty years ago. All the provinces did away with Succession Duties by 1985. We thought that was the end of taxes arising at death. We were wrong.

Ask yourself these questions:

Recently, a client wanted to leave all of their money to two charities through their Will. They wanted to leave a legacy to a couple of charities that were close to them and they didn't have any close family members.

Here is her situation: Age 80, $550,000 in savings (75% non-registered and TFSA), with income of $70,000 annually from pensions and RIFS while living in an upscale retirement residence. She was also spending an additional $20,000 a year from savings to support her lifestyle.

The Baby Boomers are making history as the largest retirement migration ever seen. However, it's their parents who hold the most massive accumulation of wealth which is now being transfered to future generations. Estimated to be well in excess of a trillion dollars, the traditional rules of inheritance are changing.

Wealth transfer can be a complex process for most families but especially wealthy ones. The range of issues involved can include family values, objectives and relationships; business continuity; investment strategy and insurance, taxes and ownership structures, amongst others. At the same time questions of control, responsibility and timing are raised.

Almost everyone agrees that it's a good idea to have a will. However, it is estimated that about half of Canadians do not have one, and it is likely that many wills are out of date, perhaps even invalid.

Not having a will can make the sorting out of your estate unnecessarily expensive, complicated and time consuming. When having your will prepared, one of the most important decisions you will make is who you would like as executor.

Phillip and Betty want their estate settled as smoothly and cost effectively as possible when the time comes. They have taken a number of steps to make sure this happens.

Like many business owners, Rick and Warren thought it would be a simple process to continue the business when one of them died.

Nothing could be further from the truth.

Rick and Warren had a printing company and were equal partners. Warren died suddenly. Warren's shares passed to his widow, Sarah, who became Rick's new partner. She expected a regular paycheque to continue, even though she knew nothing about the printing business and could not contribute to the daily operations of the company.

Earl wants to control the distribution of his estate when he dies and feels that a Will is a good idea. He had heard the ads on radio and TV about do-it-yourself Wills and bought a National Legal Will Kit.