Your estate is everything you own today - your home, savings, investments, life insurance and personal possessions. So, no matter where you may be on your financial journey, you have an estate that needs protecting. But how you approach this plan is important.
With the average price of a home in Canada costing roughly $530,000 in 20201, it's getting harder for first-time buyers to enter the market. This is likely why a growing number of parents are stepping up to help their adult children purchase a home. While it's admirable to offer this level of support in an increasingly expensive world, it's also a complex decision that both parents and their adult children should ponder carefully.
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?
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 However, it is estimated that about half of Canadians do not have one, and it is likely that many wills are out of date, perhaps even invalid.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.
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.
Mutual funds and segregated funds provided by the fund companies are offered through Worldsource Financial Management Inc., sponsoring mutual fund dealer. All other products and related services are offered through Gallant Wealth.