You may be surprised to hear that many Canadians have not created a solid inheritance plan, even though they are expecting to leave assets to their loved ones. Creating a strategy is an important first step, but so is the discussion with the beneficiaries and a financial advisor. Keeping your inheritance private can cause all kinds of surprises and complications after your death. Here we explore the steps you can take to discuss your inheritance plans in advance.
Planning with your Partner
The first thing you should do is to create a plan with your partner on how your wealth should be distributed. This will involve outlining which of your family and friends will be beneficiaries, your financial situation, and your initial inheritance goals. You should also consider those who may need special financial assistance, if it will be equal share, and the necessary provisions.
Create an Inventory
Once you have a strategy, take some time to review your assets that will be included in your estate planning. Make an inventory of all the items such as your house, car, investment properties, personal belongings, and financial investments. Also, note any debts you may have and any fees that will be associated with probate.
Include a Financial Advisor
You should always discuss your inheritance plans with a financial advisor. They have the expertise to help you understand the tax implications, capital gains, and other financial responsibilities that will fall onto your beneficiaries.
You may expect that one of your kin will be thrilled with inheriting your belongings, but they may not feel the same. Not everyone can bear the burden of the costs of a house or cottage. Talking to your family before you finalize your inheritance plan for assets can help you both plan what is the best for everyone.
Communicate about Money
Communicating your plans to your family regarding money is also important. You may be considering charitable gifting to your beneficiaries as part of the inheritance. While it may be attractive to some family members, not everyone may prefer this over heirlooms.
Joint investment or bank accounts with your children can help them to avoid probate fees after your death. But this can cause some issues and complications if there are other children involved. A discussion with your family members in advance may help smooth over any potential bad feelings.
Discussing your inheritance plans with your family, beneficiaries, and financial advisor is the best decision you can make to ensure that everything is left as you wish, and that everyone is as content as can be with your decisions. Your financial advisor at The Beacon Group of Assante Financial Management Ltd. can advise on estate planning strategies to ensure your wishes are met.