How you can help out your family year-round
It’s often said that parents enjoy the holiday season more than the kids because of the sheer joy they can bring to their youngsters by giving them the gifts they want. When the kids are young, a small toy or storybook might do the trick. As they grow older the presents, in turn, also tend to get bigger, perhaps a favourite video game, then a bicycle and maybe a cherished electronic device. But, what about when your children are adults and their greatest needs become financial in nature? You can help there as well, and not just during the holiday season. If you’re getting to the stage in life where you’re thinking about creating a meaningful legacy for your family, you’re certainly not alone.
Preparing for a substantial reallocation of wealth
As more people of the baby boomer generation approach or firmly establish themselves in retirement, there will likely be a massive amount of money being passed along to the next generation (or two). While estimates vary, it’s commonly anticipated that some $750 billion to $1 trillion dollars of financial assets in Canada will transfer among generations over the next decade or so. This phenomenon is known as “intergenerational wealth transfer” and it will likely have a significant impact on the Canadian economy for years to come. Some of the money will be invested in businesses – either directly or through investment products like stocks, bonds and mutual funds – to help build personal wealth, while other money will support economic growth through the purchase of goods and services.
Just as your kids were thrilled to receive gifts from you during special occasions like the holidays or a birthday, as adults they will greatly appreciate the financial help that a thoughtful inheritance can provide. The key word here is “thoughtful.” While you want to pass along assets to your family, you want to have a strong plan in place so this wealth transfer is done as fairly and effectively as possible. For instance, in some families it makes sense to distribute the wealth equally, while in others a larger proportion may go to family members with the greatest need. For everyone, it’s best to formulate a wealth transfer plan that minimizes taxes and keeps more hard-earned money in the family.
Benefit from financial advice
Constructing the right estate plan can be complicated. Most people wouldn’t even know where to start. That’s one of the big advantages of working with an experienced financial advisor, someone who can offer you the expert guidance and advice you need to implement a successful wealth transfer. Together, we can map out a customized financial plan that takes all of your circumstances into consideration. In turn, this plan will allow you to gift assets to your family in a sensible, tax-efficient manner that will benefit them now and over the long term. Let’s get this crucial conversation started.
Contact our office today to learn more about how you can develop a strong estate plan and build the lasting legacy you deserve.