Estate Planning: How We Can Help You Transfer Your Values Alongside Your Wealth


There’s this lingering myth of “old money families” where wealth is easily passed from generation to generation. But studieshave shown wealth attrition to be more common, as bad investment decisions, mismanagement and dilution of assets between heirs eats into the family fortune.

Overcoming the challenges that plague wealth stewardship comes down to two core elements – strong communication with your next generation and putting a proper wealth transfer plan in place. We’re here to guide you.

The Family Roundtable

One of the most common barriers in wealth transfer is a lack of transparency between generations. In higher net worth families, often the older generations will shield the scope of wealth from other generations to prevent them from abusing their inheritance. But early communication with your adult children about family wealth is key.

Having us as an independent voice to shepherd the conversation can help you and your heirs talk about transfer of wealth on equal footing. It gives you a chance to discuss your financial strategies, your plan for specific family assets including the family business, and any philanthropic goals or values you would like the next generation to steward.

It also provides a forum for the next generation to discuss their own aspirations, to share any fears, and, most importantly, to feel like they play a role not just as an inheritor of the family wealth but also as an active player in the preservation of that wealth.

We can act as an independent voice for the family roundtable, someone who can guide the conversation and ensure all questions are asked and answered. We can also pinpoint challenges and help both you and your heirs come up with strategies to navigate those challenges.

Formalizing the plan

In addition to guiding the conversation, we can also play a critical role in structuring your wealth transfer plan.

We can walk you through the different vessels for protecting wealth in the transfer, advise you on the different structures for trusts, identify assets to include in your will, outline the pros and cons of transferring wealth during your lifetime versus after death, and help you balance personal preferences with tax efficient strategies.

Estate plans are far from static; the wealth transfer process is an evolving discussion, one that we can help you navigate as life events like marriages and remarriages, births of children and grandchildren, significant health issues and death, change your family and your needs.

Amidst the change, it’s good to have a constant – who better to play that role than your financial advisor?

Contact me to learn more about transferring wealth.The information in this communication or any information within the dfsin.ca domain, and or any attachments to any Desjardins Financial Security Independent Network communication is strictly confidential and intended solely for the attention and use of the named recipient(s). If you are not the intended recipient, or a person responsible for delivering this email to the intended recipient, please immediately destroy all copies of this email. Any distribution, use or copying of this e-mail or the information it contains by other than an intended recipient is unauthorized. This information must not be disclosed to any person without the permission of Desjardins Financial Security Independent Network. Please be aware that internet communications are subject to the risk of data corruption and other transmission errors. For information of extraordinary sensitivity, we recommend that our clients use an encrypted method when they communicate with us.

This article was prepared by AdvisorStream for Adriano Beghin and is legally licensed for use by AdvisorStream.

RESP Or TFSA? A Primer On Saving For Your Child’s Education In Canada


It’s easy to shut out the noise about rising tuition costs when your kids are still trying to navigate the early years of grade school. But ignoring the conversation altogether does a disservice to you further down the road.

In Canada, the average tuition cost for university – before the cost of books, travel and supplies – sat around $6,500 for the 2017-18 year rising to between $8,000 and $22,000 for higher-cost programs in medicine and law, according to Statistics Canada. And it’s consistently on the rise. Tuition costs 40 per cent more than it did a decade ago.

But the price tag comes with a benefit. Research from organizations like the OECD, has shown that people with a post-secondary education often out-earn, and outperform peers without some form of post-secondary education.

For a parent who sees the value, the question then becomes: what’s the best way to save for your child’s education?

RESP or TFSA or both?

I often point to two vital tools for building your child’s education: the Registered Education Savings Plan and the Tax-Free Savings Account. Both allow your after-tax contributions to grow sheltered from tax while that money is held in the plan. But both also come with their own unique set of rules.

Let’s start with the RESP – a plan set up to be used specifically for education expenses. With an RESP you can contribute up to $50,000 per child. The main draw with the RESP is government-matching under the Canada Education Savings Grant (CESG) – which pays up to 20 to 40 per cent on the first $500 of annual contributions (dependent on your family income) and 20 per cent on the next $2,000. The maximum annual matching amount falls between $500 and $600 with a lifetime limit of $7,200 per child.

You pay tax on any growth from investments in the RESP and CESG when the income is withdrawn. If your child chooses not to go to school, there are ways to transfer the money to another child or into an RRSP – both of which I can help facilitate.

The RESP is the best spot to put the first dollar for your child’s education and opening one makes them eligible for the Canada Learning Bond if your family falls into a lower income bracket. But the TFSA shouldn’t be discounted.

Unlike the RESP, the TFSA has no stipulation over how the money can be used which makes it a solid part of a wider savings strategy for your child’s education. Suppose you want to help your child out with rent or a car to get to-and-from school? The TFSA is your vessel. The contribution limit is currently $5,500 a year, which you start earning at age 18 (since it began in 2009). You can hold all sorts of investments including mutual funds, stocks, bonds, GICs and savings, and income is tax-free.

The Final Word

Both RESPs and TFSAs are great ways to save but it’s important to remember that a holistic education savings plan is comprised of a number of working parts.

Contact me to set up a strategy unique to your needs.

The information in this communication or any information within the dfsin.ca domain, and or any attachments to any Desjardins Financial Security Independent Network communication is strictly confidential and intended solely for the attention and use of the named recipient(s). If you are not the intended recipient, or a person responsible for delivering this email to the intended recipient, please immediately destroy all copies of this email. Any distribution, use or copying of this e-mail or the information it contains by other than an intended recipient is unauthorized. This information must not be disclosed to any person without the permission of Desjardins Financial Security Independent Network. Please be aware that internet communications are subject to the risk of data corruption and other transmission errors. For information of extraordinary sensitivity, we recommend that our clients use an encrypted method when they communicate with us.This article was prepared by AdvisorStream for Adriano Beghin and is legally licensed for use by AdvisorStream.

Preparing for retirement emotionally

Retirement paves the way to a new and exciting chapter of our lives. Like popping the cork from a long-awaited champagne bottle, this is the moment of relief when, for the first time ever, we now have ample time to travel the world, take up new hobbies, and scratch whatever itch we’ve been ignoring.

Yes, retirement should be exciting. But for many of us, the thought of leaving our jobs forever can be daunting. After all, our careers play an important role in shaping our identity. And to suddenly cut the cord means we have to find something else to fill the void.


iStock-519006737.jpg


This isn’t helped by the fact that the word ‘retirement’ can feel quite limiting – when it’s anything but. All too often, people associate it with old age and the ‘pipe and slippers’ part of life. This is why the financial conversation is often limited to how much you might have to retire on, and that’s that.

But it’s not as simple as that anymore. Today’s typical 60 somethings are nothing like those of a generation ago.

A lot of this comes down to the fact that life expectancy in North America has been on the rise for some time now. A generation ago, men could expect to live up to their late sixties, and for women their mid-seventies. Since then, life expectancy has improved incrementally. The current life expectancy for North American men is 76 and women 85.

This means that for many retirees these days, retirement isn’t a wind-down phase, but a whole new beginning. This means that financially speaking, you might need to consider how to manage your retirement fund more strategically.

But how do you prepare for such a massive transition emotionally?

According to gerontologist Ken Dychtwald, it’s all about mindset. He advises people approaching retirement to do so as they would a career: His advice is to set goals, to visualize a ladder to climb, and to use these targets as motivation to move closer towards your next destination.

This is important because, as human beings, we’re very goal orientated, and without goals, we lack direction. Unfortunately, the statistics show how detrimental it can be to find yourself without purpose and meaning at retirement: depression is prevalent in 22% of men and 28% of women at the age of 65 and over.

If you’re unsure of how to even begin to plan for retirement, then following some of the principles from Professor Dychtwald’s five phases of retirement could help you map out your journey.

Imagination (15 before retirement)

Being at least fifteen years away from finishing work for good, retirement might not seem like a priority. At this point, you’re more likely to be making sure that career aspirations are met, bills are paid, and your children are able to get through university.

But it’s important to think about your pension at this stage as it can help to ensure you have the financial stability to live life on our terms, post-retirement. This is where you can start to dream big and imagine the retirement you really want to have.

Anticipation (3 years from retirement)

Now you’re planning to turn retirement it into reality… this is where preparing emotionally is just as vital as preparing financially.

A great way to do this is by trying to develop a network of retirees whom you can trust for advice so they can share their experience of how they coped with the process.

Make a note of the goals you want to accomplish and what measures need to be put in place in order to achieve them.

Preparing (1 year before retirement)

The new beginning is near! Now’s the time to start developing concrete steps. Ask yourself what you’re going to do during the first week of retirement and what you plan on doing on a day-to-day basis.

Make a plan of what you want to achieve in the first six months and talk it through with your partner or loved ones. Visualizing the practicalities of this new phase will make it seem less daunting when it eventually arrives.

The liberation phase (first year of retirement)

Your working life is finally over! This is the stage when you’re likely to feel the most excited, relieved, and liberated. You can finally begin to explore new opportunities, travels, and hobbies.

Unfortunately, this honeymoon period will eventually fade, but remember, this is natural.

Dychtwald states the importance of staying physically active and maintaining strong social ties with people at this stage.

Reorientation (3 years into retirement)

Being this far into retirement, you’ll hopefully be settled into a new routine and you may even have taken a step back and started to think about what you want to offer the world.

This is the part where creating a legacy for the next generation can be top of mind. Whether that’s by sharing your knowledge and wisdom with others, or by thinking more carefully about the financial gifts you’re leaving children and grandchildren, this is an opportunity for you to decide what impact you want to leave on the world.

Hopefully, this is helpful in terms of thinking about retirement and a brand new beginning. Retirement isn’t the end of the road; dream big and don’t be afraid to chase after your deepest desires.

The information in this communication or any information within the dfsin.ca domain, and or any attachments to any Desjardins Financial Security Independent Network communication is strictly confidential and intended solely for the attention and use of the named recipient(s). If you are not the intended recipient, or a person responsible for delivering this email to the intended recipient, please immediately destroy all copies of this email. Any distribution, use or copying of this e-mail or the information it contains by other than an intended recipient is unauthorized. This information must not be disclosed to any person without the permission of Desjardins Financial Security Independent Network. Please be aware that internet communications are subject to the risk of data corruption and other transmission errors. For information of extraordinary sensitivity, we recommend that our clients use an encrypted method when they communicate with us.

This article was prepared by AdvisorStream for Adriano Beghin and is legally licensed for use by AdvisorStream.

Could there be a link between investing and wellbeing?

Over the past few years, we’ve seen a huge shift in society’s attitude towards health and wellbeing. We’re now generally more aware of the importance of good mental health and thankfully, there is now a greater number of options available for people looking for help.

From meditation apps to supportive techniques and advice on ‘self-care’, there are many different ways we can keep on top of our mental fitness – almost in the same way as we can our physical fitness.

But there is another aspect of mental health that isn’t as widely discussed, and that’s the link between wealth and happiness.

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Money is of course top of the list when it comes to issues most people worry about.

Whether it’s regarding short-term finances or our long-term future, financial insecurity can cause serious anxiety and low self-esteem.

But even though it often seems tempting to ignore money worries, recent research suggests that tackling the issues head-on can actually make people feel better than not doing it at all.

And by this they mean something as simple as opening an investment account.

In Blackrock’s Global Investor Pulse, which each year asks what people think and feel about their financial health, they report that once people start investing, 43% feel happier about their financial future, 36% of people have a higher feeling of wellbeing and 19% feel less stressed.

The results say this is true regardless of wealth, age, gender or life stage. Even more encouraging is that new investors say the improvement in their mood is immediate.

For those of you who already have a financial plan, this may simply be interesting to note. I’d love to know if you feel you are happier as a result of knowing that you have a plan in place. And even more interesting would be whether – as the research suggests – this feeling was immediate.

But it may be more meaningful to people you know who aren’t currently investing their money. Currently 63% of British adults hold no market-based investments at all. The reasons range from finding it too difficult to understand and feeling as if ‘investing is just for experts’.

However, now might be as good as any to enter the market for the first time. And tiny steps can have a huge impact. Even investing small amounts of money can lead to a greater return than just having it in a savings account where interest rates are at an all-time low.

If you think it would be helpful for me to talk to anyone in need of a financial second option, then please pass on my details – I’d be happy to give them a call. Afterall, the results also say that 76% of investors who use a financial adviser report having a positive sense of wellbeing, and who am I to argue with that?!

The information in this communication or any information within the dfsin.ca domain, and or any attachments to any Desjardins Financial Security Independent Network communication is strictly confidential and intended solely for the attention and use of the named recipient(s). If you are not the intended recipient, or a person responsible for delivering this email to the intended recipient, please immediately destroy all copies of this email. Any distribution, use or copying of this e-mail or the information it contains by other than an intended recipient is unauthorized. This information must not be disclosed to any person without the permission of Desjardins Financial Security Independent Network. Please be aware that internet communications are subject to the risk of data corruption and other transmission errors. For information of extraordinary sensitivity, we recommend that our clients use an encrypted method when they communicate with us.

This article was prepared by AdvisorStream for Adriano Beghin and is legally licensed for use by AdvisorStream.

What happens after the stock market drops?

October 2018 ran true to form by ending with a pronounced drop in the major stock market indices. In this article, we try to determine if history can teach us anything about this type of episode.

If you invest in the stock market by means of mutual funds*, it is likely that their value was down on October 31, 2018. In fact, last month the Toronto Stock Exchange index experienced its worst monthly performance in seven years, while in the U.S., the S&P 500 index dropped almost 7% and the Nasdaq, composed largely of tech stocks, plunged more than 9%.

While many analysts anticipated this situation, some investors were surprised by its suddenness after so many years of market growth. Here are five facts drawn from the history of stock market drops that can help us put this recent economic situation into perspective.

 

1.   Market drops occur frequently

A study by Deutsche Bank cited on the Motley Fool website reports that, on average, stock markets will register a correction – i.e., a drop of 10% or more from a recent peak – every 357 days. This works out to a market correction at least once a year. The duration of the drop may vary, but when it happens in a matter of days it will obviously attract more attention.

2.   Downturns generally do not last as long as upturns

Since the end of the 1920s, based on the U.S. market’s S&P 500 index, we have seen eight bear markets, i.e., drops of at least 20% from a recent peak. The average duration of these bear markets was 1.4 years. In comparison, the average duration of bull markets works out to a little more than 9 years.

2.   Patience is a virtue

It is true, however, that the markets can take varying lengths of time to make back their losses and return to pre-correction levels. As illustrated by the following graph, even though the stock market historically shows a strong tendency to rise, the wait can at times be a few months, a few years, or even many years, before it climbs back to a previous all-time high.

 

Graph representing the behaviour of the U.S. market’s S&P 500 index from 1950 to today. The graph shows strong growth for the period as a whole. However, it identifies 11 periods when the index dropped with respect to its previous peak and notes the time it took to return to that level. In seven cases, the index took about a year to recover its losses. In one case, in the early 1970s, it took three years. On two occasions, in the second half of the 1970s and after 2008, it took six years. Finally, it took eight years for the S&P 500 to recover from its drop in the early 2000s.

 

4.   A 10% drop is not recovered by a 10% rise

In this respect, it could be wise to remember that to recover from a loss, you need returns that are higher, percentage-wise, than the loss itself. For example, if you lose 50% of $100, you are left with $50: to regain your initial amount, you would have to earn another $50 on this $50, i.e., a return of 100%. More generally speaking, you would need a return of 5.26% to erase a loss of 5%, a return of 11.33% to erase a loss of 10% and a return of 33.33% to erase a loss of 25%.

5.   Historically, bulls tend to outrun bears

We can see that since the 1920s, bull markets seem to outweigh bear markets time after time. During this period, still taking the S&P 500 index as our benchmark, bear markets saddled investors with an average cumulative loss of 41%. On the other hand, the bull markets would have generated an average cumulative total return of no less than 480%.

It is important to remember that past performance is no guarantee of future results. However, these few historical facts can help to provide some perspective on the stock markets’ behaviour in October and, in a broader way, on market ups and downs in general. Many investors still remember the last stock market meltdown: the one 10 years ago, when prices dropped by about 50% over a period of fifteen months. Since then, up until this past September, the stock markets have provided what many analysts consider to be one of the longest bull markets in history at more than nine and a half years, with a cumulative return of 385%.

 

* Mutual funds are offered through mutual fund representatives associated with SFL Investments Financial Services Firm.

The following sources were used to prepare this article:

Four Pillar Freedom, “Here’s How Long the Stock Market has Historically Taken to Recover from Drops,”  June 21, 2018.
FT Porfolios, “History of U.S. Bear & Bull Markets Since 1926.”
Investopedia, “Stock Market May Plunge 25% as Yields Soar: Goldman Sachs,” February 28, 2018; “Stock Market Nears Longest Bull Run in History,” August 13, 2018.
Les affaires, “Bourse: les marchés terminent le mois d’octobre dans le calme,” October 31, 2018.
See it Market, “Limiting Losses: The Key To Long-Term Investing Success,” April 19, 2016.
The Motley Fool, “6 Things You Should Know About a Stock Market Correction.”

How to save money and secure your family’s financial future?

Becoming a parent is one of the biggest joys in life, but it can also be a major source of stress. After all, parenthood goes hand-in-hand with new responsibilities and expenses.

In 2018, Desjardins Insurance surveyed 3,000 Canadians on financial health and well-being. The findings of this survey revealed that:

55% of respondentssaid that a lack of savings is their main source of financial stress.

46% saidthat expenses are a source of financial stress.

That’s why it’s important to set priorities and adopt good habits for managing your family budget. Once you have a budget in place, you’ll see that it’s an essential tool for:

  • Helping you set spending limits
  • Enabling you to develop strategies for cutting costs in key areas
  • Reducing your stress levels and improving your family’s financial health

What’s the best way to effectively manage a budget? First, you need a solid understanding of your financial situation. Test your financial stability and create your financial profile.

Once you’ve tested your financial footing, check out the other articles in our Advice Center. You’ll find helpful tips for reducing financial stress, especially when you’re starting a family or raising children—two very important stages of life.

How to set financial priorities before baby is born

  • Draw up a budget. This involves entering your current income and expenses to get an accurate overview of your finances. Then you can project your income levels during your parental leave. This will help you determine how much you can allocate to your new needs.
  • Talk to other parents to find out what items are essential and make a list of your new family expenses.
  • Set aside an emergency fund, in case something comes out.
  • Review your life and disability insurance needs, as well as your will, taking into account your new beneficiary.

How to save after baby is born

  • See if you can borrow items from families with older children.
  • Check whether your community offers benefits or programs for new parents.

How to keep your budget in check as your child grows

Here are some ideas:

  • Buy used sports equipment.
  • Sign your child up for school clubs and teams. These are often less expensive than activities offered outside the school.
  • Buy a used car and carpool with other parents.
  • Encourage your child to make cards and gifts for their friends’ birthdays.
  • Check with the provincial and federal governments to see which expenses can be deducted from your taxable income or provide tax credits (e.g., childcare, child fitness expenses, etc.).
  • Find out whether you’re eligible for government programs such as the Canada Child Benefit.
  • Set financial goals, such as contributing to a Desjardins Registered Education Savings Plan (RESP). For example, you could invest your Canada Child Benefit in an RESP or ask your child’s grandparents to contribute. In addition to investing in your children’s education, you’ll receive significant government grants.

Raising happy and healthy children doesn’t have to put your finances at risk. With proper planning, you can reduce your stress levels and protect your family’s financial future.

Useful links

 

Is gas expensive?

The way gas prices have been rising in the past few years, many drivers are starting to wonder how high the cost at the pump can go… A glance at the situation elsewhere in the world will help put things in perspective.

It’s a classic scenario: you fill up the tank, discover that it costs you even more than it did last time, and suddenly feel as if your gas is the most expensive in the world. True or false?

Refining our understanding

First of all, we have to keep in mind that the price of crude oil accounts for almost half of what we pay for gas at the pump. Oil prices are set on the international market and are affected by inventories, global demand, wars, strikes, the climate, and other more or less random factors. Add the cost of refining, transportation and marketing, mix in some government taxes and perhaps a little regional rate management by the oil companies… and the result is the price you pay for a litre of gasoline.

What that means in Canada…

The chart below gives a recent snapshot of the situation in various Canadian cities. As you can see, gas prices vary significantly from place to place. Live in Montreal? Well, be thankful you’re not in Yellowknife… But that’s nothing compared to other parts of the world.


Source: Natural Resources Canada, January 2012

… and elsewhere

At one end of the spectrum, we find big oil-producing countries, such as Iran (10 cents a litre) and Venezuela (2 cents!), who allow their citizens to benefit from their collective wealth by keeping fuel prices to a minimum. But don’t forget that average salaries in these countries are $11,882 per year and $12,048 per year, respectively.

At the other end of the spectrum, we have Europe, where countries such as Denmark and the Netherlands, even though they produce oil, recently saw gas prices reach almost $2.60 a litre! As shown by the graph below, European governments also see an attractive tax lever in gasoline, and they use it with gusto.


Source: The Atlantic

In short, gone are the good old days of a dollar a litre, and the time of $1.50 a litre or more may be upon us… But we can console ourselves with the thought that, no, Canadian gas is not the most expensive in the world!

 

 

In collaboration with Desjardins Financial Security Independent Network.
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© All rights reserved. Desjardins Financial Security Independent Network 2018.

Desjardins Financial Security Independent Network is a registered trademark owned by Desjardins Financial Security. Mutual Funds representatives act on behalf of Desjardins Financial Security Investments Inc.

Mutual Funds are offered through Desjardins Financial Security Investments Inc.

 

Ensuring a smooth business transfer

Five things that could tip the scales towards success.

According to a report by the Business Development Bank of Canada, nearly 60% of Canadian business owners are now over 50, and 40% are thinking of handing over the business to someone else during the next five years. One in three would like to do so within the next three years.

This could present a significant challenge with regard to the business succession and management transfer. The charts below illustrate five factors that could make a difference and help entrepreneurs ensure a successful transition.

Texte alternatif de l’image

 

The following sources were used in preparing this article.
Canada Revenue Agency, « Which gains are eligible? ».
BDC, « Business Transition Planning ».
Chambre de commerce du Montréal métropolitain « Réussir son transfert d’entreprise ».
Deloitte, « The importance of succession planning for family businesses ».
Les affaires, « Transfert d’entreprise : connaissez-vous bien les enjeux fiscaux et juridiques ? »,
« Le b.a.-ba de l’assurance pour les entrepreneurs », « Les entrepreneurs québécois tardent à préparer leur relève ».
PwC Canada, « Creating a plan for the next generation of family businesses ».

 

Money by Marriage

Money by marriage

Money by marriage

Stepfamilies can produce some unanticipated situations when it comes to deciding who gets what slice of the financial pie.

While so-called “intact” families (with both of the biological or adoptive parents still present) remain the majority in Canada, stepfamilies, also known as blended families, continue to grow in number. In fact, the latest census shows that a child entering adolescence has a more than one-in-three chance of no longer living with his or her original family.

L'industrie des fonds communs de placements au Canada

Census figures also show that the number of common-law couples has been increasing steadily for the past 25 years: on average, over 21% of Canadian couples are living common law, and the percentage is significantly higher in some parts of the country.

L'industrie des fonds communs de placements au Canada

This situation can raise important questions when the time comes to determine what each family member is entitled to, financially speaking. The following example gives some idea of how complex this issue can become, and how important it can be to get professional advice in this area. (Note that this is a general example; provisions may vary from province to province.)

One couple, three different scenarios

Here’s the situation: Paul, age 50, has three children from a previous marriage and has been living with his current spouse, Natalie, age 52, for a number of years. Natalie has two children of her own from a previous marriage. Paul has a prosperous career as a partner in his business and most of the couple’s assets are in his name. Unfortunately, he passes away in the prime of life. What happens to his estate?

Scenario 1: Paul and Natalie are living common law 
After living through the breakdown of their previous marriages, Paul and Natalie weren’t interested in “getting back on that horse” by marrying again. In this case, unless Paul made a will in favour of Natalie, it is very likely that Paul’s assets would go to his children – maybe even to his ex-wife, if his estate planning was inadequate or out of date. In fact, Paul’s estate could ultimately end up in the hands of any children his ex-wife had after they split up, which is probably not what he would have wanted.

Scenario 2: Paul and Natalie are married and Paul has a will
In this scenario, Paul’s will states that his assets are to go to his children if Natalie dies first, but to Natalie if Paul dies first. Since Paul has died first, when will his children inherit their share? Answer: maybe never. It’s possible that when Natalie dies, her own children will inherit what remains of the estate.

Scenario 3: Paul and Natalie are married, but there is no will
In this third hypothetical situation, the distribution of assets will be determined by the laws in force in the province of residence. In Quebec, for example, when it comes to the division of family assets, the children will inherit two-thirds and Natalie will get one-third. In certain other provinces, notably Ontario, British Columbia, Saskatchewan, Manitoba and Nova Scotia, Natalie will be entitled to a “preferential share” of the estate, and anything left over will be divided between Natalie and the children. It should be noted that legislation often favours blood relationships, especially if there is more than one child.

Clearly, the reality of blended families can give rise to situations where the legal rights of family members may take precedence over their “moral” rights – for example, the children’s right to receive a share of a deceased parent’s estate. To make things even more complicated, just imagine if Paul had set up a family trust before he met Natalie, or if there was a partnership life insurance policy at the firm where he was a partner…

This is why estate planning generally leverages various tools, starting with an up-to-date will and life insurance, to make sure that a person’s assets are transferred, as intact as possible, to the intended heirs.

If you’d like to put some order into your own planning, a good first step might be to talk it over with your financial security advisor or mutual fund representative.

 

The following sources were used in preparing this article:
Educaloi, ‘‘L’union de fait: vivre ensemble sans être mariés’’, ‘‘ Sans testament, qui hérite ? ’’
LegalLine.ca, ‘‘What happens if you die without a Will?’’
MarketWatch, ‘‘My stepmother inherited my late father’s estate – I want my fair share’’, June 30, 2017.
MoneySense, ‘‘What do I owe my step-children?’’, February 17, 2017 ; ‘‘Who gets what in a blended family with no will ?’’, May,15, 2017.
Statistique Canada, , ‘‘Portrait de la vie familiale des enfants au Canada en 2016’’ ; ‘‘Familles, ménages et état matrimonial : faits saillants du Recensement de 2016’’, August 2, 2017.