2023 Week 46

How to Succeed as the Steward of Family Wealth

by BlogEducationEstate PlanningFinancial Planning

How to Succeed as the Steward of Family Wealth

As the primary individual responsible for the multi-generational legacy of an ultra-high-net-worth family, it’s crucial to understand the role of stewardship. Stewardship involves the astute management of resources along with the preservation of the family legacy, including its transition to the next generation. Within the domain of complete family wealth management, stewardship becomes a sacred commitment—an intricate tapestry woven with the threads of preserving wealth, safeguarding a family’s narrative, and ensuring the endurance of its financial lineage. This role involves making sound decisions in relation to the larger family vision, employing strategies that shield assets from risks, and enhancing the family’s financial holdings over time. Beyond the mere management of wealth, stewardship embodies the greater  responsibility of upholding the family’s legacy with integrity and a forward-thinking perspective.

Overcoming Challenges in Stewardship

It’s no surprise that with the responsibility of being the family steward, there are also challenges individuals may face. Below are four common challenges we’ve helped walk our clients through, along with initial steps to overcome them.

  • Prioritizing short-term gain over long-term benefits.  With the pressures of today, many may find it challenging to make sacrifices today for the sake of tomorrow. To overcome this hurdle, it’s essential to shift your perspective and understand that stewardship is an investment in a legacy that will endure beyond your lifetime. Focus on the lasting impact of your decisions and actions to help you remain motivated by the family legacy.
  • Succumbing to societal pressures and consumerism. We live in a world that places value on materialism and consumption. This can be alluring, particularly in a culture where success is often equated with the accumulation of possessions and/or the pursuit of immediate gratification. To move through this challenge, it’s crucial to connect back to the larger family vision, tap into your deeper values, and develop a strong sense of awareness for aligning your values with your actions. Stewardship is often about making thoughtful and deliberate choices that are aligned with your family values as they contribute to the greater good. 
  • Lack of planning and clear communication One key to a successful legacy is in-depth planning and communication within families. When wealth and assets are intended to pass from one generation to the next, it’s essential to have clear and transparent discussions about your intentions and expectations. Without proper estate planning and open conversations, misunderstandings, conflicts, and even legal disputes can arise, jeopardizing the legacy you intended to leave behind. Consider the help of a qualified wealth advisor who can assist in drafting a comprehensive plan.

Lack of financial education and knowledge. One thing at Beacon Family Office that we are passionate about is making sure the rising generation is knowledgeable about the financial landscape they’re in. This helps mitigate risk during the wealth transition. To mitigate the lack of financial education and knowledge so you can have greater impact as the family steward, make it a priority to educate yourself about sustainable financial practices and responsible asset management. Seek out resources, attend seminars, and engage with experts in the field. By increasing your knowledge and understanding, you can make more informed decisions that align with your stewardship goals, leaving a positive impact on the people around you. Additionally, teaching family members about the importance of stewardship encourages them to take an active role in discussions about managing the family’s wealth and legacy. This creates a shared sense of responsibility and accountability that will help them understand the outcomes of different choices and encourage them to think about not only their own interests but also how those choices affect the family and the community as a whole.

Stewardship Principles in Estate Planning

As the family steward, you will be required to make thoughtful and sustainable decisions with the aim of protecting and growing your assets over time. A well-structured estate plan should consider the financial well-being of beneficiaries as well as the values, beliefs, and intentions of the benefactor. Whether it is the family business, real estate holdings, investments, or personal assets, stewardship in estate planning provides a framework to safeguard the legacy and ensure it aligns with the benefactor’s vision. This may encompass charitable giving, trusts, and endowments designed to support causes close to the heart of the benefactor.

Within this aspect of stewardship, wealth is thoughtfully managed and utilized for the betterment of future generations and society as a whole. This lays the foundation for a secure financial future while also cultivating a sense of responsibility, ethics, and a legacy of giving that can stand the test of time. By embracing stewardship as a fundamental pillar of estate planning, individuals can leave a meaningful, enduring legacy that extends far beyond financial assets and transcends into the realm of impact, making a difference for generations to come.

Listen to our Legacy Builders Podcast

As you reflect on the profound importance of stewardship in managing your family wealth and estate planning, ask yourself, "How can I ensure that my financial legacy is not only preserved but also aligned with my values, benefiting both my family and the greater community?" Connect with the Beacon Family Office. Together, we can navigate the challenges, make thoughtful choices, and build a lasting legacy of meaningful impact for generations to come. Your legacy awaits—let's shape it together.

2023 Week 45

Unlocking Legacy: The Art of Estate Planning for High-Net-Worth Families

by BlogEstate PlanningRetirement

Unlocking Legacy: The Art of Estate Planning for High-Net-Worth Families

Estate planning stands as the cornerstone for individuals of considerable wealth, offering a strategic roadmap that extends far beyond the management of assets. Beyond the sheer accumulation of wealth, estate planning serves as a vital mechanism for these families to navigate the complexities of asset distribution, tax implications, and the perpetuation of their values and aspirations. It’s not merely about the physical assets but also the preservation of a lifetime’s work and values, the assurance of a lasting impact on the lives of their heirs, and the causes they hold dear. In this regard, the relevance of estate planning to high-net-worth families cannot be overstated.

In this article, we’ll explore why real estate planning is relevant for high-net-worth families and how you can take practical steps to further safeguard your assets. We will also break it down into essential components, from creating a will to the use of trusts to further secure your estate.

Estate Planning Essentials

In it’s easiest terms, estate planning is the process of strategically handling your assets, both during your lifetime and after your passing. It involves making key decisions to ensure that your property and wealth are distributed according to your will. This plan aims to minimize the financial burdens your loved ones may face when the time comes.

Relevance of Estate Planning 

At it’s core, estate planning plays a pivotal role in safeguarding your legacy. When managed effectively, estate planning is about preserving and efficiently transferring your assets. This ensures that your beneficiaries are taken care of, particularly should they face challenging and trying times.

Key Components of an Estate Plan

Like most aspects of wealth management, estate planning is developed around your assets and your goals. No two estate plans are alike, just as no two families are alike. What’s important to note is that most estate plans require the following components to be effective:

  • Will: A will is essential for specifying how your assets should be distributed after your passing. It ensures that your family’s wealth is distributed according to your wishes, which is crucial in managing and preserving family wealth.
  • Trusts: Trusts are versatile tools that can be used to accomplish a variety of estate planning objectives. They can help preserve assets, provide for specific family members or charitable causes, and offer control over how and when beneficiaries receive their inheritance. To learn more about trusts and wealth management, visit here.
  • Beneficiary Designations: Proper beneficiary designations on accounts like life insurance policies and retirement accounts ensure that these assets pass directly to named beneficiaries and simplify the transfer of wealth.
  • Durable Power of Attorney: This document enables someone you trust to manage your financial affairs if you become incapacitated. It’s crucial for ensuring that your assets are managed and protected during your lifetime.

Business Succession Planning: This involves creating a plan for the smooth transition of the business to the next generation or to a designated successor. Proper succession planning ensures the continued success of the business and the preservation of its value within the family.

Creating a Will and Testament

Let’s take a deeper look at the will, often referred to as a last will and testament, as an aspect of the estate plan, as its importance cannot be overstated. Your will serves as the beacon that guides the distribution of your assets when you are no longer there to do so yourself. This is a legal document that allows you to rest in peace knowing that your wealth and assets are distributed according to your last wishes. When drafting your will, consider the following to ensure the document properly captures your wishes:

  1. Provide Clarity to Ensure your Legacy

“Clarity is kind,” goes the old saying. When it comes to your legacy, the kindest thing you can do is to ensure that your intentions are crystal clear in writing, thereby reducing the potential for disputes and uncertainties among your heirs. Your will empowers you to decide precisely how your assets will be allocated, removing this uncertainty from your loved ones. You have the autonomy to choose who inherits what, and even under what conditions. This allows you to tailor your legacy to your vision, ensuring that the people and causes dear to you are duly supported. It’s advisable to seek the assistance of an experienced wealth advisor or estate planning lawyer to ensure that your will is legally sound. Here are some key considerations for drafting a clear will:

  • Use straightforward and unambiguous language to describe your assets and their distribution.
  • Specify the beneficiaries for each asset and be as detailed as necessary.
  • Address any contingencies, such as what happens if a beneficiary predeceases you.
  • Sign and date your will in the presence of witnesses to ensure its validity.
  1. Protect loved ones

A well-written last will and testament is important for making sure that your family is taken care of and that they have a secured future. It goes beyond just distributing assets; it involves a comprehensive approach that includes appointing guardians for minor children, establishing trusts for education and future support, and providing for elderly or vulnerable family members. It’s crucial for you to make these difficult decisions to guarantee that someone who shares your values and viewpoints raises the next generation, thus carrying on your legacy.

  1. Choose an Executor

An executor is an individual or institution entrusted with carrying out your wishes as per the terms of your will. Selecting an executor is a critical step. It’s imperative to choose someone you trust implicitly, as they will have significant responsibilities.

  1. Ensure a Smooth Transition

A well-drafted will can significantly expedite the probate process—the legal validation and execution of your will. Creating a will, while essential, can seem like a daunting task. It’s crucial to approach it systematically, ensuring that your document reflects your wishes accurately and complies with legal requirements.

Trusts in Wealth Transfer

Trusts are like the sturdy foundation upon which your estate planning and business transition can be built. Transitioning it to the next generation can be one of the toughest slopes when it comes to ensuring success. This is why trusts, such as Grantor-Retained Annuity Trusts (GRATs) and Family Limited Partnerships (FLPs), can be the glue that holds your succession plan together.

  • Grantor-Retained Annuity Trusts (GRATs) are irrevocable trusts that allow the grantor to transfer assets to heirs while retaining an annuity payment for a specified period. This arrangement helps preserve the current asset value while providing the grantor with income during the trust term. Upon the trust’s conclusion, the remaining assets pass to the chosen beneficiaries with minimal tax implications.
  • Family Limited Partnerships (FLPs) offer a family-centered structure for asset management and wealth transfer. Family members can create an FLP by contributing various assets to the partnership, with the senior generation acting as general partners. This setup centralizes control, safeguards assets, and potentially allows for the discounted transfer of limited partnership interests to younger generations. Senior generations can maintain management control while gradually transitioning ownership to the next generation.

These tools allow you to pass on business interests, real estate, or other assets while retaining control and generating income. Not only that, you can also create a trust to hold and manage the business assets, ensuring a smooth transition to the designated successors. This not only preserves the value of the business but also provides a framework for its continued success.

Listen to our Legacy Builders Podcast

Estate planning is a vital step in managing and securing your family's wealth. Keeping the above in mind, ask yourself, Have I taken the necessary steps to safeguard my assets, ensuring my beneficiaries’ futures are accounted for? If you’re ready to work through this question, connect with Beacon Family Office to receive expert guidance and support in your estate planning journey.

Business people discussing business during conference

Governance Structure Exploring New Frontiers for the Framework of Your Family Office

by Estate PlanningFinancial PlanningGovernance
Business people discussing business during conference

In any family office, having a clear roadmap to effectively operate is crucial. This is where family governance comes in. This governance refers to a system of processes and structures implemented at the highest level of the family ownership group. This system allows for  the best possible decisions regarding the direction of the business to be made. In particular, this provides assurance of accountability and control, especially in light of diverse and potentially divergent objectives among management and ownership. A variety of decision-making entities, such as family assemblies and family councils, carry out family governance, which entails the formulation, supervision, and adjudication of rules for the internal and external interactions of family members. Effective family governance assists business families with a multigenerational vision by encouraging cohesion and unity, facilitating alignment, and managing the family-business interface effectively. It transforms family actions into deliberate behavior characterized by widely held agreement and strong commitment from family members.

Finding the right governance structure for your family office

Not all governance structures are suitable for each family office. Discovering which one is right for your family office requires careful consideration and assessment of the unique needs and dynamics of your family. Here are some steps to help in the process;

  • Understand your family’s objectives: Start by understanding the goals and objectives of your family office. Consider factors such as wealth preservation, asset management, succession planning, philanthropy, and family legacy. This understanding will guide the selection of a governance structure that aligns with these objectives.
  • Assess family dynamics and size: Evaluate the size and complexity of your family, including the number of family members involved, their level of involvement in the family office, and their relationships. Consider the dynamics, communication styles, and decision-making processes within the family. This assessment will help determine the appropriate level of formality and structure needed in the governance model you implement.
  • Seek external expertise: Engage professionals with expertise in family office governance, such as family business consultants, lawyers, or wealth advisors. They can provide insights into different governance models and help tailor them to the specific needs of the family office. Their experience and knowledge can guide the decision-making process and ensure compliance with legal and regulatory requirements.
  • Consider governance structures: Explore different governance structures commonly used in family offices, such as family councils, boards of directors, or advisory boards. Each structure has its advantages and disadvantages. Family councils, for example, provide a platform for family members to discuss and make decisions collectively, while boards of directors bring in external expertise and independent perspectives.
  • Define roles and responsibilities: Clearly define the roles and responsibilities of family members, executives, and advisors within your chosen structure. This includes determining who will be involved in decision-making, who will oversee specific areas of the family office’s operations, and how accountability will be established. Clarity in roles and responsibilities helps avoid confusion and conflicts.
  • Establish communication and decision-making processes: Develop and document effective communication channels and decision-making processes within the governance structure. This includes setting up regular meetings, defining protocols for sharing information, and establishing mechanisms for resolving conflicts. Open and transparent communication is essential for effective governance while maintaining relationships within the family.
  • Review and adapt on a regular basis: Continually review and assess the effectiveness of the chosen governance structure. Seek feedback from family members and stakeholders to identify areas for improvement. As the family office evolves and circumstances change, be prepared to adapt and modify the governance structure accordingly.

When To Implement a Governance Structure

Successful implementation of a governance structure for your family office requires precise timing. There are certain key indicators that can help determine when it makes sense to implement a formal governance structure. A generational transition within the family is one such significant factor. When younger family members begin to assume leadership positions and become more involved in the family office, it is the optimal time to either implement a governance structure or review and revamp your current one. This ensures the continuity of the family’s vision and values across generations. Additionally, it helps facilitate a seamless transition while clarifying roles and responsibilities.

Another indicator of implementing and/or reviewing your governance structure is when your family office experiences substantial growth and increased complexity. As your company grows, diversifies, or manages a considerable rise in assets, the need for a structured governance framework becomes more apparent. This framework provides guidance and decision-making processes to effectively manage the complexities associated with business growth, ensuring that the family office’s strategic objectives are maintained.

In addition to development and transition, family conflict or disagreements can also demonstrate the need for a governance structure. Occasionally, family dynamics, particularly within the context of a family office, can result in conflicts that negatively impact the office’s operations and long-term viability. Establishing clear communication channels, facilitating conflict resolution, and ensuring that decisions are made in the best interest of both the family and the business can be accomplished by implementing a governance structure during such periods. Having this structure in place reduces the likelihood that conflicts will disrupt the family office’s goals by fostering transparency, equity, and accountability.

Key Elements of Family Office Governance Structures

While there are many elements to consider when setting up your governance structure, there are a few common elements that should be considered. Understanding the needs and goals of the organization’s stakeholders, such as customers, employees, and shareholders, is crucial for effective governance. By aligning the family enterprise’s performance with these needs and goals, governance can ensure that the organization remains responsive and relevant. Creating clear statements of vision and mission for the organization is essential. These statements provide a sense of direction and purpose, guiding decision-making and actions.

Governance in a family business system involves maintaining discipline and accountability throughout the organization. This includes ensuring adequate dialogue, planning, and problem-solving by bringing together the right people at the right time to discuss important matters, especially as they relate to the overarching vision and mission. Clarifying roles, rights, and responsibilities for key individuals and providing them with the necessary tools and support helps maintain discipline. Additionally, it requires the development of policies to guide the behavior of all family and non-family members while keeping the organization on track to achieve its objectives. These policies provide a framework for decision-making, ethical conduct, and compliance.

Key Challenges Faced by Family Businesses and Family Governance Structures

Family businesses face challenges in maintaining continuity, but with business family governance in place, these challenges are more easily overcome. Challenges include leadership transition, family conflicts, balancing family and business interests, and the need for professionalization and strategic planning. Smooth leadership transitions are critical. Family governance as it pertains to the business establishes succession planning processes, identifies and develops future leaders, and ensures leadership transitions are merit-based and aligned with long-term business goals.

With a governance structure in place for the business, you will have established clear boundaries and decision-making processes, ensuring strategic objectives guide business decisions rather than personal interests. By ensuring transparency and accountability, you are more likely to reduce conflicts of interest and prioritize long-term business sustainability.

Often, family businesses incorporate external expertise and independent directors on the board to foster professionalization of the governance structure. Here, strategic plans are aligned with the family’s long-term vision and goals, coupled with external perspectives, which help family businesses adapt and remain competitive because of the external insight beyond the family unit.

The Importance of Consulting with a Financial Advisor for Governance

Consultation with a financial advisor can play a vital role in establishing a governance structure for your family office. A financial advisor possesses specialized knowledge and skills in areas such as family office governance, wealth management, and regulatory conformance. Their participation can provide significant guidance and value during the development of your governance framework.

Financial advisors offer an abundance of customized solutions and best practices. They can evaluate your current governance practices, identify any gaps or areas for development, and provide individualized solutions to meet your particular requirements. This may include implementing policies and procedures, establishing reporting mechanisms, and building  frameworks for fair and objective performance evaluation. You can increase the efficiency, transparency, and efficacy of your family office’s governance by implementing these tested strategies and procedures.

One final note about the benefits of consulting with a financial advisor is the overall success and reputation of your family office. These depend on your office’s compliance with legal and regulatory requirements. Financial advisors can help you navigate the complex regulatory landscape and ensure that your governance structure complies with all applicable laws and regulations. They aid in the implementation of robust compliance procedures, the establishment of internal controls, and the execution of periodic audits. You can mitigate potential liabilities and demonstrate a commitment to good governance practices by proactively addressing compliance and risk management with your financial advisor.

Listen to our Legacy Builders Podcast

Implementing a well-designed governance structure for your family office is as unique as your family itself. The best thing you can do is connect with an advisor committed to walking alongside you as you create a structure that works for you, your family, and your vision. At Beacon Family Office, we specialize in conducting a comprehensive assessment of your family dynamics, goals, and objectives and guiding you through the process of selecting the optimal governance model for your family office. To learn more about how to enhance your governance structure, connect with us today.

Why Succession Planning is Key for Your Business

What is a Family Office?

by BlogEstate PlanningFinancialFinancial PlanningGovernance
Why Succession Planning is Key for Your Business

A family office is a private wealth management company that caters exclusively to ultra-high-net-worth families. These offices are designed to address the unique financial needs and challenges faced by affluent families and provide them with an all-encompassing solution for managing their wealth. The services offered by family offices can range from investment management, tax planning, estate planning, philanthropic planning, family education, multi-generational planning, and lifestyle management services.

Managing the Complexity of Family Wealth

Successfully managing family wealth is a complex endeavour, and each family’s circumstance is unique. It is the responsibility of the family wealth manager to bring professionalism to the private work of growing and safeguarding a family’s assets for the foreseeable future. At the heart of effective family office administration is the expert navigation of several crucial areas. Below are four of these areas that often play a role in managing complex family wealth.

  • Investment Management: This is the cornerstone for accumulating and preserving wealth, which necessitates a customized approach that takes into account the family’s risk tolerance, financial objectives, and core values.
  • Risk Management: A vital component that requires cautious consideration. This typically involves  diversifying investment portfolios, monitoring market trends, and employing advanced risk management techniques. When families proactively protect their assets, they obtain peace of mind, knowing that their wealth is well-protected.
  • Financial Planning: Essential to the administration of a family office, this provides an all-encompassing view of the family’s financial situation. This often involves implementing tax planning strategies that minimize liabilities and maximize wealth preservation, thereby ensuring that financial resources are utilized efficiently to support goals and aspirations.

Estate Planning: This is a critical aspect of the family office that cannot be overlooked. A thorough estate plan that reflects the family’s intentions, minimizes tax implications, and protects the family’s legacy for future generations can be organized with the help of legal professionals.

The Family Office, Governance Structure, and Family Wealth

A governance structure refers to the framework, processes, and mechanisms put in place to effectively manage and oversee the family’s wealth, assets, and related decision-making. It outlines the rules, responsibilities, and procedures that guide how the family’s wealth is controlled, protected, and distributed across generations. It is crucial for the successful management of family wealth and preservation of the family enterprise. 

Family offices play a vital role in establishing and maintaining this governance structure, which often includes a governing board comprising of family members and independent, non-family members. Having a governing board not only ensures the efficient functioning of the family office but also provides a platform for addressing sensitive issues, fostering collaboration, and making informed decisions to the benefit of the family wealth. Moreover, it helps in promoting transparency, accountability, and adherence to the family’s vision and strategy.

Family Office Services: Beyond Wealth Management

Finally, family offices offer a myriad of services that go beyond traditional wealth management. These services are carefully tailored to the specific needs and preferences of each family. Being able to cater to the unique aspects of ultra-high-net-worth families is critical to ensure the larger vision and transfer of the family legacy succeeds. Family office services often include, but are not limited to:

  • Investment Strategy and Management: Formulating and implementing a customized investment strategy that aligns with the family’s risk tolerance, goals, and values.
  • Tax Planning: Providing guidance and strategies to minimize tax liabilities and optimize wealth preservation.
  • Estate Planning: Ensuring smooth and tax-efficient transfer of wealth to future generations while preserving the family’s legacy.
  • Philanthropic Planning: Assisting families in identifying and fulfilling their philanthropic objectives by establishing foundations, endowments, or other charitable vehicles.
  • Family Education & Multi-Generational Planning: Preparing the rising generation for wealth stewardship along with fostering a sense of responsibility and shared values across generations.
  • Lifestyle Management Services: Catering to various non-financial aspects of a family’s life, such as private schooling, travel arrangements, household management, and security.

Entrusting your family’s wealth, vision, and legacy requires a family office that values integrity and trust. A family office committed to building a relationship with you and your family over time is how you will achieve confidence in your and your family’s future.

Listen to our Legacy Builders Podcast

Beacon Family Office at Assante Financial Management Ltd. has a reputation for its unwavering commitment to ethical practices, client satisfaction, and dedication to building relationships through transparent conversations. Connect with Beacon Family Office today for a conversation and discover the peace of mind that comes from connecting with a trusted advisor.

The Differences Between a Living Will and a Last Will & Testament

The Differences Between a Living Will and a Last Will & Testament

by Estate Planning

Many people
confuse a living will with a last will
and testament. What’s the difference and
do you need both? Here we’ll dive into the differences between a living will
and last will & testament, and help you determine your options to keep you
informed.

Living Will

A living will is a
legal document that provides direct instructions regarding medical care when a person becomes seriously
ill or incapacitated and cannot communicate their wishes themselves. The
details often outline whether you want to receive artificial respiration,
intravenous feedings, and when to stop life support. You can also instruct
medical professionals to donate your organs and set limits on how much your
family will pay for certain expenses like medical equipment and funeral costs.

This type of will
does not go into effect until you become incapacitated, and it will last until
you either recover or pass away. At this time, the person you designated as Power
of Attorney will represent your wishes and ensure your directives are
communicated to the doctors or medical personnel.

One of the most significant benefits of creating a living
will is that it can help prevent disputes among your family members, as well as
high financial and emotional costs leading to emotional
strains.

Last Will and Testament

This legal
document, on the other hand, outlines what will happen to your personal assets
after death. That’s why it’s important not to confuse a living will with a last will and testament, because if you don’t
have this type of will, then the government will distribute your property upon
death. This process is called intestate. In a last will and testament, an executor
is chosen by the person drafting the will to carry out the details of it after
death. The executor is responsible for carrying out the probate process, which
includes paying any outstanding bills, debts, and taxes and taking an inventory
of your estate before distributing the assets to the beneficiaries.

Which is Best to Have?

Everyone should
have both types of wills. Each will ensure that your wishes are carried out,
whether you become incapacitated or not before passing. Otherwise, someone will
make the decisions for you.

No one wants their
family to undergo conflict or to have to make difficult decisions regarding
their life. It’s important to talk to an estate planner to help you put
together both wills so that your wishes can be properly
carried out. To learn more, contact us at The
Beacon Group of Financial Management Ltd. today.

7 Situations Where You Would Use a Codicil

7 Situations Where You Would Use a Codicil

by Estate Planning


A codicil is a document that’s used to update a will. It’s generally used when a person has already created an existing will but wishes to make small changes to reflect financial circumstances or lifestyle changes that could impact the estate. This document lets them make alterations without having to create an entirely new will. If you’re unsure when it’s best to use one or create a new will, we have outlined seven situations where you could use a codicil.

Marriage

In certain areas and provinces, you don’t have to create an entirely new will if you’ve been recently married — you can just add them to your current will through a codicil. Only in the case where you live in an area where a marriage voids a will, or if there needs to be a large number of changes made, should you create an entirely new will.

Divorce

A codicil is also used when you’ve gone through a major life transition such as divorce. When a divorce is finalized, it’s crucial to update your will through a codicil to avoid having your ex inherit your property or assets upon your passing. In some places, a divorce will immediately invalidate a will, so it’s important to talk with an advisor regarding your circumstances.

Change in Financial Situation

You may also wish to change your will to redistribute your wealth, give to charity, or provide a gift to someone. You can use a codicil in many of these cases to make any changes to your will without creating a new one.

Birth or Death

Whenever a family goes through a birth or death, you can use a codicil to add or remove those people from your will. For instance, if you’ve recently given birth or adopted, you can easily add these family members to inherit assets from your estate through a codicil.

Change of Executor or Guardianship

If your executor has passed away or decides they no longer want the job, you can easily name a new one in a codicil. You may also want to make a change to any named guardians if you undergo a divorce or if the person has moved away.

Change in Assets

Your old will may no longer represent your current wishes regarding the distribution of your estate. Instead of drafting a new will, you could use a codicil to express your new intent. This is highly useful when addressing the distribution of property that you forgot to mention in your original document or when you sell a property, business, or shares that were listed in your original will.

Adding or Excluding Beneficiaries

A codicil can also be used to add or exclude beneficiaries from the original will. A common example of this is when you want to add a grandchild to the will who didn’t previously exist.

Of course, there are also a number of scenarios when creating a new will is a better option than using a codicil. That’s why you should always talk to an estate advisor first.

How to Decide Who Should be The Executor of Your Will

How to Decide Who Should be The Executor of Your Will

by AgingEstate PlanningInheritance

When you create your will, one of the most important things you need to do is choose your executor. This is an important role that comes with the responsibility of taking care of the probate process, estate inventory, payments and notifications, final tax returns, and distributing your assets. You need to choose someone who is reliable, organized, and honest enough to carry out your estate exactly as you planned. To help you make a well-informed decision, here are some of the factors to consider when trying to decide who should be the executor of your will.

Family Dynamics

The majority of people prefer to choose a family member as their executor. While this can be a more comforting choice, it’s not always the right one. If your family is already experiencing conflict, then choosing one over the other as an executor will only lead to more problems. If this is the case, you may want to select a reliable friend or a third party to carry out your will.

Health and Resilience

Your ideal executor should be of good health and younger than you. They’ll also have the patience to carry out the lengthy process and deal with government agencies and the banks. Being the executor of a will is a truly stressful responsibility to — they need to be ready for that.

Proximity

It’s essential that the person who you choose lives in the same area as you. It’s not only easier to deal with the process when you’re close by, but it could also speed up the process. There may be regulations in place that will prevent you from choosing someone outside of province or state. It’s important to check with your local jurisdiction to find out what is required if you decide to go this route.

Experience

Although a degree in finance and accounting is not required to be an executor, it’s always wise to choose someone who has experience working with finances in some capacity or is willing to do the research. There will be a number of documents and tax forms that will need to be filled out, followed up on, and managed into the future, so it’s important to choose someone who is comfortable with bookkeeping and dealing with all the relevant agencies.

Deciding who to assign as the executor of your will is an important decision and one that should be given careful thought. At The Beacon Group of Assante Financial Management Ltd., we are dedicated to managing and securing the finances and assets entrusted by our clients. Contact us today to learn how we can protect your legacy.

Family Estate Planning

Avoid Family Estate Conflicts with These 5 Strategies

by Estate PlanningInheritanceLife Changes

It’s every parent’s dream to be able to pass along their legacy and leave something substantial and meaningful behind for their family. However, if you don’t tread carefully when creating your inheritance plan, you could end up inadvertently causing resentment between siblings and altering the family dynamic. To ensure everyone is happy and that you’re remembered exactly how you want to be, avoid family estate conflicts by using these five strategies.

Call Family Meetings

A simple way to avoid catching your family off guard with your inheritance decisions is to hold family meetings. Talking directly to your children about your plans and asking for their preferences can help prevent any surprises that may leave people feeling hurt or angry. Opening up the communication channels will allow your children to at least negotiate amongst each other. This could make it easier for you to distribute your belongings without causing any conflict to begin with.

Create Detailed Instructions

The majority of family arguments center around how the personal property is distributed when a parent passes away. You can avoid causing family drama over your belongings by creating a detailed list of instructions. This should outline in detail who will inherit what and then add it into your estate plan so that your executor can appropriately carry out your wishes once you are gone.

Adjust for Gifts and Loans

If you loaned money to one of your children to help with their tuition or a business, you should adjust for this when you plan your inheritance. If you don’t, one of your other children who didn’t need support may become upset feeling as if they’ve lost out.

Appoint a Mediator

Even when you’ve tried your best to please everyone, emotions run high during times like these. If there was a previous dispute between siblings or if this is your second marriage (or third) it may be wise to hire a third-party trustee who can mediate if a disagreement arises or conflict breaks out.

Have a Professional Create Your Estate Plan

Having a well thought out and strategically-formed estate plan ensures that your wishes are appropriately expressed. This allows you to provide adequate support and financial stability for your family in the manner you desired. When you work with a financial advisor, you’ll receive advice and solutions that help maximize your estate’s value, distribute your assets as planned, and minimize any taxes so that your beneficiaries receive the intended amounts. They’ll even help you leave a lasting legacy that you’ll be remembered for.

The best time to plan your estate is now. If you’re looking to create an estate plan that will create the most value and avoid family estate conflicts, we at The Beacon Group of Assante Financial Management Ltd. can help you. We’re here to help you understand how the decisions you make today will impact your estate in the future.

How Does Estate Planning Reduce Probate and Taxes?

How Does Estate Planning Reduce Probate and Taxes?

by Estate PlanningTax Planning

Do you know what happens to your estate after you pass away? After death, your executor is responsible for securing all your assets, paying your debts, and applying for probate. Although there isn’t an estate tax in Canada, there are other fees that exist to process and probate your will. And like all other debts, income tax has to be paid by the estate first, before people can inherit the assets. Luckily, estate planning can help to reduce the probate and fees associated with your will. Here’s what you need to know.

When is Probate Required?

Your executor will need to apply for probate if you pass away with any outstanding debts. This is also necessary if there’s property not being passed on to a spouse or common-law partner, or if there are any accounts or investments without a beneficiary. Probate is also recommended to prove the executor is the appropriate person to carry out your last testament and to provide institutions with the proof needed in case your will is contested. To apply, the executor will need to visit the province’s probate court and pay the necessary costs. Each province sets their own fees, which is usually a flat rate or a percentage of your assets. For instance, in Ontario, the probate taxes are calculated as $5 per $1000 of estate assets up to $50,000 and $15 per $1000 of estate assets over $50,000.

What Taxes Should Be Paid?

All income that is earned from the beginning of the year to the date of death is to be reported on the final tax return. This will also include any capital gains tax on your assets and taxes on your RRSP or RRIF. When you pass away, the government assumes you have sold everything and regards all of your assets as disposed of for tax purposes.

How Can Estate Planning Reduce Fees?

Implementing estate planning strategies can help to reduce the tax hit that will be left to your estate. For one, if you leave your assets to your spouse or create a joint ownership, you don’t have to pay capital gains taxes or tax on your assets. Moving assets outside of your estate by setting up a trust to hold legal title or a private company to own your assets will also ensure they will not go through probate. However, it’s important to note that each province has different rules and fees, so it’s always best to talk to a professional who can guide you through the process and ensure your state planning goes as intended.

At The Beacon Group of Assante Financial Management Ltd., we provide strategic wealth planning that is tailored to your individual needs. We can set up an estate plan that will reduce your probate and taxes and provide your family with the assets you had intended to leave behind. Contact us today to find out more about how we can help.

Managing Bad-Blood Between Your Heirs

Managing Bad-Blood Between Your Heirs

by Estate Planning

Every parent dreams of passing on a significant legacy to their children. However, their wishes often don’t materialize due to poor estate planning. Misconstrued details can leave a family in disarray, resulting in conflicts among the family. It’s important to plan properly and anticipate any conflicts that your estate plan could cause between your spouse and children.

Here are some steps you can take to reduce inheritance conflict and manage bad-blood between your heirs.

Create an Estate Plan

If you have not yet done so, now is the time to create a detailed estate plan. A well thought out plan can ensure that you provide the proper support and financial stability for your surviving heirs and make sure that your wishes are carried out exactly how you intended. Without an estate plan you can’t choose who your beneficiaries will be, who will administer your estate, or choose a guardian for your children – the courts will decide for you.

Hold a Family Meeting

You’ll be surprised to learn that many children don’t want to inherit their parent’s belongings. Some prefer just to receive cash, while others may want their inheritance to go to another. You won’t know your children’s preferences unless you ask them. Hold an open family meeting so everyone can talk and express their interests. This can help avoid conflict in the future.

Address Personal Property

Most bad blood between heirs is usually in relation to personal property and how it is distributed among family members. To avoid a family argument over your belongings when you’re gone, leave a list with detailed instructions. Outline who should inherit what item and add it to your estate plan.

Summarize Gifts and Loans

You may have loaned money to one of your children to buy a home, start a business, or avoid bankruptcy. But if you don’t adjust for this in your will, your other children may become jealous. To avoid any conflicts, always address and outline any loans or gifts in your estate plan.

Organize a Third-Party Trustee

Except in extreme circumstances, your spouse should be named the sole and primary beneficiary. In second marriages, however, it may be beneficial to appoint a third-party trustee to mediate any interests as stepparents and stepchildren may not agree on the terms. A parent who distributes all the money to the children may endanger the well-being of their surviving spouse. However, if they pass on the full inheritance to the stepparent, then they may be creating more bad-blood – especially if the stepparent distributes the money to their other children.

Update Your Plan Regularly

When there are any significant changes to your financial situation or major life changes like divorce, you should update your estate plan. A current and revised plan will help to avoid any unwanted results like passing on your assets to your ex-spouse instead of your new one.

Managing bad blood between your heirs can often be prevented with a good, updated estate plan. Make sure you get in contact with us at The Beacon Group of Assante Financial Management Ltd. about how you can get started and create a comprehensive plan that outlines your wishes.