How to Reduce A Family Battle from Exploding over Your Estate

Some discussion with children regarding their wishes while the parents are alive can help reduce feuds and upset. More than 30 trillion in financial and non financial assets is expected to pass from Baby Boomers to their heirs in North America over the next 30 - 40 years.

Aging parents have a challenge to evenly or fairly distribute wealth to their children without starting a fight amongst the family. It is the unexpected transfer of assets – everything from money to family heirloom that tears families apart. Ideally when a deceased person’s will is read no one in the room should be surprised. Parents should start having conversations with their children when they are mature enough to handle it. Parents should have a detailed list of their assets and find out if their children actually want the art, cottage, Florida home or other assets they plan to leave to them. Too often, parents keep the contents of their will a secret. Open dialogue and treating your adult children respectfully will help them understand what you are trying to accomplish with your legacy.

Recreational properties such as the family cottage carry a lot of emotional baggage within families. Children are often upset that the place of their childhood memories is to be sold and gone. Not all children maybe equally interested or have the financial, capacity to own a second property. Taxation of the cottage with respect to capital gains, valuations, legal fees to transfer ownership, and transfer taxes etc. are expenses associated with inheriting the cottage. Not all assets are valued equally and family law complications upon divorce of one of the children can compromise the ideal scenario that the cottage is left to all the children equally to use!

The risk of giving your children assets while you are alive is complicated by the greater life expectancy of Canadians. Baby Boomer seniors in Canada are living longer and could need the gifted assets to liquidate to fund their future retirement and long term care needs. Don’t give it away too soon. Make sure that your estate plan provides for your income needs and have a conversation with your children about your future care wishes, your assets and how you would like to distribute those assets.

People don’t plan to fail, they fail to plan!