Retirement Mistake No.33: Common Mistakes in Wealth Transfers
Posted In: Retirement Planning for Entrepreneurs

Estate planning and wealth transfers are just like planning a trip: Leave proper instructions, including keys, to people you trust. If  you have been an executor, you know the kind of  patience you need in dealing with an estate. Rarely is it easy; and when it is, something usually gets missed. Leaving an estate to family members can cause more problems than you might think. Family disputes can be avoided with careful, well-thought-out planning.


I usually recommend that parents discuss with their children their general intentions–not specific dollar amounts. Another great idea I picked up along the way is to create an estate binder, a file containing relevant documents for the executor. This would include copies of  important documents such as the will, insurance policies, property titles, investments and banking info. Include important contact information for any tax, legal, financial, and insurance advisors.

Your executor will lose sleep if you have no will or if it cannot be easily located. Hey, make it simple to find if you have one. What if  your family does not know it is in the safety deposit box?

Also a problem is when there are no declarations in the will in regard to gifts. If you plan to leave gifts, make sure all are clearly spelled out in your will.

Make the most of your final tax return. Assets that are jointly owned with children do not form part of the estate. If there are assets being bequeathed, is that done in equal proportion for each of the children? Or did one child receive an additional part outside the will as a joint account holder?

Lack of records or disorganized records is a common problem for executors and family members. To simplify, you could make an up-to-date statement of all investments with a note such as, “These records are up to date as of June, 2009; you do not have to search every bank in Canada to find out where our money is.” Communication and a bit of record keeping may help you and or your executors sleep better.

Never confuse motion with action. – Benjamin Franklin


Published with permission from Grant Hicks

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