Personalizing your estate plan
The Wealth Transfer Conundrum
In dealing with clients for over 3 decades, you learn what is important to each client when it comes to leaving a legacy.
When you combine multiple marriages and blended families with soaring estate values due to high real estate and share values, matters can get complex.
Wills and probate are very public, time consuming, and can be challenged under the Wills Variation Act.
Trusts are expensive to set up and administer and have ongoing tax filing requirements.
What is Personalized Estate Planning?
Hughes Wealth Management focuses on investments that allow clients to appropriate funds to specific individuals without going through the probate process.
This personalized form of estate planning is done through investments offered by Insurance companies (examples below):
- A Guaranteed Interest Annuity (GIA) is a term deposit that can range from 1 to 10 years (depending on the age of the client). These investments can pay a monthly income.
- A Segregated Fund ("SegFund") is a mutual fund that can have named beneficiaries and is a great estate planning tool for passing on wealth to the next generation.
Case Studies
Ex. Mr. and Mrs. Smith have a large and somewhat complicated estate which may take some time to pay out to their 4 children.
Solution: Mr. and Mrs. Smith can place a sum of money into a GIA or SegFund and name their children as beneficiaries. Upon the death of the last survivor (either Mr. or Mrs. Smith), these funds will pay out to their children within 3 weeks of signing a claimant’s form.
By utilizing a GIA or SegFund, Mr. and Mrs. Smith's children will have access to funds immediately - which may make settling their overall estate easier.
Ex. Mr. and Mrs. Jones are in their 70’s and both have children from previous marriages. Mr. Jones wants to make sure Mrs. Jones has income for her life, but when she passes on, the assets go to his children.
Solution: purchase a SegFund or GIA. Start a withdrawal program (i.e. $5,000 per month), name Mrs. Jones as a successor annuitant and Mr. Jones' children as beneficiaries (irrevocable). As a result, Mrs. Jones will receive income until she dies and the remaining assets will be passed on to Mr. Jones' children.
