Death and money are traditionally taboo topics. Yet, when we avoid discussing them, we may also fail to adequately plan for them, and that can lead to confusion, conflicts, stress and financial loss.

Recently, trust and estate lawyers Margaret O’Sullivan and Stephanie Battista presented our clients with two valuable wealth planning lessons that can help prevent such negative outcomes. They shared stories based on real life situations drawn from their years of experience assisting affluent families, including clear steps we can all take to protect ourselves and our loved ones.

Lesson #1: Have a contingency plan

Leanne* was a schoolteacher in her mid-40s with a teenage daughter. Her husband, Tim,* owned a successful IT business and took care of most of the household finances. When Tim passed away suddenly, Leanne was thrown into complete chaos. Not only were most of the family’s financial records hidden behind passwords on Tim’s computer, but his company’s payroll also was due in about a week, and she had no idea where to begin.

In hindsight, Leanne’s situation would have been much better with a personal contingency plan in place. Such a plan would have let her know who to contact, what cash and other assets the family owned, where they were located, and how to access them. She would have had all the names, passwords, account numbers and procedures she needed when Tim was no longer able to take care of the couple’s affairs.

Your personal contingency plan can be as simple as a document with the “who, what, where and how” for your family when they need it. Think about bank accounts, investment accounts, insurance policies, titles to real estate, and details about holding companies and trusts. Please contact us if you’d like a starter template that you can help you address all of this.

Lesson #2: Keep your affairs up to date

Catherine* was the executor of her father’s will, which stated that his assets would be shared equally between her and her late brother, Andrew.*  However, since Andrew was separated – but not divorced – from his spouse of 20 years prior, Andrew’s spouse was still legally entitled to his half of the estate assets.

Fortunately, the law pertaining to separated-but-not-divorced spouses is set to change in January 2022 to avoid such extreme situations, but the lesson still stands. It is essential to keep wills and powers of attorney up to date to ensure that your wishes are carried out the way you intended.

A good guideline is to review these documents every 3-5 years, or when there is a change in your circumstances, such as:

• The acquisition or disposal of assets
• Assets in new jurisdictions – such as a vacation property
• A change in marital status
• A birth or death
• Adding or changing a beneficiary
• A change in the law
• Please note there are many others that apply.

For example, if you drew up your personal will early in your career and you now own a holding company with significant assets, you may need a dual will plan to protect your corporate assets from a 1.5% probate tax if you were to pass away.

Another common situation is giving money to a child to purchase a home. Is this an advance on their inheritance? Do you need to equalize it to be fair to your other children? Whenever there’s money in motion among your family members, you might want to consider how this can impact your estate plan.

A growing trend among Canadians is to purchase properties abroad. Whether the property is in the US, Costa Rica, France or Mexico, you should be aware that even something as simple as opening a bank account outside of your home country may require an update to your will in order to avoid potential issues down the road.

Your Cumberland Portfolio Manager can help you identify these wealth planning opportunities, review them with you and confidently recommend the right estate, tax and legal experts to help you address your given situation. Often times, a significant change in your circumstances will also trigger the need to review of your investment portfolio. When these moments occur, we are here to assist you. It’s all part of our commitment to help grow and protect your wealth for future generations.

*Not their real names