Planning Your Estate

I have been designing an estate planning program for presentation to the members of a local church. As always the problem is to make it simpler. I think I could present it if I excise 90% of the material. The question of course, is which 90%.

It’s hard.

There seems to be two parts.

  1. The estate distribution plan which most people get readily enough, and
  2. The estate accumulation part which seems easy enough too.

The joining is where the subtlety appears.

Mistakes made in the accumulation part can easily make the distribution part difficult, more costly, and more time consuming.

So it matters and controlling losses is a place to begin.

There are two kinds of costs

  1. The estate costs include many things like a funeral, legal, probate, valuation fees, executor fees, and income taxes. There are other less visible costs and demands on estate assets. Things like negotiated discounts, paying off debts that previously rolled over, providing security for guarantees, and bequests to charity or others.
  2. The cost to have the assets appear in the estate at all. Some ways are more efficient than others. Life insurance can add liquidity and size cheaper than other ways. Liquidity matters when you see the volume of cash the executor will need to do their job. The client will learn about good money, money with minimal tax and other costs, and bad money like an RRSP which is fully taxable.

The essential detail

Everything Mom and Dad own will end up being spent during life, left to heirs, or lost to taxes and other costs. Emphasis will be placed on mimizing costs, the cost of acquisition including opportunity cost, and the cost to have assets in the right form for transfer.

Whatever is lost can neither be spent nor left to others.

A good estate plan addresses problems in advance

It provides:

  • An equitable division of property
  • Minimization of costs and taxes
  • Enough iquid assets to meet unavoidable obligations
  • Completion of a plan of business ownership and management succession, and
  • Optimal income and security for the living

Most estate problems have solutions, but you need to start early to benefit.

I help business owners, and professionals understand and manage risk and other financial issues. To help them achieve their goals, I use tax efficiencies and design advantages to acquire more efficient income and larger, more liquid estates.

Please be in touch if I can help you. 705-927-4770

3 Comments on “Planning Your Estate

  1. In 2013-14 being a young diplomat and starting a new family one thing we always thought about was getting our own house. As Continued working my new post assignment I would rely on my smartphone and apps to make work easier from note apps, scanners, photo shop, etc… I came across a new flashy red app on Apple store that specialised on estates around the US but was fairly new it didn’t have much in the listing but a handy search engine that would locate and register properties you find interest in buying. I immediately started promoting the app in social media and it began to build its listing quite rapidly as we extended its market over Facebook, google and Twitter initially. Fastforward, the app is now a giant network of realtors that cover all US States called Redfin. Working and residing in the Philippines, what u thing is the best approach in claiming my rightful stakes in the company? Would be grateful if I can assist me on how to properly proceed in securing some properties?

    • An interesting question. Any response to this is based on factors other than finance. I have two thoughts. One legal, one personal.
      1) I doubt RedFin will see the world the way you do. Their success is reasonably based on hundreds of factors. Promotion is but one of them. They will argue your contribution is one of many doing the same thing, perhaps not as well. It is possible they would respond to you, but I doubt they will. Failing their involvement you have no positive approach legally.
      2) Look on the other side of this. You have learned quite a lot about recognizing a business with future potential. That is the hardest part of investing. When you are young it is a reasonable move because you will often be wrong but have time to recover. As you grow older, you tend to move towards proven businesses. Further you have learned how to communicate an idea. Again a useful skill. Thirdly, I expect you have received some personal satisfaction form the effort. Some people you have interacted with no doubt had good experiences and can credit you to some extent. Focus on what you have that you can use in the future.

      All in I think you life will move ahead with less stress and regret if you look to the positives and recognize that while RedFin may owe you something, there is no practical way to enforce that condition.
      Perhaps a letter to the CEO is worth while. You might get a response, but I would not count on it.

      Thanks for being in touch

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