JAMES - A RECENT WIDOWER
One day it happened. James’ spouse passed away and now the estate needed to be dealt with.
Up to then, James and Nora had kept their finances separate, and had named each other as executors for each other’s estate. They had no children.
No one can completely prepare for the emotional toll and financial stress that comes from grieving a loved one while also administering their wishes with their estate.
At The Haefling Wealth Advisory Group we do our best to prepare the executor to understand the role they will have and the work involved in implementing the wishes stated in the will.
James - settling his wife's estate
James was faced with some important financial decisions in settling Nora’s estate.
Working as a team
- Should he maintain three properties?
- Was their sufficient income after tax to maintain his lifestyle?
- How to minimize tax?
We worked with his accountant to make his tax liability as low as we possibly could and worked with James to determine which property would become his principal residence. Surplus properties were sold with the assistance of a trusted real estate professional.
Thinking about his estate
James and Nora did not have any children and James had only one older sister. The experience of being an executor made James seek other options to being his sister’s executor and also who should be the executor for his estate as well as a Power of Attorney.
James felt strongly that the burden of being an executor was not one he wished to put on his sister’s shoulders.
We met with BMO Trust to discuss using a Corporate Executor and setting up new Power of Attorneys. We referred him to a local lawyer as his previous one was about to retire and they helped to prepare the new legal documents to ensure his wishes were met.
A legacy to reflect his wishes
James had a desire to give back and we established a Trust that would make annual donations to a number of charities that were special to both him and his late wife.
Including extended family
The next step for James was to request to be removed from the role of executor for his sister’s estate. We met with James and his sister, amended her will and appointed BMO Trust to be the corporate executor for her estate.
Proper legacy planning is a conversation with family
Having an essential conversation with your family will help to give a peace of mind and likely feel less stressed about the impacts your situation will have on loved ones. By preparing when possible it can pay huge emotional and financial dividends later.
BOB - A BUSINESS OWNER
A small business owner was being faced with the selling of one of his companies and what the tax liability of this transaction would be. He was refereed to us by his Business Banker and we sat down and created a Financial Plan to look at some recommendations for the proceeds from the business sale, whether he would need to replace any income personally with the sale of his business; and whether retirement was feasible in the upcoming years.
Like many small business owners he had reinvested his profits up to this point back in his business and properties. Investing outside his business was new. We spent time to educate the client on his choices.
We worked with his accountant to determine the savings that he could achieve by maximizing his RSP contributions for him and his spouse as well as TFSAs to shelter income going forward. We were able to significantly reduce his tax liability and do some tax and income planning for future years.