You have worked hard and are fortunate to have built a great amount of wealth either in your business and/or career. You have had a financial plan prepared for you that indicates you will likely pass on a significant amount of assets to your heirs. You have one daughter and an estate of more than $10 million that you will pass on to her.
Does your daughter need the full $10 million? Will it positively – or negatively – impact her life? If it isn’t a business that is passing to your daughter, then it makes for an easier decision. Let’s assume it is various assets that are all personally held.
First, make sure you get a professional opinion on, and analysis of, any taxation issues in your estate. There are good planning strategies available to help mitigate the tax bite or at least ensure that your estate will go where you want it to go.
Second, if your daughter doesn’t have strong financial acumen and is someone who might not manage the money well or even squander it, then perhaps you should consider planning to not leave her a lump sum but rather, an income for life. That way she is guaranteed to not outlive what you give to her or be taken advantage of by someone else.
Finally, I always encourage my clients to make a difference in someone’s life by selecting a charity or cause that really matters to them. This gives you an opportunity to really serve to another level without jeopardizing your daughter’s financial well-being. If you aren’t sure who or what to support, really give thought to where you might want to leave part of your estate.
Keep in mind that none of this planning would make any sense for you unless you’ve done a full financial plan to see what your financial future looks like. Please speak with your financial advisor to ensure that you’re on the right track now and moving forward to ensure that your financial needs and wants are met, including looking after the people and causes you care most about.
Clifford A. Wiegers, CFP, TEP, CH.F.C., CLU, B.Comm.
Insurance Representative, Wiegers Financial and Insurance Planning Services Ltd.
Financial Planner, Manulife Securities Investment Services Inc.