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10 things People get Wrong when Planning their Estate

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Avoid common estate planning mistakes that can complicate inheritance, taxes, and family decisions. Learn what Canadians should review before retirement.

Image Adobe Stock via Logical Position

By Dan Coconate

Special to Financial Independence Hub

Estate planning can feel like a task for another day, particularly when retirement already brings decisions about income, investments, housing, and lifestyle. Yet an estate plan affects far more than what happens to your assets after death. It can also shape who manages your finances during incapacity, how efficiently your estate moves to beneficiaries, and how much work falls on family members.

For Canadians approaching or enjoying retirement, the strongest plans usually come from looking at the entire financial picture rather than treating a will as a standalone document. There are many things people get wrong when planning their estate, from stopping at writing a will to choosing an executor solely due to familial ties. Avoiding these mistakes can help make your wishes clearer and reduce unnecessary complications for the people who eventually carry them out.

1.) Thinking a Will is the Entire Estate Plan

A will plays a central role in estate planning, but it does not cover every situation. A will generally takes effect after death. Other documents and arrangements address what happens while someone is still alive but unable to manage financial or personal matters. Powers of attorney, beneficiary designations, insurance policies, jointly held assets, and trusts may all form part of the larger picture.

It’s best to plan for both a will and appropriate powers of attorney as part of preparing financial affairs for later life. The distinction matters because an estate plan should address both asset distribution and continuity during incapacity.

2.) Assuming every Asset passes through the Will

A will does not automatically control every asset a person owns. Certain assets may transfer according to their ownership structure or beneficiary designation rather than instructions in a will. Registered accounts, insurance policies, jointly owned property, pensions, and other financial arrangements can require separate consideration.

That makes an asset inventory valuable. List financial accounts, real estate, insurance, business interests, investments, debts, and significant personal property, then determine how each item would transfer.

3. Choosing an Executor because they are the Closest Relative

Another thing many people get wrong when planning their estate is who they choose as an executor. Naming an executor can look like an honorary gesture, but it comes with serious responsibilities.

An executor may need to locate assets, protect estate property, deal with creditors, handle tax matters, complete legal procedures, and distribute property to beneficiaries. The executor is a key figure in administering the estate and carrying out the deceased person’s wishes.

The best choice may not be the eldest child or nearest family member. Consider financial ability, organization, availability, location, and willingness to handle the work.

4. Forgetting to Plan for Incapacity

Estate planning should not begin at death. Illness, cognitive decline, or an accident can leave someone unable to manage banking, investments, bills, or property. Without the correct legal authority in place, relatives may discover that family relationships alone do not give them the right to take control.

For example, in Ontario, even a spouse or family member does not automatically gain authority to manage another person’s property when that person becomes mentally incapable. The terminology and rules differ across Canada, so residents should review the appropriate documents for their province or territory.

5. Treating Beneficiary Designations as a One-time Decision

A beneficiary designation made many years ago may no longer reflect current intentions. Marriage, separation, divorce, deaths, births, retirement, and changes in family relationships can all alter what makes sense. A beneficiary on an old account can create an unpleasant surprise if the rest of the estate plan has changed, but the designation has not.

Review beneficiary information whenever a significant life event occurs. A periodic review during retirement can also reveal outdated forms before they create a conflict.

The important point is consistency. The will, financial accounts, insurance arrangements, and broader estate strategy should work together rather than point in different directions.

6. Assuming Trusts work the same way everywhere

Trusts can play an important role in some estate plans, but Canadians should be careful when reading general financial information in another country. Terms such as “revocable living trust” appear frequently in U.S. estate-planning discussions. Canadian tax treatment, probate rules, trust law, and estate administration can differ considerably by province and from American practice. Continue Reading…

The alternative to the 4% Rule isn’t a different number. It’s a different mechanism.

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By Stefano Starkel

Special to Financial Independence Hub

Ask for an alternative to the 4% Rule and most people offer you 3.5%, or 5%, or a dynamic band. Those answer the wrong question. The rule’s most important feature isn’t the number: it’s the assumption buried in its first sentence.

William Bengen’s 1994 study said this: Withdraw about 4% in year one, adjust that dollar amount for inflation, and across the worst U.S. sequences he tested no portfolio was exhausted before 33 years. He has revised it upward since: to roughly 4.7% in his 2025 book. The number was never the fragile part.

Notice how you get the cash. You sell. The 4% Rule is a selling rule, and most Retirement calculators inherit that frame: the portfolio is the only lever, drawing it down the only way to reach it. So “what’s the alternative” is really two questions: a smarter way to size withdrawals, or not drawing the pile down at all?

Why the number isn’t the weak point

The fragile part of a fixed-withdrawal plan is Sequence-of-Returns risk. I run a leveraged, income-oriented book myself, and I’ve watched how brutally the order matters.

Round numbers: A $1,900,000 portfolio. $76,000 withdrawn at the start of each year, held flat, then that year’s return applied. (The real rule inflates the withdrawal; flat isolates the sequence effect, and understates the damage.) Two retirees, same three returns, opposite order.

Same returns, same withdrawals, and B finishes about $80,000 behind: a gap that compounds with every subsequent return. The reason sits in year two: B took that $76,000 from a portfolio already down to $1.28M, a 6.0% bite against A’s 3.5%. Selling a fixed amount into weakness turns a paper dip into spent-and-gone principal. Over a full retirement, that early-sequence damage is what empties portfolios: not the headline rate.

Changing the mechanism, and what it costs

One family keeps selling, but flexibly: guardrails soften Sequence Risk at the cost of variable income. Still decumulation.

The other changes the mechanism: borrow against the portfolio rather than sell it, so the assets stay invested and nothing is forced to be realised in a downturn. This is what people mean when they say the wealthy never sell. It is not a free lunch : and for a Canadian reader, considerably less free than the American version.

The loan is callable. FINRA’s mandated margin disclosure is blunt: the firm can sell your securities without contacting you, you don’t choose which ones, and you aren’t entitled to extra time. Canada is no gentler: TD Direct Investing tells clients it may sell holdings “potentially without any prior notice,” and decide which. That is the bottom-of-the-market sale the strategy exists to avoid, arriving on the broker’s schedule. Continue Reading…

Before you Decide: Should I own Individual Stocks?

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Image created with ChatGPT by Lowrie Financial

 

By Steve Lowrie, CFA

Special to Financial Independence Hub

The first investment I ever made was an individual stock. At that time, there were no apps or online accounts available to make this purchase. Instead, I walked into a local brokerage office, opened an account in person, sat across a desk from a stockbroker and asked him to place the trade. By the time I received the confirmation slip in the mail, roughly half of my money was gone.

What stays with me is not the loss. It is that nobody asked me anything. Nobody asked why I believed that company would do well, what would happen to my plans if I were wrong, or how much of my savings I was prepared to put behind a single idea. The order was placed, the confirmation arrived in the mail, and that was the whole of the advice. I am not certain I would have welcomed those questions at the time, since I was young and overconfident, but I have thought about them for more than thirty years and I have asked many people those same questions.

The reason they still matter is that the conversation itself has never changed. It is hard to get through a dinner or a business event without someone describing a stock they bought years ago that has gone up substantially, and what we rarely hear about is all the other stocks they bought that went nowhere. That is not because anyone is being dishonest. It is simply how memory works. We keep our winners close, we enjoy talking about them, and the disappointments quietly fall out of the story.

The stock name changes. The story never does.

There are good reasons to own stocks. Over long periods they have been one of the most effective ways to grow wealth and protect purchasing power from inflation. So the more interesting question is not whether to own stocks, but how to own them. Should you try to identify a handful of winning companies, or own a broadly diversified pool of them through mutual funds or ETFs? After more than three decades of watching Canadian families succeed and fail at this, my answer is direct: for almost every investor, there is no financial planning reason to own individual stocks. I am not saying you should never own an individual stock. I am saying the decision deserves a good reason. In my experience, most investors have never been asked to supply one.

Why is Picking Winning Individual Stocks so Difficult?

The challenge is not recognizing great companies after they have succeeded. It is identifying them beforehand, when their future is still uncertain and their share price already reflects everything millions of other investors know and expect.

Research by Arizona State University professor Hendrik Bessembinder shows just how difficult that is. In Do Stocks Outperform Treasury Bills? published in the Journal of Financial Economics, he examined the lifetime returns of every U.S. common stock since 1926 and found that the best-performing 4 per cent of listed companies accounted for the entire net wealth creation of the U.S. market above one-month Treasury bills. Slightly more than four out of every seven individual stocks did not even match the return of a Treasury bill over their lifetimes. That deserves a second read, because it means most individual stocks are not merely disappointing. Most individual stocks did worse than holding cash. Nor is this only an American phenomenon. Bessembinder and his co-authors extended the work to more than 64,000 companies worldwide and found the same pattern outside the United States.

The point is not that the stock market is a bad place to be. Over the long run it has rewarded investors generously. The point is that the reward has been concentrated in remarkably few places, which changes what you are actually attempting when you buy a handful of companies. You are not making a modest bet with slightly unfavourable odds. You are trying to locate a very small number of names inside a very large field, in advance, with a share price that already reflects everyone else’s best guess. Bessembinder tested exactly that by simulating single-stock selection repeatedly, and the single-stock strategy underperformed the broad market in 96 per cent of those simulations.

So why does anyone keep doing it? Because nothing ever tells them to stop.

You do not have to lose money for stock picking to fail. You only have to earn less than you would have earned by owning the broad market. An investor can make money every single year, comfortably ahead of any fixed-income alternative, and still be quietly falling behind the entire time. The statements look fine. There is no line item for the return you did not earn, no alert when the gap widens, and nothing that ever prompts a review. It is the most expensive kind of loss precisely because it never announces itself.

A broadly diversified portfolio removes the guessing. You will own plenty of disappointing companies along the way, but you will also own the small number of extraordinary ones, because you own all of them.

If an Individual Stock I bought went up, does that mean it was a Good Decision?

Not on its own, and this is where the first article in this series does the most work. There I made the case that a good decision can produce a bad outcome and a bad decision can produce a good one, and I offered a test for telling skill from luck: could you lose on purpose? In a game of skill you can deliberately play badly and reliably lose. In a game of chance you cannot.

Apply that test to stock picking. If you set out tomorrow to deliberately choose the worst-performing stocks in the market, could you reliably do it? Almost nobody can, and that tells you a great deal about how much skill is actually available in the activity. The answer is the same whether your last pick went up or down. So if you put a significant portion of your portfolio into one company and watched it appreciate, you may well have seen something other investors missed, or you may equally have taken a risk you did not need to take and been lucky enough to have it work out. The return by itself cannot tell you which one happened.

This matters because success changes behaviour. A winning stock reinforces our belief that we have some ability to spot winners, and once we believe that, there is no reason to change what appears to be working. I have watched that sequence more times than I can count, and it almost always runs in the same direction. The winner is rarely the last decision. It is the decision that funds the next, bigger one.

Am I taking a Risk I do not need to take?

Concentrating wealth in a few companies introduces company-specific risk, which we call uncompensated risk in investment jargon. In plain English, it is a risk that can largely be diversified away, so there is no reliable reason to expect a higher return simply for bearing it.

Concentrated portfolios can certainly outperform diversified ones, sometimes by a great deal, and that has never been in dispute. The question I would ask is a different one: do you need to take that chance to get where you are going? If a diversified portfolio already gives you a reasonable probability of accomplishing your goals, then any additional risk that could jeopardize them should clear a very high bar. In my experience, very few of them do.

Is a Canadian Portfolio as Diversified as it looks?

There is a second concentration problem that most Canadian investors never notice, and it sits underneath the first one. The Canadian market is not a balanced market. It is dominated by financial services, meaning the large banks and insurers, and by resources. Rocks and trees, as it is often described. Entire sectors that make up a large share of global markets, including technology, health care and consumer businesses, are only lightly represented here. So a portfolio invested entirely in a Canadian index is already a concentrated bet, even though it holds hundreds of companies and carries the word diversified on the label. Continue Reading…

Gold or Silver? How to prepare for what comes next

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By Andrew Sleigh, Sprott Money

Special to Financial Independence Hub

When people ask me whether they should start with gold or silver, my answer depends largely on where they are financially. If you’re dealing with tens or hundreds of millions of dollars, you’re generally going to come in heavily with gold, although I still think you need silver.

For the average Canadian or American with less than one or two million dollars in assets, I would establish a position in silver coins first and then supplement that with gold. There’s no perfect percentage. You can fine-tune your gold and silver allocation as you become more educated and understand what each metal is supposed to accomplish. The important thing is building the position before everybody suddenly decides they want physical precious metals at the same time.
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Why I would Start with Silver Coins

People ask why I recommend silver coins instead of 100-ounce silver bars, especially when bars can have lower premiums. My answer is transactability. If all you own are large bars, how are you going to handle smaller transactions if silver ever needs to function as money? I made this mistake myself. When I started buying physical silver, I bought seven 100-ounce bars. I knew I wanted physical metal, but I didn’t yet understand which products made the most sense. After listening to people who had been stacking for decades, I exchanged those bars for coins.

My basic approach for somebody starting today would be:

  • Establish a position in recognizable silver coins first.
  • Add physical gold as the overall position becomes larger.
  • Move into 10-ounce or 100-ounce silver bars after you’ve accumulated enough coins.
  • Don’t concentrate everything into denominations that could be difficult to transact with. The objective isn’t simply getting the most ounces for the lowest premium. It’s owning precious metals in forms that could actually be useful when you need them.

Not every Ounce of Silver is Equal in the Real World

I used to believe an ounce was an ounce and bought whichever silver product was cheapest. Then I realized it’s not only about what I understand about silver. It’s about what the person on the other side of the transaction understands. I’ve encountered people who were only comfortable with Canadian Silver Maple Leafs because they recognized and trusted them. An experienced precious metals owner may happily accept a generic one-ounce round, while somebody less familiar with silver may want a Maple or, in the United States, a Silver Eagle.

That’s why I want a mixture that gives me options:

• Recognizable sovereign silver coins for people who want something familiar.
• Generic rounds for people who understand silver and simply care about weight and purity.
• Larger bars only after I’ve established enough smaller denominations. If precious metals ever become more commonly used for barter, recognizability could become almost as important as the silver itself.
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Why I’m concerned about the Financial System

I see substantial risk in the conventional financial system, particularly in currencies and long-duration bonds. As interest rates rise, older bonds paying much lower yields become less attractive and can lose significant market value if they need to be sold. At the same time, governments across the West continue running enormous fiscal deficits. Canada has this problem, the United States has it, and Europe has it. To me, we’re watching currencies compete in a race to the bottom.

When gold and silver rise in dollar terms, I don’t necessarily look at that as the metals suddenly becoming more valuable. I also look at what is happening to the currency they’re measured in. You can see declining purchasing power every time you go grocery shopping. If governments continue expanding deficits and pursuing inflationary policies, I believe protecting purchasing power becomes increasingly important. That’s a major reason I want physical gold and silver rather than relying entirely on paper assets and currency.
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Why Silver Demand could become Enormous

Silver is particularly interesting because it has both monetary and industrial demand. There are already numerous industries competing for physical silver, including

• Electrification and renewable energy.
• Electronics and advanced technology.
• Automation and robotics.
• Global manufacturing.
• Defense and military applications.

Then you add investors who want physical metal because they’re increasingly concerned about the financial system. It doesn’t take the entire population buying silver to create shortages. If even a relatively small additional percentage of people suddenly wants physical bullion, retail inventories can tighten very quickly. We’ve already experienced periods when dealers struggled to source products such as Silver Maples and 100-ounce bars. The public tends to assume they’ll always be able to buy physical metal whenever they decide they need it. I don’t make that assumption. I’d rather accumulate gradually while it’s readily available.
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Physical Metal isn’t a Short-term Trade for me

If your objective is trading gold and silver price movements, physical bullion probably isn’t the most efficient vehicle. Premiums and spreads can eat into short-term trades. That’s not why I own physical metal. For me, physical gold and silver are first and foremost about wealth preservation.

I think people need to separate two completely different objectives:

• Trading precious metals: Trying to profit from short-term movements in gold and silver prices.
• Owning physical precious metals: Protecting purchasing power and keeping tangible wealth under your control.
If silver substantially outperforms and you sell everything to lock your gains back into dollars, you’ve put yourself back into the currency you were trying to protect yourself from. Physical metal gives me wealth already in my possession or under my control. I don’t have to sell a financial product, receive currency, and then hope I can convert that currency into something tangible during a crisis.
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Gold and Silver still have Monetary Value

I’ve talked to people who have already used precious metals for barter in private transactions. I once asked a gentleman shining my shoes at the Toronto airport whether he would accept silver as payment. He immediately said yes. One silver coin represented too much value for the shoe shine, but the point was that he recognized the value and was willing to accept it.

You’re probably not walking into a major grocery chain today and paying for groceries with Silver Maples. But that doesn’t mean precious metals have lost their monetary characteristics. If confidence in conventional currencies or payment systems deteriorates significantly, I think recognizable gold and silver could play a much larger role in private transactions. That’s another reason I want smaller-denomination silver rather than having everything concentrated in large bars.
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How I would prepare with Gold and Silver today

Physical precious metals aren’t completely risk-free. Prices fluctuate, premiums matter, and bullion needs to be stored securely. That’s why I believe in nibbling away rather than trying to perfectly time one enormous purchase.
If I were building a position today, my priorities would be:

• Build a foundation of recognizable physical silver coins.
• Gradually add gold as the amount of wealth being protected increases.
• Add larger silver bars once enough smaller denominations are already owned.
• Keep some physical cash available for immediate expenses.
• Think carefully about secure storage.
• Don’t advertise what you own or where you keep it.

I’m not trying to perfectly trade every move in gold and silver. I’m trying to preserve purchasing power and maintain tangible wealth under my control. Financial problems can develop inch by inch and then seemingly happen all at once. I’d rather prepare incrementally while gold and silver are available than wait until everybody else reaches the same conclusion at the same time.

Andrew Sleigh is a Sales Representative at Sprott Money with over 32 years of financial industry experience. After beginning his career as an insurance broker in 1991, he became an independent financial broker, providing financial planning, investment, insurance, and benefit solutions. In 2017, Andrew shifted his focus to bullion and precious metals, helping individuals and businesses understand how hard assets can play a role in wealth preservation.

Time for Core (Plus) Bond Portfolios Again?

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By Christy Tan and Lukasz Labedzki, Franklin Templeton Institute

(Sponsor Blog) 

Investment Implications

We see growing evidence suggesting that investors should consider moving from a short-duration bias toward core (plus) bond portfolios. This is largely predicated on the fact that valuations have become more attractive across fixed-income sectors, with all-in yields approaching compelling levels. Our guidepost remains 10-year Treasury yields near the upper end of their recent range. We continue to believe that this is a market for an active, selective approach.

Please see our sector views below.

Central banks: We have a new Federal Reserve (Fed) chair, and if we take him at his word, it feels
like a new environment has begun. The rhetoric is hawkish, reinforcing that the 2% inflation target is
by no means soft. Importantly, there’s also a strong push for no forward guidance, with the market
invited to react to incoming data as it sees fit. That likely means a higher-volatility environment and,
all else equal, a higher risk premium demanded by bond investors. As a result, all eyes are now on
the data. If the data fails to confirm moderating inflation, the market will demand Fed action. If the
data does confirm it, the market can justify a pause. In both cases, longer duration can perform
well. The risk is the Fed policymakers talking but not acting when needed: that would make the
bond market angry. We see the risk-reward of extending duration as improving and are happy to do
so at certain yield levels.

US Treasuries: Our view is that 10-year Treasury yields will remain broadly range-bound, which
means the closer they get to 4.75%, the more attractive it becomes to move into intermediate
duration. We believe it is reasonable to begin extending duration around those yield levels.

Developed markets credit: Historically elevated investment-grade bond issuance that the market
needed to absorb widened spreads from their tights to levels closer to fair value, while the broader
fundamental backdrop remains healthy. Supply should also slow in the second half of the year. In
the high-yield space, spreads have also widened somewhat. We remain biased toward higher-rated
issuers in high yield. All-in yields are attractive and provide resilience across a range of scenarios.

Emerging market (EM) debt: While it has been the best-performing fixed-income sector
year-to- date, we think it’s time to be more selective. In local-currency EM debt, Latin America
has been the top performer (as we highlighted), and we expect this to continue. As a stronger US
dollar remains a risk, in our view allocations should be balanced with US dollar-denominated EM
debt, which is less sensitive to currency moves.

Euro bonds: As mentioned previously, we believe German Bund yields (Europe’s benchmark
government bond yields) will remain broadly range-bound. They closely track expected mone-
tary policy, which has recently been driven largely by gas prices. With Bund yields above 3.1%, we
find them attractive for medium-term investors. Hedged yields for US dollar-based investors are
on par with US Treasuries, meaning there is little opportunity cost to global diversification.

Performance Snapshot

Global fixed-income performance has remained largely uninspiring this year, with the Bloomberg
Global Aggregate Index still slightly underwater. Relative performance has been stronger in
emerging market debt, particularly US dollar-denominated debt. The picture is more nuanced in
local-currency EM debt, which we discuss later. US high yield has also outperformed. Within
higher-quality fixed income, US short-duration strategies have also held up relatively well. These
are essentially the sectors we have been highlighting throughout the year.


US Treasuries

We believe benchmark 10-year Treasury yields will remain broadly range-bound, and investors should take advantage when yields are close to the upper end of that range (~4.75%). Recent history (Exhibit 2) suggests this strategy has worked well and remains our playbook for the second half of 2026.


Of course, yields could move higher, but at these levels we view the risk-reward as favorable and do not see a high risk of yields moving significantly above the recent range over the coming months. The main reason is that a lot is already priced in: the market expects more than two Fed hikes over the next 12 months,1 while the current term premium (the risk premium in bond jargon) is close to 70 basis points (bps),2 versus a recent high of around 90 bps. A meaningful move above 5% in 10-year Treasury yields would likely require a further significant repricing of both monetary policy expectations and the term premium.

The major risk is that the Fed turns more hawkish than in our base case. We acknowledge this risk, but we also think that realized hikes could, in fact, cause longer-duration bonds to catch a bid, as they would demonstrate a strong commitment to fighting inflation and could lead to a repricing of growth expectations.

For conservative mandates, we continue to view short-duration bonds as a portfolio pillar. They are highly resilient across scenarios: two-year Treasury yields would need to rise above 9% before investors started losing money, assuming a one-year investment horizon (Exhibit 3).

Developed Markets Credit

The major story in credit markets lately has been investment-grade (IG) bond supply, driven in part by hyperscaler borrowing. More than US$1.2 trillion3 of IG issuance came to market through the first six months of the year: well above historical norms (Exhibit 4). Continue Reading…