Tag Archives: wills

Generational Business Transition: The Apprentice

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By Ian Campbell

Special to the Financial Independence Hub

Synopsis

Love, hate or tolerate U.S. President Donald Trump know that the business-focused reality show he personally hosted for some years was not named “The Apprentice” without careful thought. No doubt that also was true of his hiring several of his children into his businesses.

Over the past 50 years I have advised many “strong personality” owners of both small and very large privately held companies on matters involving business valuation and transition. That experience suggests business owners – likely in combination with more than one advisor – often work to include one or more of their children in management positions in their businesses.

While there are exceptions, in my experience nepotism infrequently works as well as it is planned. That said there are some sparkling successes, where the latter often lead to successful multi-generational business transition – and long-term family business legacies.

So what high-level reasons cause private business owners to hire younger family members – effectively creating an “apprentice environment” – and to often do that when they themselves are in their “prime business years?”

This commentary explores those reasons: none of which are particularly complicated, and none of which are hard to understand in the context of family business owner aspirations.

Family business transition defined

In this article “generational business transition” means the transition of business ownership – and often management – to one or more succeeding generations. Multi-generational business transition means business transition beyond two generations.

Principal “family hire” reasons summarized

There are always exceptions to generalities. Further, in the case of family business transition senior family generation members in control of a family business may make wrong-headed assessments of next generation children or make ill-conceived business management related decisions about one or more of them for over-emotional reasons or simply as a result of bad judgment.

Continue Reading…

Estate Planning For Couples: You Can’t Take It With You

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According to an Ipsos Reid poll commissioned by the CIBC, only 30% of Canadians have a formal estate plan in place. The reasons for not having one vary – some people think they are too young, or don’t have enough assets. Some believe that their belongings will automatically go to their spouse. Many couples think they have lots of time, and some just don’t want to deal with it.

Everyone needs to plan for the inevitable.

Estate planning is for your loved ones and for your own peace of mind. It means arranging how you leave your money and property when you die and it must follow the laws of the province you live in (or where the property exists).

Estate planning involves:

  • writing your will and naming someone to be responsible for carrying out your wishes
  • distributing assets during your lifetime as well as upon your death
  • arranging insurance to cover costs and provide for your survivors
  • specifying who will handle your affairs if you become unable to manage them yourself, and giving them direction through a power of attorney and medical directive.

Estate planning for young families

When you are raising a family, and are just starting to accumulate assets, consider these steps: Continue Reading…

What happens to your TFSA upon death?

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Human mortality seems to be the Hub’s theme today. This morning we posted Lorne Marr’s 20 tips on getting life insurance without having to take a medical exam first.

Subsequent to that, my latest MoneySense Retired Money blog looks at the topic of estate planning as it related to Tax-free Savings Accounts (TFSAs). To access the full blog, click on the highlighted text here: Why your TFSA needs a Successor Holder.

We had mentioned in an earlier blog that TFSAs were excellent vehicles for estate planning and minimizing tax of families as a whole. See How TFSAs can aid your Victory Lap.

We also said that it’s by far preferable for couples to name each other Successor Holders on their respective TFSAs. Otherwise, things get pretty complex, which is what the MoneySense blog goes into in some depth.

TFSA succession planning often not well understood 

Sandy Cardy

The blog is based largely on input from Mackenzie Investments and a brochure it published entitled What happens to your TFSA at the time of death?, which you can access in full by clicking on the link. It also quotes regular Hub contributor Sandy Cardy, who was the head of tax and estate planning at Mackenzie when that brochure was published. In that role, she was responsible for educating the financial advisors who sell mutual funds on estate planning, including its role in TFSAs. As she notes in the MoneySense blog, this topic of TFSAs at death is not well understood even by some financial professionals.

These days, following her own brush with cancer in 2012 (she’s fine now) Cardy blogs as much on health as she does on Wealth. See for example, a recent Hub blog titled The Mind-Body Connection: How Stress Affects Your Health. Her website can be found here, and you can find her estate planning “novel” by clicking on this  highlighted title: The Cottage The Spider Brooch and The Second Wife. 

Book Excerpt from The Wills Lawyers: The Knife in Dad’s Heart

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I will be one of four speakers tonight at The Financial Show in downtown Toronto. Three books will be distributed, including Findependence Day and The Wills Lawyers. The authors/wills & estates lawyers provided the Hub with a sample excerpt of their book below, a sad little tale that starkly reveals the need to have a will in place before the inevitable occurs. As it has already been published, we have not altered the text.  — JC

Les&BarryBy Les Kotzer and Barry Fish, The Wills Lawyers

Special to the Financial Independence Hub

It’s not as if Kayla and her three brothers had always gotten along with each other; but when Dad’s health started to go downhill, all four siblings agreed amongst themselves that in Dad’s presence, they would never argue and would never speak of sickness or death. All they agreed to speak of in his presence was the upbeat, the comical, only those special warm subjects that make people happy. Continue Reading…