Intergenerational wealth transfer or succession planning will be a daunting job, but when began early and included as a common a part of monetary check-ups, it doesn’t should be.
Trent Hamans, vice chairman of personal banking and wealth planning with ATB Wealth, likens wealth transfer planning to creating a good meal.
“Having successful intergenerational wealth transfer is really much like having a great meal,” says Hamans. “You need to have a great recipe, great ingredients, and you need to have a great chef.”
If any of these three elements don’t work properly, then the meal will likely be mediocre. The identical precept applies to profitable intergenerational wealth transfer, says Hamans. (Story continues beneath participant)
Recipes are usually written, and for wealth transfer, a will, private directive or healthcare doc, an everlasting energy of legal professional, and a unanimous shareholders settlement are all good written elements to have in place, explains Hamans.
“Only about 60 per cent of Canadians have a will, and it’s never too early to have a will done, it’s sort of like an insurance policy,” says Hamans, including that after a individual turns 18 or 19, they need to have a will in place.
The substances for profitable wealth transfer imply having some consciousness of belongings — enterprise or investments — and figuring out what liabilities could possibly be incurred to a different individual.
“Estate planning and wealth transfer events are not just about assets and liabilities, they’re about relationships so you want to make sure you have great relationships with your family or whoever you want to have those wealth transfer events with,” Hamans says. Have conversations and preserve speaking.
The chef who makes the nice meal is truly a variety of individuals — attorneys, accountants, and the executor of the property will all present help for profitable wealth transfer and succession planning.
“Estate planning is important at any age, and it’s not a destination or a point in time, it’s a journey, so it’s really important that this be part of your financial routine,” Hamans concludes.