“It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for.”
—Robert Kiyosaki

According to RBC Wealth Management, the Canadian baby boomer generation is slated to transfer an astounding $150 billion to their heirs as early as 2026. In all likelihood, you’re part of this movement of generational wealth, but the question is: how can you best prepare yourself, your family, or even your clients for this change and define your legacy?

The best way to influence the future is to engage with it today. Here are a few ways to think about what kind of legacy you want to establish for your family.

The Largest Wealth Transfer to Date

While the $150 billion is nothing to scoff at, the Canadian wealth transfer is dwarfed by the U.S. projection—nearly $68 trillion is set to transition from one generation to the next.

The sheer volume of value changing hands is intoxicating, and without proper planning, it could be damaging. There’s a reason why lottery winners often burn through their cash: they’re just not prepared for the sudden change. You, on the other hand, can be.

Family Day Discussions

To define your legacy is to admit that you won’t be around forever, and that’s not exactly an easy thing to think about.

Preparation is a great ally when it comes to inheritance, and transparency is the key ingredient for knowing what to expect. With Family Day recently passing by, this is a reminder that there’s always an opportunity to broach these topics with your heirs.

People are understandably apprehensive about these important conversations, and it may have something to do with popular culture. Think back to your favourite movies that involve inheritance—they’re purposefully dramatic, with the head of the family only opening the discussion in their final moments.

It creates a high-stress environment, which is great for television, but not so much for real-life applications when the family is already dealing with quite a bit. Hollywood takes liberties, but preparation takes time.

Take Time

Rather than drop everything all at once, dole it out over time. By easing your heirs into the discussion, you can soften the concept and replace distress with reason.

Introduce what you want to leave behind gradually, and revisit the conversation often. While every family is different, here’s a theoretical playbook:

  1. “What’s important to you? What could I do to make that a reality?”

  2. “Where do you see yourself in 20 years? Where do you want to be? How could I help bridge that gap?”

  3. “What aspect of my life or achievements do you value?”

  4. “How can I prepare you for your inheritance?”

  5. “Do you even want the cottage? Can you afford it?”

  6. “How will we divvy up my rental properties? Who will handle the tax liability?”

  7. “Do you know how to access my important financial documents?”

  8. “Let’s talk about what happens when I’m no longer here.”

Again, each family has its own circumstances. Some might need to consider how to handle the cottage; others might be more concerned about continuing the family business. But the point stands—imagine how that jarring final statement would be without any of the previous questions being asked.

Warming up your family to the idea has several benefits, such as helping them anticipate the change, plan for the future, and uphold your wishes.

It may even change your decisions for the better. These conversations are more than just a chance for your heirs to prepare for the future; they’re a chance for you to do the same thing. If you know one of your children isn’t interested in the family cottage (question #1) and sees themselves travelling the world (question #2), it wouldn’t make much sense to leave them a property they won’t use as much as their sibling (question #3).

Defining Your Legacy

We’ll do our best to avoid the somewhat cliché (but timely) statement that “there’s no better day than Family Day” to discuss your family’s future because, in reality, any day is a good day to start.

In your later years, circumstances change, and you'll need to consider your income requirements as well as tax implications. These are topics for another day, but in the spirit of this article, they’re concepts that should be discussed openly with your family—the best stories typically take place when all the main characters are on the same page.

We’re here to help you write one that you and your loved ones can be proud of.

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© Bellwether Investment Management Inc. 2024. This communication is intended for residents of the provinces in which we are registered and is not meant to be a solicitation to any persons not resident in those provinces. Any opinions expressed in this article are just that, and are not guarantees of any future performance or returns. Some of the information contained in this article has been drawn from sources believed to be reliable but due to the fact that it is provided by a third party, it cannot be guaranteed to be accurate or complete. Bellwether Investment Management Inc., Bellwether Estate and Insurance Services Inc. and Bellwether Family Wealth cannot provide tax advice and therefore we recommend that you consult your tax advisor for further assistance with your tax planning and the preparation of your tax return. The report is prepared for general informational purposes only and the securities mentioned in this report should not be construed as a recommendation for any specific securities.

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