This morning's papers all carry a stories talking about how the next couple of generations all stand to inherit trillions. The Boomers stand to inherit from their "frugal and real-estate rich" parents, and are expected to have trillions to pass on to their children. The "average" inheritance is expected to be around $280,000.00 ($CDN)
This is not news to most estate planning practitioners. Furthermore, most of the articles that I've read on the subject talk a lot about whether the Boomers will actually have all of this money to give when they die, but are relatively silent on how to set up a proper estate plan so as to facilitate this transfer of wealth in the easiest way possible.
There are tax issues that need to be considered, not only with respect to the type of property that is going to be transferred (capital gains, here we come!), but also with respect to how the wealth is transferred to the beneficiary. For example, if your estate is large enough (e.g. each of your beneficiaries stands to inherit at least $300,000.00), you can set up testamentary trusts in your will that can minimize the amount of tax that your adult beneficiaries will pay on their inheritance. In Alberta, we are fortunate that we don't have to worry about shielding assets from any estate or inheritance tax, but most people still want to make sure that their beneficiaries - not the government - receive the most benefit from their estate.
Articles like these also serve to create a sense of entitlement among those who expect that they will be receiving substantial sums from their parents' estates. I'm sure every estate lawyer has heard this phrase several times, "But my Mom/Dad had a lot more money than what my brother/sister is saying. I just know it!" They usually have no proof, other than a few off-the-cuff statements from Dad or Mom, but they have little hesitation in creating a lot of animosity within the family because of such beliefs. Yes, there are times when the brother/sister has hidden or spent or absconded with the money, but sometimes the money just isn't there. In the meantime, they spend thousands of dollars on lawyer fees arguing with their siblings.
An estate plan, if improperly done, could mean that the lawyers "inherit" most of the money while the beneficiaries try to sort everything out. This is often an unintended consequence of an individual who doesn't trust lawyers trying to (a) set up everything themselves; and/or (b) basing their choice of legal practitioner on who charges the least rather than who knows the most in this particular area.
Good estate plans, particularly when we're talking about this much wealth and the varied types of assets, cannot be bought in the book aisle at Superstore. You need to speak with a professional experienced in estate planning to ensure that your family inherits your wealth, not the lawyers or the government. And always remember that what you'll pay now for that advice will pale to what your estate will pay later if you don't.