Inheritance strategies – Planning tips for receiving wealth

Inheritance strategies – Planning tips for receiving wealth

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When a loved one passes away and leaves an inheritance to you, you may be filled with a range of emotions extending from intense grief to relief that some of the financial pressures you face are about to be lifted. Those mixed emotions can become even more confusing when complex wealth transfer rules come into play. To help you get through what can be a very difficult time, we’ve identified some planning tips you should consider if you find yourself receiving wealth.

HONOUR THE INTENTIONS OF YOUR BENEFACTOR
Sometimes a will specifically leaves assets to the deceased person’s child – not jointly to the child and his or her spouse. This is a way to try and make sure that a bequest is not subject to “equalization” if a marriage breaks down. However, the deceased’s intention can be frustrated by a son or daughter who invests the inheritance in the matrimonial home or other family assets that are not excluded from equalization claims. The co-mingling of inherited funds with other assets, so the inheritance can no longer be identified or traced, may also subject the money to equalization. Children can honour their parents’ intentions, and protect themselves in the event of a marriage breakdown, by making sure the inheritance remains separate from family assets, including the matrimonial home. Note that the legislation regarding property division upon marriage breakdown is specific to each province, so you should seek the advice of a legal expert when considering these issues.

To read this full article from Manulife Investments CLICK HERE. Should you have any questions or comments, please be sure to contact Harry or David.