As baby boomer generations age, many are thinking about succession and estate plans. But are their children and grandchildren prepared to manage the inheritance they will be left with? For many young people in Ontario, receiving such a large sum can be daunting, and knowing what to do following estate administration can be challenging. Here are some tips to consider.
The first thing to consider after inheriting a large sum is smart financial planning. While buying a cottage or boat might be tempting, consider debt repayment and investments first. Those who inherit assets such as real estate or stocks rather that liquidated money should also look into whether it is financially wise to sell these assets or keep them in their current form.
Those who are inheriting a great deal of money or assets may see their net worth increase significantly in a short period of time. This should motivate inheritors to consider their own estate plans. Those who have not written a will should do so after receiving an inheritance, while those who have pre-existing plans may wish to revisit them based on their newly acquired wealth.
Estate planning and financial issues is considered a taboo topic by many, leading many Ontario families to avoid important conversations until it is too late. Clear conversations about inheritance and expectations involving planners, executors, and their next of kin can help to ease estate administration and guide financial planning after they pass. A lawyer can also be a helpful person to include in both planning and administration discussions.