As I was reading the Financial Post, I came across an interesting article entitled, What Will You Do With Your Estate? In this article, Jonathan Chevreau explains that there are two schools of thought when a parent is deciding how to plan their estate.


On the one hand, some parents believe in transferring the wealth that they have accumulated during their lifetime to their children. On the other hand, some parents believe in “dying broke”. Although it sounds harsh, parents from the second school of thought, often follow the belief that their “kids should stand on their own feet.”


Most of us will fall in between the two extremes; however in his article, Mr. Chevreau reviews the strategies associated with both schools of thought. 


Parents who wish to maximize their estate often don’t like to leave their kids with any debts. Parents from this camp are more likely to “Commute the value of their death benefit pensions in order to maximize RRSP assets … wipe out any lien’s on their residence … give an inter-vivos gift to their children and pre-pay their funeral.”


In the other camp, parents leaning towards the “die broke” philosophy often try to maximize their assets during their lifetime by using three main techniques: pensions, annuities and reverse mortgages. The nature of all three is to maximize income for the parent and their spouse during their lifetime, while leaving little or nothing for their children.

Wherever along the spectrum you fall, it bears discussing your estate plan with your spouse, kids and a good financial planner or estate planning expert.

Rick Bickhram – Click here for more information on Rick Bickhram.