How to approach estate planning issues

When it comes to settling estates, horror stories abound - siblings now estranged because one received a coveted heirloom, children from a first marriage being completely left out in favour of the new partner's offspring, the much-loved family cottage sold to pay taxes. These horror stories can affect wealthy and average Canadians alike.

Many people are uncomfortable talking about money. When the topic of money is combined with the possible death of a loved one, the discussion is bound to be emotionally charged. And it's emotion that often stands in the way of effective estate planning.

Adult children may be afraid to look like "gold-diggers," interested only in their parents' wealth. Parents may be reluctant to make decisions or explain their intentions to their children. But the benefits of openly discussing estate planning far outweigh any temporary discomfiture.

An ideal time to discuss your estate plan with your adult children is while you are preparing your will. This provides an opportunity to find out what your children's expectations are regarding the estate, and whether these match your intentions. It will also give you a chance to explain the rationale behind your decisions - especially important if the estate is to be distributed unequally.

Encourage your adult children to establish their own estate plans. When they purchase their first home or have children, you might want to ask what provisions have been made for the new family's security.

On the other side of the coin, as a potential beneficiary, your challenge is to discuss your parents' estate without appearing overly eager to inherit it. One effective approach is to take the first step yourself. Talk over your own estate plan with your parents and ask their opinion. This may naturally lead to a discussion of your parents' plan. If your parents seem to have no formal estate plan, explain why it is so important and walk them through the steps you took to arrive at your estate plan.

Discussing death is never easy. It helps to remember that having these discussions now will make it easier to settle the estate in the long run.

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The information contained herein is considered accurate at the time of posting. CIBC and CIBC World Markets Inc. reserve the right to change any of it without prior notice. It is for general information purposes only.

Clients are advised to seek advice regarding their particular circumstances from their personal tax advisors.