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Canadians Worry About Costs of Liquidating Property, Separation Fund Offers Convenient Alternative

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With $400 billion expected to be inherited over the next decade, Canadians clearly have a lot to think about. Especially when this wealth transfer involves a legal process called probate, it often involves unnecessary fees and complications. However, a lack of knowledge about inheritance procedures has prevented Canadians from fulfilling their end-of-life wishes. That desire often includes a desire to transfer a large inheritance to a loved one as quickly and easily as possible, according to a recent Canadian government survey. His RBC insurance on real estate plans.The good news is that most respondents believe in inheritance

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“Because segregation funds are an insurance product, they avoid probate entirely. They avoid fees and taxes that can siphon up 10% or more of your wealth.”

Selene Soo, Director of Wealth Products at RBC Insurance

Planning is key. The not-so-good news is that they are often reluctant to talk about it, even with their loved ones and financial planners. For Selene Hsu, Director of Wealth Products at RBC Insurance, the results are a familiar mix of optimism and concern. It’s good that Canadians recognize the importance of their property plans, but their reluctance to discuss it with others is a persistent problem. In a recent interview with Wealth Professionals, Su discussed the findings and outlined potential solutions that could save significant time and money.

A survey of 1,500 Canadian adults aged 18 and over by RBC Insurance revealed a number of problems, including a lack of knowledge about the estate planning process, probate and solutions that can help them reach their goals. Canadians worry about imposing a costly and complicated process on others to settle their wills, but they don’t always know what happens to their money when they die, and they probably don’t know what happens to their property. I’m thinking of alternatives that could save me money while making planning a little easier. discuss.

A separate fund provides a way to avoid legal disputes over wills and make inheritance more efficient for everyone. Segregated funds, such as RBC Guaranteed Investment Funds, not only offer the growth potential of mutual funds with guaranteed principal, but also avoid the costs and complexities associated with traditional wills. “Because the segregation fund is an insurance product, it avoids probate entirely,” Soo explains. “They avoid fees and taxes that can siphon 10 percent or more of your fortune, and instead of taking months or even years for probate, distribute the proceeds to your loved ones in a matter of days. In addition to saving time and money, segregating funds provides other benefits. As Soo points out, “The will is an official document and can be viewed by anyone for a small fee, but the segregated funds are not part of the will and are therefore completely private. Ultimately, even though transparent discussions about real estate plans are encouraged, it is understandable that in some cases people may want to limit this transparency with their loved ones.

With 20 years of experience in wealth management and insurance, Soo is an expert when it comes to navigating the financial landscape of real estate projects. But Sue also has personal experience with her own family, which helps her understand some of the emotional hurdles that more than half of survey respondents said were reluctant to discuss inheritance. ing. Su stresses that there are two certainties in her life: death and taxes, and inheritance only happens to accommodate both. Talking about them is not easy, but the conversation needs to happen sooner or later. “My parents were always open about their inheritance plans,” Su says. “But it’s hard because I don’t want to think about their mortality.” Sue said her reluctance to discuss inheritance was based on her own family experience and years of observation of others. I believe there are four steps he can take to overcome.

1. Be thoughtful. Take time to consider who should be present and where the discussion should take place. Some people are better off in person, while others are easier over the phone or via video. 2. Don’t be surprised. Tell people what you want to talk about inheritance planning. Hold family meetings to create an atmosphere that prepares people for potentially awkward discussions. 3. Use sensitivity. Just because you’re ready to discuss these things doesn’t mean others will. 4. Small steps. When people are feeling uncomfortable, take one step at a time. Perhaps let your loved one know the location of important documents and see if the discussion develops from there.

“My parents reviewed the will months ago and discussed the details with my brother and me. It was difficult and emotional, but in the end it was a good discussion. Since they told us, we now know how to act on their wishes.” Each person and each family is unique. You may live with a common-law partner, you may have stepchildren or lifelong dependents, but you want to make sure they are taken care of. You may be a small business owner who wants to protect his estate in the event of bankruptcy, or a single person who wants clarity on what will happen to his property. It may be important for you to leave something behind for charity. Or you may feel that you cannot give much to yourself. Wherever you are in life, it’s important to plan what you want your property to do when you’re gone, alleviating the stress and complexity of loved ones liquidating their property. While it’s a tough subject involving laws, taxes, and awkward conversations, RBC’s research also found that people who openly discuss estate planning are more likely to be confident about the legacy they’re leaving for their loved ones. rice field. With the help of a financial advisor and cost-effective solutions such as segregated funds, estate disputes can be made less difficult than necessary. And the best time to start is today.

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Selene Sue
Conversation of an old couple.Inheritance

What do Canadians think?

discuss inheritance

Published May 15, 2023

“My parents reviewed the will months ago and discussed the details with my brother and me. It was difficult and emotional, but in the end it was a good discussion.”

Selene Soo, Director of Wealth Products at RBC Insurance

Selene Sue

Source: RBC Insurance

reluctance to discuss their intentions with others

51%

I want to minimize my out-of-pocket payment costs

86%

of Canadians want to avoid unnecessary real estate fees

87%

Canadians and their territories

Little or no knowledge of the probate process

61%

I don’t know that insurance will reduce inheritance tax

57%







of Canadians do not openly discuss their inheritance

37%



Percentage of Canadians over 55 not openly discussing their inheritance plans

42%



Percentage of Canadians over 55 say their finances are private

38%



of Canadians say that discussing their financial problems with family causes infighting

twenty one%



of Canadians say their spouse/partner is unfamiliar with their estate planning

34%



of Canadians say their financial planners aren’t familiar with their estate planning

51%

87% of respondents want to avoid unnecessary inheritance tax 86% want to minimize out-of-pocket settlement costs 61% have little or no knowledge of the probate process57 % don’t know insurance can reduce inheritance tax 51% don’t know I feel comfortable discussing my will with others

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news

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investment

means

highest wealth

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people

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author

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Copyright © 1996-2023 KM Business Information Canada Ltd.



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