Toronto Estate Law Blog : Toronto Estate Lawyer : Hull & Hull Law Firm : Trust Mediation and Succession Planning : Serving Ontario, Ottawa, Mississauga, Hamilton

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Within the next twenty years, Canada's baby boomers are in line to inherit a substantial fortune, which will represent the largest transfer of wealth from one generation to the next.

In an article written by Jennifer Power Scott and published in Canadian Living, Ms. Scott discusses the  bittersweet bonanza that many heirs face and cautions the impulsive spender: "There are a lot of people in this world who might go out and blow the whole thing in a week, and that's not appropriate. Unless you're well-heeled to begin with, flushing the funds into trips to Las Vegas, sexy cars and plush home theatres probably isn't the smart way to go."

In her article, Ms. Scott stresses the importance of carefully planning what to do with your inheritance, so that your inheritance can turn into a gift that lasts. Ms. Scott urges those who have received a windfall inheritance to:

1. Take a breath. Put your inheritance somewhere safe that earns a good guaranteed rate of interest for a few months while you think things through
2. Once you are ready to make a decision, speak to a certified financial planner
3. Consider your option, such as satisfying outstanding debts, investing into an RESP for your children, or an RRSP or RRIF for yourself

Essentially Ms. Scott's article forces her readers to consider their long-term goals as opposed to their short-term goals. "It pays to step back a little bit. Some people will immediately say, I've got this money, I don't deserve it all, and maybe I should start helping out my kids right away. But they need to make sure that their financial future is properly secured before they do that."

Thank you for reading, and have a great day,

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

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Growing up, I used to watch Perry Mason television movies and dreamed of becoming a top litigator, regularly eliciting confessions from the ‘real criminal’ during courtroom trials full of intrigue and suspense.  As a law student and then practicing litigator, I quickly learned that there is a world of difference between trials and the legal system as depicted on (usually) American television, and the daily workings of the Canadian legal system. Sadly, I still cannot boast of any “You can’t handle the truth!” moments during my cross-examinations. 

A recent article in the National Post examined the influence of U.S. legal shows on Canadians, and noted that most Canadians do not understand the basics of our own legal system. In a recent high-profile Toronto murder case, a key witness’ testimony during the trial did not match what she had earlier told police. When asked if she understood what it meant to commit perjury, the witness indignantly answered that she knew what perjury was as she watched “Judge Judy” and “Judge Mathis”. As noted in the article, the “CSI effect” has led to an expectation among jurors that forensic evidence will solve a case. There may also be a “Law & Order syndrome” that leads to false impressions regarding courtroom procedure and legal concepts. For example, many Canadians may be shocked to learn that lawyers appearing in a Canadian court must usually wear gowns (but not wigs á la BBC legal dramas). 

The article notes that more legal education in our high schools may help counter the misleading influence of U.S. legal shows. Perhaps another Canadian legal drama like “Street Legal” could also help more Canadians learn about their own legal system.

Thanks for reading,

Bianca V. La Neve - Click here to learn more about Bianca La Neve.

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Sara Crosbie, a writer with the Globe and Mail, recently published an article on the succession planning crisis looming over Canadian family businesses. In her article, Ms. Crosbie refers to a study completed by Deloitte and Touche, which indicates that two-thirds of Canadian families have no written contingency plans to guide them through a disability or death.

To understand the importance of family businesses to the Canadian economy consider the following study which was completed by Deloitte and Touche and found that “family businesses have 4.7 million full-time employees, 1.3 million part-time workers and sales of around $1.3 trillion.”

Ms. Crosbie states that the lack of succession planning could be attributed to the idea that most parents think, “there's nothing here to pass on”, but the children think, “actually, I'm quite interested in taking it on.” 

Dr. Pramodita Sharma attributes the lack of succession planning to the fact that “money and mortality conversations don’t usually take place until the head of a business is gravely ill. By then, it’s too late to start talking.”

Regardless of the cause, the consensus on resolving this looming crisis is rather simple, communication. Dr. Sharma says “Succession planning is either passing to the next generation of your family, passing to employees … selling it, to be merged or acquired by someone or it could be closing the business down.  That needs preparation, too. You want to get the maximum value out of the business so it has to be a pro-active succession plan. You don't want death to be the succession plan.”

Thank you for reading and have a great day.

Rick Bickhram

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