Today, I’ve got a Bow Tie Tale that’s as cautionary as they come. Picture this: a successful doctor diligently builds an impressive investment portfolio, dreaming of leaving a lasting legacy for her family and community. But what happens next is a classic case of an estate planning mistake that leads to the loss of that very legacy. In today’s Bow Tie Tale, I’ll illustrate the repercussions of squandering a legacy passed to the next generation. Join me as I explore how one simple misstep can derail even the best-laid plans, and most importantly, how to avoid falling into the same trap.
Video Transcript: Estate planning mistake means legacy lost
In today’s Bow Tie Tale, I’m asking:
“How can you avoid squandering a legacy passed to the next generation?”
I’m George Dube,
Saving the world from tax
One bow tie at a time™.
Estate planning mistake – squandering a legacy
Some of the biggest cautionary tales I see with estate and retirement planning have to do with squandering the legacy passed to the next generation.
For instance, a successful doctor had built an impressive investment portfolio in a company. When she passed away, her children inherited the portfolio. But it was at a time in life when they didn’t need the money and were not interested in passing the funds to their adult children. They just wanted to get hold of the money and enjoy it now. And, instead, they squandered the legacy of their mother, losing well over a million dollars… lost, prematurely, in taxes. The legacy she created was wasted and unavailable for the futures generations, and her community.
Now, I’m not here to tell people what they should and shouldn’t do with their money, or how they should enjoy their lifestyle. But, I will tell you the implications of your choices, and show you the possibilities of taking other paths.
The first meeting
I walked into the first meeting with the family after the passing of their mother thinking I was going to be a hero. I was going to show them how they could save over $500,000 per child – yes, half a million dollars per child. And, this was just to start! Yes, admittedly, it involved a little complexity. But, my team could have managed this for them.
However, they wanted no part of this. Instead, they wanted simplicity and the cash in hand. And, taking that path meant losing that $500,000 per child, money their mother had spent a lifetime earning.
The lesson: Don’t leave your estate plan to chance
The lesson in this estate planning Bow Tie Tale?
You might think I would say the lesson is:
Keeping it simple can come at a huge sacrifice. We’ve had many stories it seems of keeping it simple and the costly perils.
However, the bigger lesson is:
If you don’t want your legacy squandered, you MUST HAVE an estate plan. Don’t leave it to chance, or in this case, to the whims of your kids and grandkids.
I always recommend to my clients that they start mentoring the next generation – and make it a formal process. Additionally, if you know your kids are going to spend your money quickly after you’re gone, do you really want to sacrifice and build for them? Maybe you’d spend a little more on yourself or family earlier in life.
Think about building a legacy for your grandchildren, your community, and your charities instead of, or in addition to, your kids. Involve your kids, and maybe grandkids, in meetings with your advisors. Then your family can see what you’re trying to accomplish, and your intentions for when you’re gone. Thus, you can have a better chance of preserving the legacy you have built or are building.
Conclusion
Thanks for joining me!
In every Bow Tie Tale, I’ve tweaked the details to keep things confidential, but the lessons are pure gold when it comes to helping you save on taxes, grow your wealth, and craft your legacy.
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Until next time, remember—I want to help you Do Wonderful Things™!
-End transcript-
Resources
For additional resources related to estate and legacy planning, see:
- Estate planning for real estate investors in Canada: The ultimate overview
- What advisors should be involved in your estate planning process?
More questions?
Still have questions? I want to help you Do Wonderful Things™, so please contact me today.
Remember – circumstances are unique! This information is summary in nature. Seek out advice from your tax advisor about your specific situation.
