The Goldie Company

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Canada's Wealthy - Passing it on to the next generation

I am sure you probably saw the article Canada’s Wealthy Refocus article in the Globe & Mail Report on Business Friday November 8, 2013 where they talked about the economy and Canada’s wealthiest etc. written by Noreen Rasbach.

To paraphrase from the article: Canada’s wealthy refocus. As the economy stabilizes, they worry less about preserving their fortunes and more about passing them on to the next generation. Who are Canada’s most wealthy and how did they get that way? Financial institutions – as well as luxury brands and charitable campaigns are increasingly seeking answers to these questions as they go after the ultra-rich.

The list of Canada’s most wealthy people reveals some familiar names (Jim Pattison, Frank Stronach), but 4,922 people in Canada fit in the super rich or ‘ultra-rich’ category last year. The data does not break down how they made their money, but most rich clients fall into three categories: business owners or entrepreneurs, business executives or professionals. Another growing group is new Canadians who are looking to extend their businesses here.

The wealthy, in general face more complex financial challenges, but their biggest concern is the same as everyone: “They say, I want to make sure we’re going to be okay.”  That is achieved with a wealth plan that looks at investments and etstate planning, everything from wills to tax strategies to philanthropic giving. The oldest baby boomers are beginning to test retirement. They are drawing up estate plans that take into account the fact that their assets lie in a number of provinces and countries, as do their children.

Today, the discussions and focus is different. Conversations are less about capital preservation but more about other things like tax strategies and efficiencies, estate planning. Parents are worried that the wealth they transfer to the next generation will be cashed in to pay off debt. Of the respondents, who had investable assets of at least $1 million (excluding their principal residences), 49 percent said they were concerned about whether their children were ready to successfully manage an inheritance, and 25 percent worried their children may take the money for granted.

Surprisingly, despite their wealth 39 percent said they did not have an estate plan in place and 22 percent had not yet considered one!