A car only rich people could afford

Wealth: we all chase after it. We all want to be debt-free, worry-free, and provide for our family and friends.

People are grappling with high inflation, stagnant wages, skyrocketing housing, and working “side hustles” to pay the bills. Did you know that even wealthy people are feeling this way? In 2023, 59% of what could be described as “affluent” U.S. citizens, feel secure in their assets. Compare this to the whopping 72% of Americans who felt the same, just a year before that, in 2022.

The wealthy are like us: worrying about rampant inflation. They’re not investing, they’re not taking risks with their money: they’re holding on to it, which could be a sign of how shaky the economy is right now.

The wealthy are saddled with substantial debts: they (much like the average joe) is struggling to pay off their mortgages, car loans, and wipe out their credit card balances. Yes, they probably struggle less than the average joe to pay their debts off, but struggling to pay off debts may lead to excessive borrowing. Just like the average joe, the wealthy too, should avoid maintaining credit card debts and pay off loans they have as soon as possible (easier said than done.)

One of the most pressing concerns for wealthy Americans is how much they have saved for retirement. Not just retirement, but their overall estate planning, which includes: paying taxes, paying off loans, ensuring that you have good life insurance, managing issues surrounding health, etc.

These are all things that people across every generation should think about, even cash-strapped Millennials and GenZ.

Taxes are going to become a concern heading into 2024: many taxes could increase in U.S. households. There are a number of taxes from 2016 that are set to expire in 2026. This means that taxes would increase for a number of families. Getting creative with estate planning is the answer.

One way to get around these tax cuts is to gift large trusts to children and other family members.

Hopefully, you’re off to a good start in 2024. You may be able to increase your wealth if you follow sound advice and do your research on estate planning.

The iconic French brand

Hermès. You know the brand name. The name that evokes images of rich women walking around with fancy purses. Purses that cost more than a yearly salary.

The makings of an iconic French brand

Who is Nicolas Puech?

What is the Isocrates Foundation?


The French brand that is a household name

The iconic French brand is definitely a luxury brand that only a few can afford. Founded in Paris in 1837 by Thierry Hermès, the brand began as a harness workshop catering to European noblemen. It was once known for creating well-tailored saddles, riding gear, and leather accessories. These were all items only the rich could once afford.

The tradition of catering to the rich carries into 2023; Hermès caters to women who can afford to live in the lap of luxury. Prices for their bags can range from a mere $6,000 to a whopping $31,000 (and higher.) It’s known as being the brand for creating the iconic Kelly Bag and Birkin Bag. Hermès is also a brand known for creating fancy scarves and perfume.

Who is Nicolas Puech?

It should be no surprise then, that Nicolas Puech, a descendant of Hermès, has (an approximately) WHOPPING $12 billion dollars in his name.

Puech purportedly owns a 5.7% stake in Hermès. There was an explosion of interest in the brand’s products after the pandemic (people wanted to spend again): the demand for products increased the value of the brand to nearly $230.8 billion. This means that Puech’s stake own stake in the company is worth around $12 billion dollars.

The 80 year-old was initially going to give the massive fortune to the Isocrates Foundation, a foundation that he created in 2011.

What is the Isocrates Foundation?

The Isocrates Foundation was founded by Puech himself in 2011. Instead of donating to traditional charities, such as the Red Cross, the Foundation supports investigative journalism. The website states that the foundation “supports public interest journalism and media organizations committed to strengthening the field of investigative journalism and the production of independent quality information.” You would think that Nicolas would be eager to donate money to his own foundation, right?

Who is Puech’s legal heir?

Instead, Puech is making his gardener his legal heir through the process of adoption. Naturally, the foundation isn’t too happy with the breach of contract: “From a legal point of view, a unilateral cancellation of the contract of inheritance seems void and unfounded,” the company stated in a statement to press. You would think that it would be VERY easy for Puech to easily void a contract, especially if it’s a contract for his OWN foundation. However, with the gardener now being a legally adopted heir, it is likely that the inheritance for the Foundation will be cut in half, rather than being entirely removed from inheriting anything. If this is true, then there is likelihood that the Foundation will receive 50%, not 100% of Puech’s fortune. The Foundation will most likely be getting $6 billion, not the entire $12 billion. No word on whether or not Puech can be sued for breach of contract. We can only speculate on Puech’s change of heart: why did he decide to make his gardener his legal heir, instead of giving everything to the foundation?

So, we’ll leave you to wonder about what you would do if you were lucky enough to be adopted by one of the richest men in the world.

Estate Planning in Canada

We all have something of value to pass on to our loved ones; that is what estate planning does and why you should plan for your estate as soon as possible. Our estates are comprised of our assets, items and all of the things that we all own. This can include anything and everything from investments, homes, cars, savings accounts, personal possessions, furniture, life insurance, etc. All of these things add up to create our personal estate(s). It’s very important to plan on how to manage all of these assets, and how they’ll be distributed when you pass away. This is where estate planning comes into play.

No matter which province you live in, whether it be Ontario, Quebec, British Columbia, Manitoba, Alberta, New Brunswick, Saskatchewan, or Newfoundland, estate planning is incredibly important. Estate planning can be used as a way to not only manage your assets, but also to ensure that your assets go to the right people. 

What is Estate Planning?

Key Components of Estate Planning

Effective Estate Plan

FAQs

What is Estate Planning? 

Estate planning allows you to manage your assets and estate before you pass away. If you die or become incapacitated, the person in charge of your estate, or in the event of working with an estate planning professional (if you are working with one) will have all the necessary directions and guidelines on what to do and how to complete the process.

Estate planning consists of more than simply preparing a Last Will because aside from choosing how your wealth is distributed, estate planning can also settle your debts and estate taxes. Estate planning also covers other things: the guardianship of your pets and minor children, for example. Following an estate planning checklist will help streamline the process while also helping you save time and ensure everything is managed appropriately.

How Important is Estate Planning?

Having an estate plan is of the utmost importance! If you’re looking to safeguard the future of your family, you will want to that your wealth is distributed properly. An estate plan offers control over asset distribution. It also protects your heirs by ensuring that their future(s) are taken care of.

Without proper estate planning, it can be hard to reduce the financial burdens incurred on your family when you pass away. It can also be hard to ensure that your money and wealth are distributed as per your final wishes. Thankfully, estate planning helps you gives you complete control over how you allocate your wealth in the event you pass away.



Key Components of Estate Planning 

Every estate plan is unique; however, some components tend to be a part of each plan, and here are the main ones.

Wills and trusts

A Will is a legal document that allows you to distribute your assets once you pass away. Wills are also important if you want any specific funeral arrangements, a specific guardian for your kids, and so on. You can also opt for a trust, which is a written document that ensures that the property be held by one (the “trustee”) for the benefit of another (the “beneficiary.”)

Power of attorney

A Power of Attorney document allows someone else the authority over your financial affairs and property. This document allows you to specify the details of what powers and duties your Attorney (the person you have appointed to look over your financial affairs), can or can not engage in. You can read more about how a PoA works. You may also want to think about completing a Power of Attorney for Personal Care. That will help round out your entire estate plan.

Healthcare directives

The Power of Attorney for Personal Care (otherwise known as a “Living Will”) is a document that allows you to specify what actions someone can take on your behalf. In the event of your incapacitation (unable to make decisions for yourself), the Living Will kicks in. Normally, healthcare directives are very common in the event of illness, coma, or any other situation where an individual is unable to speak on his/her behalf.

Steps to Create an Effective Estate Plan 

Establishing a proper estate plan can be very difficult and time-consuming. Here are some steps you can take to help you create an efficient estate plan.

Identifying key roles: executors, guardians, beneficiaries

When you start the estate planning process in Ontario, the most important thing is to identify the individuals who are going to be an integral part of your estate plan. The Executor is the individual who administers your estate and follow your wishes (in the Last Will and Testament.) The guardian is the individual who takes care of minor children and raises them once you pass away.

Beneficiaries inherit various items/assets. You may need to have physical witnesses when the estate planning process is just starting. For your PoA, you also need to have someone appointed as the Power of Attorney if you can’t make financial and health decisions. 

Determining estate distribution

Another major aspect of estate planning comes in the form of asset distribution. You may want to create a list of each person in your life who you are going to leave behind something for. It’s also possible to offer charitable donations through your estate plan. This can be done through your Last Will and Testament.

Outlining additional wishes

Aside from asset distribution, you may also have other special wishes to take into consideration. In that case, you may wish to create a separate document with any specific wishes you might have. That includes anything related to burial/funeral arrangements, how you distribute your valuables, or other things that were not a part of the initial process of asset distribution.

After finalizing all of the aforementioned tasks, your focus has to be on preparing the legal documents, ensuring that they are properly witnessed, signed and (if necessary, notarized.) It’s not a major part of the process, but it is important and something to keep in mind. 

Common Mistakes in Estate Planning 



Estate planning in Ontario doesn’t have to be a difficult process. It’s extremely important to know the most common mistakes in Estate planning, and how to avoid them when yourself.

  • It’s also common for people not to include any funeral arrangement preferences in their Last Wills, which can become an issue for bereaved loved ones. This can go into a separate list. It’s separate from the Will itself.
  • Not discussing issues beforehand with family and friends can also present a challenge: you want to be sure that the people who have appointed for certain roles (i.e. Executor) are going to be accepted by other members of your family. It’s best to have this discussion beforehand.
  • Some people also forget about setting up a healthcare representative or a financial Power of Attorney. You will want to have these two documents as part of your estate plan.
  • It may be beneficial to have multiple beneficiaries.
  • If you already have an estate plan in place, it makes sense to review it periodically. You should update your plan whenever required.

FAQs 


Is estate planning necessary?

Ideally, everyone should have an Estate plan. An Estate plan makes it very easy to manage your assets and ensures that someone else can make the right health-related decisions. In addition, an estate plan allows you more flexibility and control over managing and handling your assets.

Do you need an estate plan if you have a living trust?

Yes, because you want to ensure everything is handled the way you want. An estate plan is there to manage everything once you pass away.

Can you modify your estate plan?

Yes, the estate plan can be modified as many times as you want during your lifetime. The focus is on keeping it accurate and updating it with your wishes.

When is it a good idea to start an estate plan?

Now! Now is the perfect time to get started with an estate plan. There are certain times during your life when an estate plan can become a priority. That can be when you are acquiring new assets when you get married or have a child, when your children come of age, or when you retire.

Do you need a lawyer for estate planning?

If you need legal advice, an estate planning lawyer may work for you. Be sure to seek out legal advice whenever necessary!

Remember, you can always set up your Wills and estate plan online in Canada with just a few clicks!

Rich person enjoy money

A supposed “wealth transfer” is occurring. How do rich people pass on their fortunes to their heirs? What can you learn from them?

A whopping $84 trillion in assets will trickle down to Millennials and Generation X. Families should (hopefully) put a lot of thought and planning into how that wealth will be passed down.

This is even more true for uber-wealthy families.

It’s no secret that Millennials and Generation Z are two generations that have been beset with financial and economic struggles: student loans, high inflation, housing, and low job prospects all paint a bleak economic future for both generations. This is why many members of the younger generations are scrambling to make money through “side hustles,” living with roommates for a lot longer, live longer at home, and scrimp and save as much as possible.

The Importance of Estate Planning

The most common challenges

Family Dynamics

Wealth Succession

Other Things

Family Relationships

Philanthropic Giving

Financial Education

Life Insurance

Estate Tax

Wealth Transfer

Passing on wealth to the next generation

This is where the importance of passing down your inheritance comes in:

For a lucky few (we’re talking a very small minority of people on the planet), they have had the good fortune to inherit wealth. The small minority of lucky (wealthy) Millennials and members of GenZ may face other problems when it comes to receiving their assets: they may inherit less than they actually believe. Taxes and other estate fees may eat up their inheritance. Here is how you can learn from the uber wealthy: a study of 270 individuals from families with $50 million showed that some of the most important lessons on wealth planning are as follows:  

The most Common Challenges in Wealth Succession

Managing tax liabilities while transferring your assets can significantly impact (i.e. diminish) the wealth passed on to heirs. This means that proper estate planning and a good strategy for passing down wealth is of the utmost importance. In fact, 33% of respondents to a survey said that COVID-19 lead to more frequent conversations about their familial wealth.

78% of people reported having unplanned conversations about wealth, which didn’t go well at all. 26% of of those respondents actually regretted having those conversations. Ouch!

Managing Family dynamics:

The above stat shows why families with strained relationships, conflicting values, and differing values all complicate the process of transferring wealth. This is where the strategies for successful wealth succession comes in: asset preservation, safeguarding your assets from economic downturns, and preparing your heirs for the future are all important (it’s especially important in this day and age, where inflation is at 40-year high.)

Strategies for Successful Wealth Succession:

Estate planning is the basic cornerstone of wealth succession for affluent families (and not-so-affluent families.) This involves creating a comprehensive strategy to manage and distribute assets upon death (or in some cases, while the heirs are alive – which you can read about here.)

Wills: This is a no-brainer: everyone should have a Last Will and Testament, and if you need a basic Last Will drawn up, see here as to how we can help you with that. These are legally-binding documents to help specify how your assets should be distributed and managed upon your death.

Other things an Estate Plan should include:

Asset protection: optimize your tax strategy by utilizing tax-efficient strategies to minimize estate taxes. That will allow you to maximize your wealth and increase the amount of money that your loved ones get. That may include receiving professional financial advice, if you need it.

Family Relationships:

This should be a no-brainer, but having these conversations about money can elicit feelings of anger, sadness, confusion, etc. If you’re going to sit down and have these (uncomfortable) conversations about money, you’d better be prepared for some crying, anger (possibly screaming, yelling), and maybe even threats of physical violence. One way to handle this is through annual family meetings: gather everyone to discuss your plans for your estate, your long-term goals, and how you want your things to be handled upon your death. A good discussion to air things out may help clear the air of any ambiguity regarding your estate.

Philanthropy and Charitable Giving:

Many affluent families engage in philanthropy: they pass on their money to worthy charitable causes. This is their way of leaving behind a positive impact on society upon their deaths. You can see this with wealthy celebrities who have left everything to charity, rather than to loved ones. There are celebrities who believe that their own children should work for their own money (usually with the help of their parent’s connections, of course.) Funneling money through family foundations or through charitable trusts can seamlessly support charitable causes, and get the heirs involved in charitable giving. In other words, having your heirs involved in charitable giving and distributing that money may keep the children of the uber-wealthy from being spoiled brats who live off of their inheritance.

Financial Education and Mentorship:

Rich people, just like everyone else, don’t want to see their wealth squandered. They may also prepare the younger generation with lessons about financial literacy at a young age. Of course, this involves networking and connections (probably connections that many of us don’t have.)

Life Insurance:

Life insurance can serve as an effective tool for wealth succession. It’s pretty much a viable tax-efficient way to transfer wealth to heirs. Life Insurance can also be used as a way to pay off taxes on real estate.

Estate Tax Planning:

Estate taxes can significantly eat away at the wealth people have accumulated into your estate. For wealthy people, this is where estate planning attorneys/tax expert come into play: they help minimize tax liabilities. That isn’t what you want, right? You may want to do the same, and talk to an estate planning lawyer when you are settling your estate. You may also want to start with our estate planning articles, here.

Wealth Transfer Laws:

Wealthy families have to stay informed about new laws and tax regulations. They adapt and adjust plans accordingly. Regardless of your income level, you should follow suit and adapt by staying informed with the laws surrounding tax regulations.

Preparing the next generation:

Rich people don’t want their money to be blown – there is some evidence to show that by the third generation, inherited wealth ends up squandered. You too, can avoid having your money (and estate) squandered by emphasizing the importance of your heirs (and their children) about managing their money, consistently educating themselves on changes to the laws, and learning how to spend money wisely.

You can start this entire journey by creating a Will, Power of Attorney or a Living Will for yourself. You can start here. Wealth succession is a complicated journey that goes beyond the transfer of financial assets. You have to balance your assets, estate, family relations, philanthropy, etc. Managing all of this almost appears to be a full-time job. You can learn from wealthy families by making sure that your own heirs are up for the job.