Inheritance

Introduction xv Part One: Planting a Garden 1 1 Real-Life Examples of Inheritances Received 3 2 Receiving Inheritances 11 1. Eight Steps to Handling Your Inheritance with the Respect It Deserves 12 3 Well-Known Lives and Legacies 17 1. Steve Jobs 19 1.1 Influences 19 1.2 Beliefs and Values 21 1.3 Legacy 23 2. Nelson Mandela 25 2.1 Influences 25 2.1 Beliefs and Values 27 2.3 Legacy 28 vi Inheritance 3. Pierre Elliott Trudeau 30 3.1 Influences 30 3.2 Beliefs 32 3.3 Legacy 33 4. Bill and Melinda Gates 36 4.1 Influences 36 4.2 Their legacy 40 4 Leaving an Inheritance 43 1. Four Questions 43 2. Your Family Tree 44 3. Outside Influences 45 4. Beliefs 46 5. Values 46 5 Creating a Family Mission Statement 49 1. Communicating Your History, Influences, Beliefs, and Values to Others 50 2. Communicating through Family Meetings and Collective Gestures 54 6 How to Think about the Special Needs in Your Family and Avoid Regrets 57 1. When Equal Is Not Fair 57 2. Heirs with Disabilities 59 3. Incentive Bequests 59 4. Timed Bequests 60 5. Bypassing a Generation 60 6. The Family Cottage or Vacation Property 61 7. Charities 63 8. Other Heirs or No Immediate Heirs 64 7 Getting Organized 67 1. The Death Box 67 2. Note Where You Keep Your Important Papers 68 2.1 Your personal records organizer 68 Contents vii 3. Who Should Be Contacted upon Your Death 69 3.1 Executor 69 3.2 Financial planner(s) 69 3.3 Registered retirement savings 70 3.4 Defined benefit pension plan 70 3.5 Life insurance 70 3.6 Debt 70 3.7 Employers 71 3.8 Lawyers 71 3.9 Accountants 71 3.10 Business partners 71 3.11 Union or business associations 72 3.12 Government programs 72 4. Net Worth Statement 72 Part Two: The Tool Shed 77 8 Estate Planning Tools 79 1. Taking the First Step: An Estate Plan 80 1.1 Dying intestate 80 2. The Tools 81 2.1 Wills 81 2.2 Trusts 83 3. Bequeathing the Family Cottage 88 3.1 Trust 88 3.2 Buy-sell arrangement 88 3.3 Leave the cottage to one child 89 3.4 Defer the decision to after death 89 4. Gifts Distributed during your Lifetime 89 5. Life Insurance 90 6. Charitable Bequests 91 7. Living Wills 94 8. Powers of Attorney (POAs) 94 viii Inheritance 9. An Executor 95 9.1 Qualities to look for in an executor: 97 10. The Five Wishes 98 9 Insurance for Estate Planning 101 1. Expenses 102 2. Providing an Income 102 3. To Supplement Income and Transfer Wealth via Estate Bond 103 4. Pension Maximization 104 5. Estate Liquidity 104 6. Charitable Bequest 106 7. Balancing Bequeathed Assets 106 8. Types of Insurance 109 8.1 Term life insurance 109 8.2 Permanent insurance 110 8.3 Living benefits: long-term care and critical illness insurance 110 10 Building Your Advisor Team 113 1. Financial Planner 113 2. Accountant 114 3. Lawyer 115 4. Choosing and Hiring Advisors 115 4.1 Hiring a financial planner 116 4.2 Hiring an accountant 118 4.3 Hiring an estate lawyer 119 5. Help Choosing Your Team of Advisors 122 6. Ask Questions 123 Conclusion 127 Download Kit 129 Contents ix Checklist 1. Executor's Responsibilities 73 Exercises 1. Three Essential Questions for a Family Mission Statement 51 2. Imagine You Are the Host 52 3. Values 52 Sample 1. Net Worth Statement 73 Tables 1. Income That Should Be Insured 102 2. Example of Back-t0-Back Life Annuity versus Life Insurance 105 3. Grace's Estate 108 Quiz 1. What Kind of Advisor Do You Need 120