EP # 210 | Equal Versus Fair: Dividing Your Estate Between Children
Your Retirement Planning SimplifiedShow Notes
You sign your will, feel a wave of relief, and put it in the drawer. Done, handled, the kids are taken care of. But a will mostly records what you decided. It does not explain why. And if your children have never heard your reasoning while you are still here to explain it, you can leave them with a division of assets and very little context. That gap is often where grief turns into conflict.
Episode Summary Equal and fair are often the same thing - but not always. And the places where they come apart are usually where families run into trouble. Joe walks through two detailed real-world examples, a cottage with a quiet tax problem and a family business handled the right way, to show how good intentions can go sideways when the planning is done in silos and never revisited. The lesson underneath all of it is the same: the family conversation you should have, before the document has to speak for you, is just as important as the document itself.
In This Episode A will records what you decided, not why. If your children find out for the first time at the worst possible moment - while grieving, reading a legal document - they are left to piece together your reasoning on their own. That is where misunderstanding and resentment take hold.
Equal does not always finish fair. A real example: a $100,000 life insurance policy set up decades ago to equalize a cottage inheritance made perfect sense at the time. By the time both parents had passed, the cottage had grown to over a million dollars in value, the capital gain ran with the estate, and the sibling who never received any part of the cottage ended up funding a third of the tax bill on an asset that was not theirs.
Fair does not always mean equal on paper, and that can work - but only when everyone understands why. A family business handled well involved one child inheriting the business, taking on the associated tax liability, and receiving life insurance to cover it, while the other child inherited liquid assets worth less on paper but carrying no business risk. Both children were in the room when the plan was explained. Nobody was blindsided.
Early gifts quietly become fairness data points. The down payment you helped one child with, the wedding gift, the seed money for a business - in the moment, that was just parenting. But the other kids remember. Whatever you decided at the time, write down whether it was a gift, a loan, or an advance on inheritance, while everyone remembers it clearly.
A lot of this comes down not to a better document but to a conversation - ideally one you have on purpose while you are still here to explain yourself. You do not have to cover every dollar. Naming the why behind the big decisions, who the executor is and why, where the cottage is going and why, who the powers of attorney are and why, is often enough to prevent the problems that show up later.
About: Your Retirement Planning Simplified is a weekly Canadian retirement planning podcast hosted by Joe Curry, CFP, CEPA, of Matthews and Associates, an independent wealth management firm. Each week, Joe breaks down retirement income, tax, and estate decisions in plain language for Canadians who are near or in retirement.
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Disclaimer: Opinions expressed are those of Joseph Curry, a registrant of Aligned Capital Partners Inc. (ACPI), and may not necessarily be those of ACPI. This podcast is for informational purposes only and not intended to be personalized investment advice. The views expressed are opinions of Joseph Curry and may not necessarily be those of ACPI. Content is prepared for general circulatio
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