In this episode of Smart Advice, we delve into the intricate world of estate planning for blended families—a crucial yet often overlooked topic for many Canadians. Estate planning becomes significantly more complex when it involves couples with children from previous relationships, second marriages, or common-law partnerships, which are increasingly common across the country. 

Our guest, Richard Voss, Director of Wealth Strategies at CIBC Private Wealth, shares expert insights to help protect your family’s legacy. Tune in for practical tips on managing wills, powers of attorney, and trust planning to help avoid potential conflicts and ensure everyone’s interests are protected.

Three reasons you should listen to this episode:

1. Learn how to navigate the complexities of estate planning for blended families.
2. Discover the legal differences between common-law partnerships and marriage and how they affect your estate plan.
3. Understand the importance of open communication within families when discussing estate planning.

Resources

• CIBC Article: 5 Tips On Talking About Money With Your Partner
• CIBC Private Wealth Insights Hub
• CIBC Smart Advice hub

Episode Highlights

[00:21 ] Estate planning for blended families

• Estate planning is an important part of ensuring your wealth is transferred smoothly.
• However, every family has its own unique dynamics, which creates unique challenges and considerations.
• Blended families in particular have specific nuances to their financial situation.
• 23% of couples in Canada are living as common law partners — the highest among G7 countries.

[03:07 ] Understanding your financial landscape

• It’s a financially smart decision to fully understand your financial assets and liabilities before entering a new relationship.
• There is a difference between hard assets (real estate, cars, collections) and soft assets (family knowledge, heirlooms with emotional attachments).
• Review your current wills, powers of attorney, and beneficiary designations to ensure they are up to date.

[5:44 ] Richard: “If you are remarried or in some provinces common law, and intend to leave your entire or the majority of your estate to your children and you die without a will, recognize that a portion of your estate will go to your new spouse. This can vary depending upon the province you reside in, unless you have what's known as a domestic agreement or a marriage contract in place.”

• Ideally, blended families should have a will and power of attorney to help with financial planning of both the children and the parents.

[09:24 ] Building financial stability in blended families

• Both partners should understand each other’s spending habits and set boundaries on how to utilize their finances.

[10:15 ] Richard: “When two families are coming together to be one new family, it's important for the new heads of the household to be in tune with what type of a spender they are and what type of a spender their new partner is.”

• There are different approaches to financial planning, from fully integrated finances to separate accounts.
• Richard advises regular cash flow monitoring and open conversations about financial goals and obligations.

[15:18 ] Communication and financial literacy in blended families

• Carissa and Richard discuss the importance of communication in blended families, especially with minor and adult children.
• Richard advises demonstrating an abundance mentality and ensuring minor children feel secure.
• Adult children, on the other hand, need to understand the estate plan and potential changes in financial security.
• Plus, it is a good idea to discuss care decisions and responsibilities for aging parents early on.

[19:10 ] Legal differences between married and common law couples

• There are two legal partnerships in Canada that can differ significantly in the eyes of the court: married and common law relationships.
• Defining common law couples in Canada depends on different perspectives and the lens through which it’s viewed.
• The property rights for common law couples varies depending on the province they’re in, jurisdictional rules, and cohabitation agreements.
• Legal advice from qualified practitioners for different aspects of estate planning helps smoothen estate planning.

[26:19 ] Complexity of Estate Planning and the Role of Professionals

• Estate planning can be a complex topic, which may be the reason why only 50% of Canadians have a will.

[27:36 ] Richard: “Parents often times underestimate the complexity of their financial situation and overestimate the ability of their personal representatives, such as executors and beneficiaries, many times kids.”

• Revisiting estate plans annually and documenting intentions clearly helps simplify estate planning.
• He suggests introducing new spouses to professional advisors and involving adult children in financial discussions.
• Family meetings are a great way to address potential conflicts and express estate planning goals.

[28:45 ] The importance of family meetings and open communication

• Family meetings are an opportunity to understand family dynamics and estate planning goals.
• Open communication and transparency are critical for estate planning in blended families.
• The emotional and financial needs of all family members are just as important to discuss in these meetings. 
• Professional executors or trust companies can be useful to include in the discussion to help manage estate affairs.

About Richard

Richard Voss is the Director of Wealth Strategies at CIBC Private Wealth. With over 37 years’ experience in the financial services industry, Richard advises families in the areas of wealth and enterprise planning including business succession, family governance and legacy planning.

Richard holds an extensive background in wealth strategy and is dedicated to simplifying estate planning for Canadians. He focuses on providing tailored, actionable advice that addresses the unique financial dynamics of today’s modern families. This ensures smooth wealth transfer and long-term financial security for future generations.

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