2 Changes to Estate and Tax Law in Ontario

The recent changes to Ontario estate law and U.S. tax law might impact families with wealth. These 2 new changes are worth reviewing:

1. For those of you with multiple wills (used commonly to avoid Probate) should review their Wills. A recent decision, Re Milne, rendered a Primary Will void because it contained a commonly used provision that gave the Trustee discretion to determine what assets to include in the Primary Estate. As a result, multiple wills are only valid if the assets that comprise each of the Primary and Secondary Estate are defined with sufficient certainty. This decision is currently applicable in Ontario, but it is possible that it could be applied in other provinces.
2.  U.S. citizens in Canada may be impacted by the changes to the Tax Cuts and Jobs Act, specifically the global intangible low-taxed income (GILTI) tax. U.S. GILTI tax is relevant for any U.S. Shareholder owning 10% or more of a controlled foreign corporation (i.e. a Canadian Corporation with US shareholder). U.S. Shareholders in that situation may have a one-time 15.5% tax, plus they must include in income such profits in excess of a 10% return annually on depreciable tangible assets owned by the corporation whether or not a distribution is made to the U.S. Shareholder.

 

Clients with wealth need to know you see their needs first

We are striving to talk to clients the way they think about their money, not the way we do. Many advisors jump into talking about themselves, how they have been doing their role for 20 years and so forth.  This does not give the client ease of mind.  The client wants to know that you see them and you understand their special circumstances, not that you are shoehorning them into a standard "solution".

Clients feel their money “has a job to do” – to help them develop and educate their children, care for their parents, fund their businesses and homes, spin out a monthly cash flow, etc. In our client relationships, we are focused on helping our clients achieve their desired outcomes – offering the right capabilities, removing complexity and truly listening.

Our clients have their best practices in managing their wealth. This mutual sharing of knowledge has developed the wealth management practices over the past 150 years and this is a responsibility we take very seriously.

Family Wealth: 5 Essential Questions

Having listened to many families of wealth and seeing their family situations, for better or for worse, it does appear that money can impact also for better or for worse. After creating their wealth, entrepreneurs then are concerned about investing, but their overriding concern is the impact on their children. How will the new money affect them? 
Actually, it worries them deeply and we have all heard stories of families who had wayward next generation due to the wealth. What should a wealthy family do?

Listening to entrepreneurs who have sold their business and received an eye watering amount of money, I notice that the great families tend to ask themselves these six questions. 

1.       What is really important to our family?

2.       What are our family’s true assets?

3.       What should I do to guide and support the life journey of each of my family members over time?

4.       How wealthy do I want my children to be?

5.       Do I feel any responsibility to society?

You might also ask what sort of family do you want to be? What do you want - both with family legacy or family stories? Even the answer from your children might be – "meh" – and that says a great deal.

What legacy do you want to leave your children? What about a legacy left for society? Deciding where you want to go with your financial success and why you want to meet those goals will get your strategy going. Determining how to get there and which legal arrangements to use are secondary tactical decisions.

Your financial wealth a is wonderful vehicle to help your family do a shared goal.  In my experience, families who go through this process achieve better results – financially and emotionally.

By the way, my definition of a successful family is one that knows who it is, what it stands for and where it is going. Successful families manage themselves deliberately.  There is a lot at stake for families and each family member. If you and your family can define what is significant, before doing, then your next generation have an excellent chance of thriving.

A staggering amount of wealth has been created in the USA and inheritances given, foundations endowed and legacies created.  The wealthy family is trying to find this other dimension more and more.

The other question, after answering "what is important", is what will be the impact on my children and heirs? I often think that the second question is more important. It is also far more unpredictable. It is why you want to know the life lessons of the best entrepreneurs and how they have managed their family wealth.

 

Christiane Amanpour honoured for her media stories dedicated to Peace

Christiane Amanpour was honoured by Daughters for Life at a gala dinner held at The Carlu in Toronto. She took the opportunity to give the message of peace and to see others as human and not "the Other".

Christiane knows first hand about politics and the power it holds over behavior. She is Iranian and was educated in Britain, during her youth.  This early experience of different cultures, and not quite fitting into the community, gives her a deep insight into belonging and how politicians can warp their people's minds.

Christiane Amanpour, CNN, and Jacoline Loewen, UBS Bank (Canada)

Christiane has an admirable career and here are a few reminders of her assignments around the world to the hot spots of the world:

During her early years as a correspondent, Amanpour was given her first major assignment covering the Iran–Iraq War, which led to her being transferred in 1986 to Eastern Europe to report on the fall of European communism.

1990:

Following Iraq's occupation of Kuwait in 1990, Amanpour's reports of the Persian Gulf War brought her wide notice while also taking CNN to a new level of news coverage.

1992:

On 22 December 1992, during the Bosnian War, Amanpour was reporting from Kiseljak, not far from Sarajevo.e Amanpour, CNN Global Head of Media,

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More Billionnaires are self-made, and fewer come from the finance industry

More billionaires are self made and fewer are from the finance industry. The USA is a good country for growing new billionaires, but that may be because they are transparent about their wealth, as compared to Russia or other countries or geographic regions.
The philanthropy by the super wealthy is admirable too. The Bill Gates foundation, for example, seems to fund many of the early stage companies here in Canada. 

According to the UBS Billionaires Report, compiled by UBS and PwC, the "new [US] billionaire is different", writes On Wall Street, quoting John Mathews, Head Private Wealth Management UBS Global Wealth Management USA. More and more of them are self-made, and fewer come from the finance industry, the report says. The US created a total of 53 new billionaires in 2017, 26 percent of whom were female, compared to 12 percent of all North American billionaires. Only nine new billionaires came from the finance sector, compared to 20 in 2012, while 40 percent came from the consumer and retail industry. Besides record wealth levels, the report points to an upcoming massive generational shift in wealth between generations, with USD 3.4 trillion in wealth set to be handed over to a new generation in the next two decades. Judy Spalthoff, Head Family and Philanthropy Advisory Americas UBS Global Wealth Management, notes that the passing on of vast wealth takes careful preparation and can be a years-long process encompassing a vast range of issues. "It's not enough to only consider the transfer," she says.

Citywire writes that Asia is recording far stronger growth, however, with UBS estimating that China alone creates two new billionaires every week.

Le Monde writes that the outlook is not all fair sailing, however, with Josef Stadler, Head UHNW UBS Global Wealth Management, warning that "the risk of a trade war between the United States and China could [...] disrupt economic growth in both countries, and consequently the resulting wealth creation."

The UBS Billionaires Report has attracted a vast volume of media coverage from a broad range of outlets across different regions. These include a CNBC interview with Josef Stadler, a Bloomberg interview with John Mathews, as well as articles by the Financial Times, The Wall Street Journal, Bloomberg, Reuters, Barron's, South China Morning Post, The Business Times, Frankfurter Allgemeine Zeitung, Handelsblatt, Spiegel Online, Manager Magazin, WirtschaftsWoche, Les Echoes, and Quartz.

contact me on Twitter @jacolineloewen
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