At Pathfinder, managing retirement and investment portfolios is very personal! We are extremely proud and appreciative of the 450+ households that trust us with management of investments and financial affairs and we have come to know many of them as close friends. We would like to thank our client base for their continued support. This year, we have received over 50 referrals to friends and family interested in Pathfinder as an option to help manage their financial planning and investments. A number of those referrals are children of clients and with that, naturally comes wealth transfer considerations.
The transfer of wealth to the next generation is inevitable, but often a stressful and unpleasant part of everybody’s financial lives. As our client base has grown and aged, we find ourselves dealing more and more with this transition. It is important to bring up to our readers how some very basic planning and forward thinking can usually save a great deal of stress, anxiety, work, and TAX. All it takes is arranging a discussion and putting in some thought as to how you want your assets to pass on to your spouse, the next generation or maybe a charity.
Often, we find that the baby boom generation can be rather reluctant to discuss money with their family and this often leads to expensive tax consequences that can be easily avoided by simply sitting down and doing some simple planning. Sometimes the message we get is “well I’m going to be dead so my kids can figure it out… I’m just going to give everything evenly to them”.
- What are you leaving them? What is the cost base (what you purchased the asset for) vs. the current market value?
- There could be capital gains tax associated with some of these assets (investment/vacation property, non-registered investments that were purchased a long ago and are now worth significantly more)?
- Does your estate or do your kids have the funds to pay the capital gains tax without liquidating the property/investments?
- Do your beneficiaries have enough financial savvy to properly manage their inherited wealth?
- Are your children competent and responsible enough and is their family situation to your liking to inherit your assets?
- Are you holding investments/property/cash that is going to be subject to probate in its current structure?
“This means that” people often procrastinate on addressing this and feel they don’t know the right questions to ask. That’s our job. We will help pose questions for you to address and guide you through the process of properly structuring your estate to your wishes. If you have a family lawyer, we are keen to collaborate or introduce you to a trusted professional. Make it a priority.
National Instrument 31-103 requires registered firms to disclose information that a reasonable investor would expect to know, including any material conflicts with the firm or its representatives. Doug Johnson and/or Pathfinder Asset Management Limited are an insider of companies periodically mentioned in this report. Please visit www.paml.ca for full disclosures.
*All returns are time weighted and net of investment management fees. Returns from the Pathfinder Partners’ Fund and Partners’ Real Return Plus Fund are presented based on the masters series of each fund. The Pathfinder Core: Equity Portfolio and The Pathfinder Core: High Income Portfolio are live accounts. These are actual accounts owned by the Pathfinder Chairman (Equity) and client (High Income) which contain no legacy positions, cash flows or other Pathfinder investment mandates or products. Monthly inception dates for each fund and portfolio are as follows: Pathfinder Core: Equity Portfolio (January 2011), Pathfinder Core: High Income Portfolio (October 2012) Partners’ Fund (April 2011), Partners’ Real Return Plus Fund (April, 2013), and Partners’ Core Plus Fund (November 2014).
Pathfinder Asset Management Limited (PAML) and its affiliates may collectively beneficially own in excess of 10% of one or more classes of the issued and outstanding equity securities mentioned in this newsletter. This publication is intended only to convey information. It is not to be construed as an investment guide or as an offer or solicitation of an offer to buy or sell any of the securities mentioned in it. The author has taken all usual and reasonable precautions to determine that the information contained in this publication has been obtained from sources believed to be reliable and that the procedures used to summarize and analyze such information are based on approved practices and principles in the investment industry. However, the market forces underlying investment value are subject to sudden and dramatic changes and data availability varies from one moment to the next. Consequently, neither the author nor PAML can make any warranty as to the accuracy or completeness of information, analysis or views contained in this publication or their usefulness or suitability in any particular circumstance. You should not undertake any investment or portfolio assessment or other transaction on the basis of this publication, but should first consult your portfolio manager, who can assess all relevant particulars of any proposed investment or transaction. PAML and the author accept no liability of any kind whatsoever or any damages or losses incurred by you as a result of reliance upon or use of this publication.