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Meeting a financial professional as a couple: estate, tax and succession planning.

Meeting a financial professional as a couple: estate, tax and succession planning.

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A BMO survey revealed less than half of couples talked about what their ideal retirement will look like.

By: Chris Buttigieg, Director, BMO Wealth Institute, BMO Wealth Management

When it comes to important life-changing transitions, it’s important that you and your partner are on the same page about retirement goals and your estate and succession plans. Unfortunately, this is not a common approach among Canadian couples.

For instance, a BMO survey revealed that although 87% of married individuals or those in a long-term relationship reported having a discussion with their partner about retirement, fewer than half of those talked about what their ideal retirement will look like and how they’ll achieve their goals.1

In addition, many couples do not commit to participating jointly in meetings with their shared financial professional. Instead, they often take a “divide and conquer” approach to managing their finances. One partner may be responsible for filing the family’s annual tax returns and tracking monthly expenses, while the other manages their investment plans.

This approach adds complexity to financial decisions that should be made jointly between couples, on issues such as investment objectives tolerance for risk, retirement planning - and even tax planning.

Having open and honest discussions with your partner on a regular basis is one of the best ways to stay ahead of these challenges (see “Have money talks with your partner”), but so is speaking to your financial professional together as a couple. A Private Banking professional can also help reduce financial misunderstandings and stress between partners.

Seeing your big picture together

Your BMO Private Banking Relationship Manager will get a more complete picture of your family’s financial situation and investment objectives when both partners are present — and can then design a wealth management plan that fully reflects your family’s needs and goals for your retirement.

Financial literacy should be a life skill for all. Adult life is a journey that most begin travelling alone and then maybe with someone, and then maybe alone again. That’s why it’s key that both you and your partner are on the same page about finances and financial goals when working with your BMO Private Banking Relationship Manager.

Have money talks with your partner

Finances are the biggest source of conflict between Canadian couples. Indeed, money ranked ahead of infidelity and family issues as reasons that would lead a couple to divorce.1 So just as you should talk to your financial professional together, you should also talk money between yourselves in an open and direct manner. Here are some tips to help:

  • Communicate regularly. Start talking when there are no particular issues involved — such as a large, unforeseen expense or mounting credit card debt. This will help avoid the blame game and finger pointing.
  • Communicate effectively. Starting the money conversation requires patience and empathy. Your partner may have a different understanding of money and different expectations than you. Listen, ask questions, and talk about how your parents’ understanding of money influenced your own.
  • Focus on shared goals. During your regular money chats, talk about things you are both excited about — such as a dream vacation, plans for retirement, or an idea for a new business. This makes it a family affair, and puts you both on the same page.
  • Set a good example for your children or grandchildren. Kids are quick studies, so it’s never too early to start teaching them about the value of money. Together with your partner, help your kids or grandkids start their own savings goals. Lead by example and show them how to be responsible with money.

1 BMO Financial Group, Fourth Annual Valentine's Day RRSP Study, February 2014.

All opinions and estimates contained in this communication are subject to change without notice and are provided in good faith but without legal responsibility.

This report is not an offer to sell or a solicitation of an offer to buy any securities. This material is prepared for general circulation and does not have regard to the particular circumstances or needs of any specific person who may read it.

Nothing contained herein shall result in liability or consequential loss arising from any use of this report or the information contained herein. This report may not be reproduced, distributed or published by any recipient hereof for any purpose.

The comments contained herein do not constitute advice in the areas of legal, accounting or tax. It is your responsibility to consult with the appropriate professionals in those areas either independently or in conjunction with this assessment process.

The comments included in this publication are not intended to be a definitive analysis of tax applicability or trust and estate law. The comments contained herein are general in nature and professional advice regarding an individual’s particular tax position should be obtained in respect of any person’s specific circumstances.

BMO Private Banking is part of BMO Wealth Management and is a brand name under which banking services are offered through Bank of Montreal, investment management services are offered through BMO Private Investment Counsel Inc., a wholly-owned indirect subsidiary of Bank of Montreal, and estate, trust, planning and custodial services are offered through BMO Trust Company, a wholly-owned subsidiary of Bank of Montreal. BMO Wealth Management is a brand name that refers to Bank of Montreal and certain of its affiliates in providing wealth management products and services.

BMO (M-bar roundel symbol), BMO Private Banking registered trademarks, and BMO Wealth Management trademark are owned by Bank of Montreal, used under license.


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