All About Estates

How Much Should You Leave To Your Children And When?

This week, I had a great opportunity to sit down with Andy Jeffery, Vice President, Family Office Advisory, at Northwood Family Office,[1] to discuss a question frequently raised by clients; “How much should I leave my children and when?” Below we distill our discussion into five questions, providing you with both of our perspectives, being that of a family office advisor and an estate planner.

  1. Do clients seek guidance in regards to how much to leave children?

Andy: Absolutely – it’s one of the most common questions we get.  When we start working with a client, one of the first things we do is compile their family balance sheet and overlay it on top of their current wills, which we put into a flow chart.  For some clients this is the first time a balance sheet has been prepared, and it puts into context how significantly their children’s lives would change if they were to inherit everything.  Typically, the inheritance amount is larger than they expected, and it’s at this point we get the “how much should we leave” question.  Our answer is always “it depends”, and then we start asking them a series of questions that help to get to an answer that is right for their unique circumstances.

Tamar: Yes. Clients may start by seeking advice with respect to how to create an estate plan that achieves their goals. A common goal is providing for children. Often, clients have a general sense of how they intend to divide their estates, however, the question of how much to leave children comes up throughout the estate planning process as we facilitate in-depth discussions. Discussions include considering various factors within the context of meeting clients’ goals. For example, factors include, but are in no way limited to:

  • clients’ values;
  • asset classes;
  • asset values;
  • agreements impacting clients’ ability to dispose of certain assets (like shareholder agreements and marriage contracts);
  • family dynamics;
  • other social dynamics; and
  • philanthropic objectives.
  1. How much should clients leave to their children?

Andy: As I mentioned in the first question, we want to help clients get to an answer that is right for them, which means really understanding their goals and objectives, as well as their values. We ask them a series of questions such as, “what sort of lifestyle do you want your children to have?”, “how established are your children in their lives and careers?”, and “would receiving a large inheritance alter the path your children are on?”  The goal of these questions are to get them thinking about what’s best for their children, and what they would want their lives to look like should their parents pass away.  Once these questions are answered we help them determine the specific dollar amounts that align best with their goals and objectives.

 Tamar: The answer here depends on clients’ identifiable goals, again within the context of such factors noted in my answer to the previous question. We would want to discuss other considerations with clients that may inform this answer, including (but not limited to):

  • what values clients wish to instill in their children (for example, some clients heavily value self-sufficiency);
  • what lifestyle clients wish to maintain, both in respect of themselves and their children;
  • the cost of such maintenance; and
  • their children’s circumstances, such as whether they are financially dependent on the clients, hard working and motived, have any disabilities impacting their earning potential, etc.

As a result, each client’s answer to this question, and accordingly their estate plan, will be unique.

  1. When are clients leaving money to their kids?

Andy: This again really depends on the family, and how prepared their children are to receive a significant inheritance.  Some families have done a great job preparing their children to be stewards of wealth and are comfortable with them receiving an inheritance as early as their mid-twenties, where others don’t want their children to receive funds until much later.

When we get asked directly for our advice, we say that we prefer to see children get settled in life and form their own path before receiving capital that could significantly alter their course.  This typically leads to families setting up trusts where capital is paid out at specific ages such as 30, 35, and 40.  We’ve also seen a “milestone approach” used successfully, where capital would be provided at specific events such as marriage, birth of a child, etc.  The risk here however is to ensure parents aren’t seen as “ruling from the grave” by monetarily rewarding certain behaviours.

And finally, we’ve seen a trend of parents gifting more to their children while they are still alive.  Parents recognize that they are likely to live into their 90s, and their children would benefit from receiving funds earlier in life when expenses are higher.  Under this approach parents get to see their children enjoy the use of the wealth, and if necessary, assist them with its management.

Tamar: In an estate plan where portions of clients’ estates are held in trusts for children, I am frequently asked at what age or ages distributions from such trusts should be made. If the trusts hold shares in a family business, depending on our discussions surrounding the succession plan for such business, I may suggest that the control/voting shares be dealt with separately from the common and/or preference shares that represent the value in the business. Perhaps it would be beneficial to have the trustees—who may include individuals well-versed in the business and operations thereof—hold the control shares, to maintain a centralized voting block, until they are comfortable that the clients’ children have the maturity needed to hold and exercise their rights and powers in respect of those control shares. With respect to other assets in the trusts, if the children are very young at the time wills are being completed, I may (depending on asset values and other factors) suggest younger ages for trust distributions (e.g. a full distribution at 30 years old as opposed to 40 years old). This is particularly the case where the clients’ life expectancy is relatively shorter. The reason for this is to keep in mind the duration of the trust and all that comes along with that, such as costs and other administrative factors. The desire to minimize the time the trust is maintained to minimize costs should be balanced with the fact that it is hard to determine at a young age whether a child will be a responsible financial steward, and therefore may benefit from a trust held for a longer period of time. A staged distribution, such as 25 and 30, also may be beneficial so that children can start to learn how to manage their funds prior to having control over 100%.

  1. To what extent do clients’ values drive these decisions?

Andy: Clients’ values have a significant impact on these and all decisions.  Early in our relationship we facilitate different exercises using value cards and story telling to define the values of the family, and these values act like a compass for future decisions.  For example, if a core value is financial “stewardship”, leaving significant capital to an unprepared child in their early 20s may conflict with this value.  The parents may instead decide to defer capital distributions to a later age, and actively take steps today to better prepare that child to be a steward of the family wealth.

Tamar: Values play a significant role in how much to leave children and when. Different families place emphasis on different values. For example, some families may value developing for future generations philanthropic values, financial independence, and/or equality among family branches while others (although these values are not mutually exclusive) may prioritize fully supporting future generations and equity among family branches. Discussing clients’ values and the weight they place on such values helps guide the estate planning discussion. For example, if clients intend to support multiple generations, we may consider ways to establish a multigenerational structure of succession and that may involve holding assets in corporations and/or trusts for the benefit of children (and their issue) rather than distributing all assets outright to children.

  1. Have you noticed a trend in philanthropic giving?

Andy: I wouldn’t say that we’ve seen any trend shifts, but it’s very common for the estate plans of our clients to include a philanthropic aspect.  Many of our clients have private foundations or philanthropic structures in place already, so it makes sense that their philanthropic goals would extend to their estate plans.  Our clients recognize that they have the means to support multiple generations of family members, as well as causes that are important to them.  And often, the philanthropic aspect of their estate plan creates an opportunity for the next generation to continue working together and maintain the family values.

Tamar: Among all generations, I have seen significant generosity, passion, and a desire to mobilize to help others. The trend that I have personally seen relates to  the manner in which younger generations are giving. When gifting through their wills, rather than gifting an identifiable amount or share of the residue, the gift may be structured as an amount determined through a specific equation to offset tax liabilities arising on death. With respect to older generations, clients who are philanthropically inclined typically intend to instill this value in their children. Part of this is conveyed through their estate plan. This may involve gifting during their lifetime, leaving a legacy in their wills, establishing a foundation (clients’ children can be involved in the leadership, which will help to instill philanthropic values), and/or a donor-advised fund (particularly in a year wherein a significant capital gain will be realized).

[1] “Northwood Family Office is Canada’s leading multi-family office, offering integrated planning, investment management, wealth administration and family engagement for families of wealth.” –

About Tamar Silverbrook
Tamar Silverbrook is an associate in the Trusts, Wills, Estates and Charities group at Fasken. Tamar’s practice is focused on domestic and international trusts, as well as wills and estate planning. Tamar works closely with clients and/or clients’ advisors to draft the appropriate documents to facilitate estate and business succession plans that fulfill clients’ unique objectives. This includes providing advice on probate planning, disability planning, charitable gifting, asset protection strategies, cross-border estates and tax issues, personal privacy, family law matters and the interpretation of trusts’ provisions and the corresponding scope of authority provided to trustees. Tamar also advises trustees in administrating a range of complex trust matters.


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