# advisor fees



## switch01 (9 mo ago)

I was informed that since my retirement portfolio has reach a certain amount, my advisor with Assante is increasing their fees. It was 1% of the total portfolio and is now increasing to 2%. Is this % within the norm?

Thanks in advance


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## ian (Jun 18, 2016)

No idea. We pay less than one percent for full service.

The other thing to understand is hidden fees. MERS and back end loads on any investment vehicles that may be in your investment portfolio.

It might be a good time to shop and compare.


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## Beaver101 (Nov 14, 2011)

switch01 said:


> I was informed that since my retirement portfolio has reach a certain amount, my advisor with Assante is increasing their fees. It was 1% of the total portfolio and is now increasing to 2%. Is this % within the norm?
> 
> Thanks in advance


 ... assuming that 1% doesn't include "hidden" fees as ian was saying, what does your signed "agreement" with your advisor says? Can they increase "their" fee for advice anytime or as much as they wish? And what's the justification for the increase, inflation, new Lambo or ?.


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## switch01 (9 mo ago)

No other fees, nor can they increase their fees. 2% is it.


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## ian (Jun 18, 2016)

switch01 said:


> No other fees, nor can they increase their fees. 2% is it.


I am not speaking specifically of Assante fees.

As an example, some funds have multiple MER fee levels. You might have ABC fund or whatever in your portfolio. You may find that there are different series ABC-0, ABC-F, etc.

Same fund. BUT ABC-0 may carry zero or a different MER level than ABC-F. The MERs are hidden in the net return. Unless you dig you will not see them. Same for back end loads.

We fired our fee for service bank advisory service years ago. I spent six months or more shopping for a new advisor/advisory firm.. It was not just fees and performance. It was also about personality, confidence factor, and security of investment funds. For both me and DW. 

Not to mention other services and advice that are available to you as a client. It is not black and white. Our advisor gave us some very timely and some very prudent advice concerning the exercise of stock options. And followed up with some market data. We followed that advice and dodged a very large bullet that we may not have otherwise avoided.

My experience is that it takes work to sort through it all. A one line answer may not be the right answer for you. Or it might be.


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## Beaver101 (Nov 14, 2011)

switch01 said:


> No other fees, nor can they increase their fees. 2% is it.


 ... so you got a letter that just says "we're increasing our fees to 2% AUM effective whenever 2022" for "our advice to you"? I suggest you write back and ask for more details ... on 1. justification for the increase, and 2. review you sign up or at least the KYC form. Short of that, as ian says ... time to move or say adios.

Mind you I'm referring to "advisor" fees for "advice", not for portfolio / funds management as ian details in his post #5. Assante -is that a boutique advisory firm or mutual funds company? 

If it's the latter than yeah, they can increase their MERs (portfolio/funds management fees, not for advice) anytime as long as they give you sufficient time (like 45/60 days?) notice. But then I find it weird that mutual funds would "want" to increase its MERs these days when there're so "many" "cheaper" options out there. UNLESS those funds were held in a pool (eg. pension plan /group RRSP).


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## GreatLaker (Mar 23, 2014)

It's more common that the fee as a percent will drop as the investor's assets increase, although some investment firms are reluctant to disclose their fee schedule. Do you think the advisor's cost of providing advice and portfolio management services has somehow doubled with the increase in your assets? What is the total annual cost to you of 2% of your assets charged as an advisory fee every year? Does that seem like good value?

How much do you value the services your investment firm is providing, compared to a robo-advisor or doing DIY through a discount broker? If the advisor prevents you from making mistakes, it may be worth it. This forum is aimed at DIY investors so it's unlikely that many posters here would find value in a 2% advisory fee, and many would balk at even 1%

Here are a couple of links on why investment fees matter:
Investment Fees Matter… More Than You Think - Money Coaches Canada 
Do you know what you're paying in investment fees? - MoneySense


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## switch01 (9 mo ago)

Lots of info here and thanks for all your responses. We meet once a year and have done very well over the decades. As my advisor states each time; the big guys in Toronto make the decisions moving mutual funds around, sometimes on a daily basis. No charge for advice and I certainly do not have the knowledge to invest myself. Just wondering if 2% was reasonable.


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## cainvest (May 1, 2013)

switch01 said:


> Just wondering if 2% was reasonable.


Is it reasonable to you is the question. If you're happy with the returns and the additional 1% due to your portfolio size then stick with them. It does seem odd the higher amount requires a higher fee.


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## AltaRed (Jun 8, 2009)

There is something that smells quite wrong here. Advisory fees as in the "% of AUM" service model that most full service firms have moved too are almost always tiered, such that larger and larger portfolios enjoy lower fees, not higher fees. Lastly, the mere mention of mutual funds in post #8 is troubling. Why would Assante still have their clients (with sizeable accounts) in mutual funds, unless the holdings in non-registered accounts have such large unrealized cap gains that selling them and buying ETFs would be a major tax burden.

"% of AUM" service models for advisory fees are not permitted to double dip for fees, meaning that any mutual fund holdings in client accounts must be of the 'zero trailer fee' type, e.g. Series F mutual funds in most cases thought fund families like BG, LW and Mawer do not pay trailer fees to begin with.

It is not clear to me what the OP is really describing here. Two percent is a 'large' advisory fee for large accounts, e.g. those over $1M or so. We would need more information to comment.

Added: Here is a good reference point What are the average financial advisor fees in Canada? | Camber My rule of thumb would be 1% for accounts crossing the $1M threshold and perhaps as much as 1.5% for accounts $500-1000k. That assumes no other fees of any kind, e.g. trading fees nor mutual fund trailer fees.


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## Plugging Along (Jan 3, 2011)

switch01 said:


> Lots of info here and thanks for all your responses. We meet once a year and have done very well over the decades. As my advisor states each time; the big guys in Toronto make the decisions moving mutual funds around, sometimes on a daily basis. No charge for advice and I certainly do not have the knowledge to invest myself. Just wondering if 2% was reasonable.


As our portfolio got larger, I asked for a discount in the percentage. I think when I first started, it was over 2% but the portfolio size was so small, it didn't matter. As it got larger, we renegotiation to smaller percentages. Our is under 1%. 

At the end of the day, do you feel that your advisor is worth it our not? We meet with ours officially once a year, but have calls throughout the year. This year, we are meeting with the estate planning team where they will do a complete review of all of our goals (included in our fees). We knew our advisor personally, and they do better than what I would do and I trust them. . So I would pay much more than we do now,


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## Money172375 (Jun 29, 2018)

I recall the TD fee started at 1.35% for fully managed discretionary accounts. Minimum account size $1 million. Fees go down from there.

note: this was from about 5 years ago When I worked there.


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## Farouk (8 mo ago)

switch01 said:


> I was informed that since my retirement portfolio has reach a certain amount, my advisor with Assante is increasing their fees. It was 1% of the total portfolio and is now increasing to 2%. Is this % within the norm?
> 
> Thanks in advance


2% is gouging in 2022 :-(


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## AltaRed (Jun 8, 2009)

Unless the portfolio is well under $1M, it certainly is gouging. Unless of course, the portfolio has performed at least at the relevant benchmark net of fees over the past 10 years or so on a CAGR basis. The OP has not given us any information to work with.


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## bigmoneytalks (Oct 3, 2014)

GreatLaker said:


> It's more common that the fee as a percent will drop as the investor's assets increase, although some investment firms are reluctant to disclose their fee schedule. Do you think the advisor's cost of providing advice and portfolio management services has somehow doubled with the increase in your assets? What is the total annual cost to you of 2% of your assets charged as an advisory fee every year? Does that seem like good value?
> 
> How much do you value the services your investment firm is providing, compared to a robo-advisor or doing DIY through a discount broker? If the advisor prevents you from making mistakes, it may be worth it. This forum is aimed at DIY investors so it's unlikely that many posters here would find value in a 2% advisory fee, and many would balk at even 1%
> 
> ...


Strive for less than 1 percent "all in" is the sweetspot in exchange for financial advice and planning. Anything above 1 percent is where is say it's not worth it.


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## Bobcajun (May 15, 2018)

Plugging Along said:


> As our portfolio got larger, I asked for a discount in the percentage. I think when I first started, it was over 2% but the portfolio size was so small, it didn't matter. As it got larger, we renegotiation to smaller percentages. Our is under 1%.
> 
> At the end of the day, do you feel that your advisor is worth it our not? We meet with ours officially once a year, but have calls throughout the year. This year, we are meeting with the estate planning team where they will do a complete review of all of our goals (included in our fees). We knew our advisor personally, and they do better than what I would do and I trust them. . So I would pay much more than we do now,


I was interested in reading your personal experience of using an advisor. This is a question regarding any fee for and advisor is worth it? When I say this, I have to say that I don't really understand the role of an advisor. I have always done my own investing and am only thinking of an advisor at the eventual finish of this eartly coil in order to say, quarterback the disposistion of assets in the most tax friendly manner. Is an advisor worth paying in a such a situation? Afterall, they are not managing the portfolio. With, say a portfolio of five million, there is a fairly heafty yearly cost. Especially just to wind things up at the end. As I say, I am not sure exactly what an advisor does for this fee. I would be happy to be enlightened. Would one not be better advised to simply use a fee only advisor to coordinate and give advice to the executor at such a point? As I say, I am a bit in the dark on this, and would appreciate any information that might enlighten me.
thanks Bob


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## Plugging Along (Jan 3, 2011)

Bobcajun said:


> I was interested in reading your personal experience of using an advisor. This is a question regarding any fee for and advisor is worth it? When I say this, I have to say that I don't really understand the role of an advisor. I have always done my own investing and am only thinking of an advisor at the eventual finish of this eartly coil in order to say, quarterback the disposistion of assets in the most tax friendly manner. Is an advisor worth paying in a such a situation? Afterall, they are not managing the portfolio. With, say a portfolio of five million, there is a fairly heafty yearly cost. Especially just to wind things up at the end. As I say, I am not sure exactly what an advisor does for this fee. I would be happy to be enlightened. Would one not be better advised to simply use a fee only advisor to coordinate and give advice to the executor at such a point? As I say, I am a bit in the dark on this, and would appreciate any information that might enlighten me.
> thanks Bob



I can only speak for what I feel is of value for my advisor. In my particular case, though I have a financial background, I know that I can take too much risk for my own good. I either buy things without a proper plan or research, or I tend to over analysis and will miss out because I don't make a decision, then the markets have changed. When I have come up with a plan, I either second guess or don't follow through. My biggest strength is that I am fully aware of my short comings. I am one of those investor that should and does know better, but doesn't follow my own advice. My advisor provides me that sounding board, he will even give me advice on investments I don't have with him.

The other thing pay for is, I let my advisor take care of managing my portfolio. He has my larger money and the kid's RESPs. These safety nets, while I tried DIY with my TSFA and some of my unregistered accounts. After seeing if I could become more disciplined and doing it myself vs him managing my main portfolio, I came to the conclusion over all I am not very good at this. Even though I understand alot of the financial pieces and am just not interested in it. So though I have double loses in my own managed accounts, my advisor got me double digit gains in the time frame. The things I did have gains on, were the ones that I called my advisor first. So that's work it for me.

The other parts are the over all integrated planning with our accountant and estate planning. He does work with our family accountant on this for tax implications. Lastly, I find helpful is that my spouse & kids have no interest and no knowledge in this, so he helps them to for if I am not able to manage it. 

I trust this person which is probably one of the most important things. He is also a close friend of the family does the management for my extended family where they have a multitude more in networth than myself. He is only our manager because of my family, we would be too small for him on our own As side note, I was starting to think I should check out the fees and how maybe was paying too much in fees, so I went through ALL the fees, and it was less than 0.1% I thought I was closer to 1%. I couldn't get that low for DIY. I sent him wine after he found out how little he was making.


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## Bobcajun (May 15, 2018)

Plugging Along said:


> I can only speak for what I feel is of value for my advisor. In my particular case, though I have a financial background, I know that I can take too much risk for my own good. I either buy things without a proper plan or research, or I tend to over analysis and will miss out because I don't make a decision, then the markets have changed. When I have come up with a plan, I either second guess or don't follow through. My biggest strength is that I am fully aware of my short comings. I am one of those investor that should and does know better, but doesn't follow my own advice. My advisor provides me that sounding board, he will even give me advice on investments I don't have with him.
> 
> The other thing pay for is, I let my advisor take care of managing my portfolio. He has my larger money and the kid's RESPs. These safety nets, while I tried DIY with my TSFA and some of my unregistered accounts. After seeing if I could become more disciplined and doing it myself vs him managing my main portfolio, I came to the conclusion over all I am not very good at this. Even though I understand alot of the financial pieces and am just not interested in it. So though I have double loses in my own managed accounts, my advisor got me double digit gains in the time frame. The things I did have gains on, were the ones that I called my advisor first. So that's work it for me.
> 
> ...





Plugging Along said:


> The other thing pay for is, I let my advisor take care of managing my portfolio. He has my larger money and the kid's RESPs. These safety nets, while I tried DIY with my TSFA and some of my unregistered accounts.


thanks very much for your detailed reply. It sounds like you are very fortunate to have someone you trust at a reasonable fee. The only reason I would want an advisor is because of the estate planning. I am not sure i can do that through a fee only service, or whether i would need someone on a retainer fee, as you do. 
thanks bob


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## Plugging Along (Jan 3, 2011)

Bobcajun said:


> thanks very much for your detailed reply. It sounds like you are very fortunate to have someone you trust at a reasonable fee. The only reason I would want an advisor is because of the estate planning. I am not sure i can do that through a fee only service, or whether i would need someone on a retainer fee, as you do.
> thanks bob


You definitely can do estate planning with a fee only advisor. I would also recommend an accountant along with the advisor. The first time may take a couple of iterations, then after, its more of a periodic check in. For my parents, who don't have much of an investment portfolio, they did a fee only advisor when they retired (almost 30 years) ago. They didn't need to go again, and we have helped them since. Then they have the same family accountant as us, we go to her for the tax planning, which is a lot of it for them.

You can always shop around with some fee only advisors, see if you find some one you like and trust, get a plan drawn up. See how you feel then. If you feel that you or your spouse may need more support, then you can find one on a more permanent basis. I would go this route for you before jumping in a getting a more on going one.  You sound like you don't need a lot of support, but want someone to just get the finer details that you may not know about.


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## Bobcajun (May 15, 2018)

Thanks very much for your helpful advice. My problem is that I believe we only need financial advice on our deaths. I am fairly well aware of investing principles and tax principles for our portfolio while l am alive. ( Although I realise that there could be things that i am missing). It is mostly liquidating the portfolio on death that concerns me. I am not quite sure how to go about that. If i engage a financial advisor and or an accountant now, they will advise about my present situation. This, I don’t think I need. I need really advice on how to liquidate our assets in the most tax efficient manner on death.

All of this has arisen because I recently spoke with a nephew, who is a financial advisor but not in Quebec, so he can’t take me on. And as i say, i am not sure that I would want to join him anyway, as there seems to be a kind of retaining fee associated. But, he or someone like him, would take over the dossier on death, contact the accountants and liquidators on death.


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## gardner (Feb 13, 2014)

Bobcajun said:


> It is mostly liquidating the portfolio on death that concerns me. I am not quite sure how to go about that.


If you have an executor and/or POA arrangement, you'd perhaps consider sitting down together with the advisor to discuss that. I don't know anything about your health, but from personal experience you should have plans in place to cover a period where you are infirm or otherwise unable to manage your affairs but you still have substantial pension income, assets, expenses, taxes and other financial concerns that your POA has to manage on your behalf. This/these persons should not be walking in blind, if you can help it.


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## ian (Jun 18, 2016)

My perspective is that it comes down to cost and benefit.

That equation varies with each individual.

There is no right answer.

The only thing that matters is that the service level , the advice, and the results that you obtain are commensurate with the cost from a competitive perspective.


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## Covariance (Oct 20, 2020)

switch01 said:


> 2% is it.


If you were sitting here drinking an espresso with me I would tell you it sounds like they want you to take your business elsewhere. Or if you are in a remote community they are the only advisor in town.


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## OptsyEagle (Nov 29, 2009)

Bobcajun said:


> It is mostly liquidating the portfolio on death that concerns me. I am not quite sure how to go about that. If i engage a financial advisor and or an accountant now, they will advise about my present situation. This, I don’t think I need. I need really advice on how to liquidate our assets in the most tax efficient manner on death.


I think you are looking to the future when the problem at death will be a look to the past and present. There is really no maximizing the liquidating of a portfolio at death. From a tax perspective, you probably know that you are deemed to have disposed of everything you own at death. Once you go flatline, it is done. If a spouse is involved we are then talking about the 2nd death but the premise is still the same.

There is really little managing of the portfolio or liquidating to maximize taxation or even investment returns. If there is probate required then the portfolio will be maintained as it was before death until the probate letters are received but again, no managing is involved. The portfolio will be frozen. Once the probate letters are received, or before if they are not required, your executor is responsible and the best advice I could give them is to liquidate everything on the first day they can and transfer it to the estate bank account and then proceed to file some tax returns. If some holdings are large then perhaps you can instruct them to sell smaller amounts with respect to the daily liquidity of the investments but even that has as much risk as it has benefit. In most cases, selling "at the market" on day 1 is what I would probably proceed to do if I was your executor. Perhaps if I had a better look at your assets I might make a few adjustments but in most cases probably not.

I am advising blind here but my main point is that you will need to prepare for this eventuality and all that falls into current estate planning...not estate planning after death.


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## Plugging Along (Jan 3, 2011)

Bobcajun said:


> Thanks very much for your helpful advice. My problem is that I believe we only need financial advice on our deaths. I am fairly well aware of investing principles and tax principles for our portfolio while l am alive. ( Although I realise that there could be things that i am missing). It is mostly liquidating the portfolio on death that concerns me. I am not quite sure how to go about that. If i engage a financial advisor and or an accountant now, they will advise about my present situation. This, I don’t think I need. I need really advice on how to liquidate our assets in the most tax efficient manner on death.
> 
> All of this has arisen because I recently spoke with a nephew, who is a financial advisor but not in Quebec, so he can’t take me on. And as i say, i am not sure that I would want to join him anyway, as there seems to be a kind of retaining fee associated. But, he or someone like him, would take over the dossier on death, contact the accountants and liquidators on death.


I could be wrong, but after you are dead, there aren't a lot of options to further minimize taxes. There are prescribed rules that need to be followed by the estate.  You would have to engage in the financial advisor, accountant, and possibly a lawyer before death to go over the options, and create plans ahead of time. This could include plans to start liquidating if certain trigger events happen, transferring/selling assets while you are ALIVE, setting up trusts for the members, buying Universal insurance, etc. 

At the time of death, your executor would just follow through on the will and dispose/transfer assets as prescribed. They don't really get that much of a choice on doing it in a tax efficient way if tools like trusts are not set up ahead of time.


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## Eclectic21 (Jun 25, 2021)

Bobcajun said:


> ... My problem is that I believe we only need financial advice on our deaths.


AFAICT, from my relatives estates - where one is single or it is the second spouse that has died, there is no financial advance "on death". At that point, one is deemed to have sold everything and whatever was setup up in advance with the executor (including encouraging the executor to use experts as needed) and/or through the will is what is possible.

I suspect that what you need is estate planning, in advance of the death.




Bobcajun said:


> ... It is mostly liquidating the portfolio on death that concerns me. I am not quite sure how to go about that. If i engage a financial advisor and or an accountant now, they will advise about my present situation. This, I don’t think I need. I need really advice on how to liquidate our assets in the most tax efficient manner on death.


There's nothing I am aware of that changes the deemed liquidation (assuming this is the second death of a couple or a single person) or that taxes that have to be reported.

There are actions the executor can take when filing the tax return that can reduce the tax bill. AFAICT, one needs to be sure the executor is aware of or had engaged experts to assist in the process. A few actions like making charitable donations (whether cash or shares with large capital gains) likely need to be in the will.

It sounds to me that it's not a financial advisor but an estate planner and possibly tax expert that is needed.


Cheers


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## Bobcajun (May 15, 2018)

Thanks everyone for your response. I spoke informally with a financial advisor and from that conversation I understood that tax planning could take place after you are gone. The executor receives the portfolio and decides how to dispose of it. For instance, stocks with large capital gains could be used for charitable donations. In that way avoiding tax. I imagine there are other strategies as well. Now, i may be wrong on this. As someone mentioned my next step should probably be to see a financial planner with expertise in tax issues. But as i mentioned earlier, such a person could only look at the situation now, which might be quite different from when i am gone. It seems very strange to me, though, that all things are sold on death. I understand that all things would be CONSIDERED sold on one’s death. That is if one has one million or two million or whatever on the day one died, that is the figure that the tax man would use. But i wouldn’t think that everything would be literally sold and therefore the executor could deal with it in the most tax efficient manner. Anyhow, i will have to check into it further. 
thanks againfor all the suggestions
Bob


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## ian (Jun 18, 2016)

I would add one thing. 

You really need to understand the fee structure and watch out for the 'hidden' fees. 

It is difficult to do the cost/benefit ratio if you do not have line of sight to the entire fee structure.


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## OptsyEagle (Nov 29, 2009)

Bobcajun said:


> But i wouldn’t think that everything would be literally sold and therefore the executor could deal with it in the most tax efficient manner.


That is not really the case. The executor will simply pay the amount of tax owed. It is your job, during the estate planning that happens before you die, to ensure your estate is distributed with the least amount of taxes payable.

As for charitable giving. I have yet to see the strategy where the tax savings obtained from any charitable gift plan, ends up providing more money to the person or estate then what would be obtained if the amount that was gifted, was simply kept by the person or the estate. In other words, the tax savings involved in most charitable giving schemes will render a tax savings of something less then the value of the after tax value of the asset that is being gifted. So an executor would have to be willing to reduce the inheritances to the beneficiaries to proceed with a charitable gift and that would be a violation of their duty to the beneficiaries. The only way it would get done, or should get done, is if it was specified within the will.


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## Bobcajun (May 15, 2018)

I am not sure that I understand all of this discussion. Which means that I will have to speak to an expert. But this conversation is allowing me to know what to look at. Regarding the charitable giving that you mentioned, th exact percentage and names of the organizations are written in our will. So the executor, i imagine, just needs to follow that directive. Exactly which stocks to use for that purpose is not specified, and i don’t see how it could be, given that a lot could change between now and then. Just writing this to let you know that I am listening and trying to understand. 
bob


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## Money172375 (Jun 29, 2018)

Bobcajun said:


> I am not sure that I understand all of this discussion. Which means that I will have to speak to an expert. But this conversation is allowing me to know what to look at. Regarding the charitable giving that you mentioned, th exact percentage and names of the organizations are written in our will. So the executor, i imagine, just needs to follow that directive. Exactly which stocks to use for that purpose is not specified, and i don’t see how it could be, given that a lot could change between now and then. Just writing this to let you know that I am listening and trying to understand.
> bob


All the major banks offer executor and executor assistance services. Sounds like the “investment management” is looked after by yourself. These specialists are different from advisors in the traditional sense. Worth having a discussion.


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## Plugging Along (Jan 3, 2011)

Bobcajun said:


> I am not sure that I understand all of this discussion. Which means that I will have to speak to an expert. But this conversation is allowing me to know what to look at. Regarding the charitable giving that you mentioned, th exact percentage and names of the organizations are written in our will. So the executor, i imagine, just needs to follow that directive. Exactly which stocks to use for that purpose is not specified, and i don’t see how it could be, given that a lot could change between now and then. Just writing this to let you know that I am listening and trying to understand.
> bob


You may want to speak to financial planner or a group (could be a lawyer too) that specializes in estate planning before you die. 

The example of charities is that you can choose to give a dollar amount in cash, which is after the estate has settle and sold off it's portfolio. The amount given to the charity in cash is the after tax amount, then the estate gets the charity donation based on the cash amount. If the equivalent dollar amount was given to the charity but in shares (not sold), then there is no tax because it's going to a charity and there is the tax deduction for the same amount. This is one simple example. HOWEVER, from a legal and estate planning standpoint, your lawyer may advise you NOT to put any charity in your will and have your beneficiaries give a donation afterwards. The reason is that charities have nothing to lose by contesting the will as all fee comes from the estate. So there are some charities that have people that just try and get more money from estates. 

These are reason I don't recommend DIY wills and have professionals such as accountants and estate planners.


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## Bobcajun (May 15, 2018)

Very good points once again Plugging Along. Thank you very much. More complicated than i thought. 
bob


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## Eclectic21 (Jun 25, 2021)

Bobcajun said:


> ... I spoke informally with a financial advisor and from that conversation I understood that tax planning could take place after you are gone. The executor receives the portfolio and decides how to dispose of it. For instance, stocks with large capital gains could be used for charitable donations. In that way avoiding tax. I imagine there are other strategies as well ...


Sure ... but they are going to be limited to what one could do when preparing one's tax return.

Things that require setup in advance like arranging beneficiaries to pay for sufficient life insurance to cover the taxes on a cottage won't be available, after death.




Bobcajun said:


> ... But as i mentioned earlier, such a person could only look at the situation now, which might be quite different from when i am gone.


I don't think they will have any additional methods, no matter what the specific situation is. For example, FMV today is $300K while at death FMV is $900K, using capital losses to reduce capital gains will be the same process. Carrying charges might be different but the process will be the same.


Cheers


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## AltaRed (Jun 8, 2009)

The only significant tax planning that can be done as a result of death is regarding charitable giving. There is a lot of material on various 'charitable foundation' sites demonstrating how this works (they provide that as a means of hoping to attract giving).

In essence, if one is going to leave some part of one's estate to charitable causes in one's Will, then it is best to donate securities that have the highest percentage appreciation...because the entire value of the appreciated stock becomes a tax credit. Example: Stock A had an ACB of $50k. It appreciated to $200k. If one was simply going to crystallize the sale of Stock A, there would be a taxable capital gains disposition of $150k and tax would be paid on that. However, if Stock A was donated to charity, the deceased would get a full charitable tax credit of $200k that can then be applied to capital gains elsewhere. It is ALWAYS more attractive taxation wise to donate appreciated assets to charity in kind rather than to make cash donations.

The key is to ensure one's Executor knows about this opportunity rather than arbitrarily selling everything. Tax accountants know this stuff but sometimes Executors go about doing things with the estate before talking to a tax accountant.

Bobcajun does not need a financial advisor, and especially not one as a result of death. What Bobcajun needs to know is this charitable giving option IF he plans to leave anything to charity and ensure his Executor knows about it and gets tax help. The only other tax wrinkle that can apply after death is to carryback capital losses that might occur in the estate (testamentary trust) between the time of death and the end of that estate tax year (or disbursement), so that any such losses can offset capital gains in an amended Final T1 return. Again that is something tax accountants know about.

In the case of a POA situation, Bob's POA should consider whether or not to start crystallizing unrealized cap gains on an annual basis to potentially reduce the MTR upon death....to spread the cap gains tax over multiple years, even if buying back the same asset. That might work if someone who becomes incompetent goes on to live multiple years thereafter. It doesn't help if Bob becomes incompetent and then dares to die a short time later (same tax year). When my mother got to age 90 and I knew she most likely didn't have more than 5 years left, I as POA did exactly that. I started crystallizing unrealized capital gains in her holdings each tax year so that by the time she died at age 96, there wasn't much left in the way of unrealized cap gains.


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## gardner (Feb 13, 2014)

AltaRed said:


> if someone who becomes incompetent goes on to live multiple years thereafter.


I believe that this is a common situation that deserves planning -- perhaps the more likely scenario vs competency up to the end.


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