From Inheritance to Legacy: The First 7 Steps to Take in Kelowna

The arrival of a significant inheritance can be surprisingly disorienting. The world sees a windfall; you feel the immense weight of a legacy placed in your hands. It’s a sacred trust, and the responsibility to steward it well can feel isolating and complex.

Before a single dollar is moved, invested, or spent, there is critical work to be done. This is not a time for hasty decisions driven by emotion or unsolicited advice. It is a time for quiet, deliberate action. As a Personal CFO, my role is to help families like yours architect a plan that honours the past while building a foundation for your future.

Here are the first seven steps I guide my clients through, to move from a place of overwhelm to one of quiet confidence.

Step 1: When Should I Pause and Do Nothing?

Immediately. The most important first step is to take a strategic pause. Grant yourself the time and space to process the emotional gravity of the moment without the added pressure of financial decision-making. Well-meaning friends and family will offer advice, and the financial industry will present you with a dizzying array of "opportunities." Resist the urge to act on any of it.

Your only task right now is to safeguard the capital. This means ensuring the funds are secure in a high-interest savings account, safe from market fluctuations and premature commitments. This pause is not passive; it is an active strategy to create the clarity required for the important work ahead.

Step 2: How Do I Assemble My Professional Team?

You cannot, and should not, navigate this alone. A common mistake is to rely solely on the family's long-standing advisors, who may have been excellent for the previous generation but may not be the right fit for your unique vision. Now is the time to build your team—a circle of professional stewards who will report directly to you.

This team should, at a minimum, include:

• A Lawyer: Specializing in estates and trusts here in British Columbia to ensure all legal obligations are met, including the probate process.

• An Accountant (CPA): To navigate the tax implications, such as clearance certificates from the Canada Revenue Agency (CRA) and final tax returns for the estate.

• A Personal CFO: An advisor who can act as the "quarterback," coordinating the expertise of the other professionals to architect a single, cohesive strategy that aligns with your personal values.

Step 3: What Key Documents Do I Need to Locate?

Your next action is to gather the essential paperwork. This process of creating order is a crucial step in moving from chaos to clarity. Before any meaningful planning can occur, you and your professional team will need to review several key documents.

Locate your official Will, any trust documents, insurance policies, recent investments and bank statements, and property deeds. This financial inventory forms the factual bedrock of your plan. It will provide a clear picture of the assets you are now responsible for and inform the specific legal and tax obligations that need to be addressed.

Step 4: How Do I Understand the Tax Implications in Canada?

It's a common misconception in Canada that inheritances themselves are "tax-free." While it's true that you, the beneficiary, do not pay a direct inheritance tax, the estate itself is responsible for settling a final tax bill.

In Canada, the deceased is deemed to have sold all their assets—like stocks or investment properties—at fair market value just before their passing. This can trigger significant capital gains taxes that must be paid by the estate before the assets are distributed to you. Understanding this "deemed disposition" is critical. Your accountant will be an indispensable partner here, ensuring the final T1 tax return for the deceased is filed correctly and that all CRA obligations are satisfied.

Step 5: Should I Pay Off My Debts?

Once the initial administrative tasks are complete, the first strategic question often becomes: "What should I do with the money?" The most common impulse is to eliminate all personal debt, such as a mortgage, car loans, or lines of credit.

This can be a powerful and emotionally satisfying step, creating an immediate sense of freedom and security. However, it's a decision that requires careful analysis. We must weigh the interest rate on your debt against the potential long-term growth of the capital if it were invested. For high-interest debt, the answer is almost always to pay it off. For low-interest debt, like a mortgage, the decision is more nuanced. It’s a conversation about balancing financial optimization with personal peace of mind.

Step 6: How Do I Clarify My Own Vision?

This is the most important step, and the one most often overlooked. Before you can build a financial plan, you must first distill your personal vision. What is this inheritance meant to achieve—not just for you, but for the generations that will follow?

Is its purpose to provide freedom from work? To fund a philanthropic mission? To secure your children's educational future? To create a lasting family legacy?

Answering these deeply personal questions is the true work of stewardship. A financial plan without a connection to your core values is just a collection of products. A plan built on the foundation of your purpose becomes a powerful tool for a flourishing life.

Step 7: How Do I Build a Thoughtful Financial Plan?

Only after you have completed the first six steps are you truly ready to architect a financial plan. This plan will be the bridge between the legacy you've received and the vision you've defined.

This process involves more than just investing. It involves structuring your affairs to be as tax-efficient as possible, making full use of registered accounts like your Tax-Free Savings Account (TFSA) and Registered Retirement Savings Plan (RRSP). It involves creating a formal investment policy statement that reflects your risk tolerance and long-term goals. And it involves building a plan that is resilient enough to withstand market volatility and adaptable enough to evolve with your life.

This is the final step in transforming a disorienting event into a deliberate, multi-generational plan.

Frequently Asked Questions

What is probate, and does it apply in British Columbia?

Probate is the legal process where a court validates a will and confirms the executor's authority to distribute the estate's assets. Yes, it is a required process in British Columbia, and your lawyer will guide you through the specific fees and application procedures.

How long should I wait before making any big financial decisions?

I advise my clients to wait a minimum of six months, and often up to a year. This "decision-free zone" allows time for the initial emotional intensity to subside and provides the space needed to complete the essential administrative and legal work without pressure.

Do I have to pay tax on a home I inherit in Kelowna?

If you inherit the principal residence of the deceased, you will not have to pay capital gains tax if you sell it. However, if you inherit a second property, like a vacation home or rental property, there will likely be capital gains tax payable by the estate based on the increase in its value over the years.

Receiving an inheritance is a profound moment. It is the closing of one chapter and the beginning of another, and it deserves to be handled with intention and wisdom.

If you are ready to move from insight to action, I invite you to start your free, 5-minute Private Assessment.

Start Your Confidential Stewardship Assessment

By Rolf Issler, BMgt, CLU®

Personal CFO for Founders & Families in Kelowna

ProsperWise Advisors