In this vein, John shared a great (if not for the beneficiaries) story - if you were wondering, here's where Nortel comes in.
When a person dies, the value of all RRIF assets is deemed to immediately be taken into the deceased's income at fair market value as at the date of their death and taxed. For those too young to recall Nortel's collapse, share prices went from a high of $124.50 in mid-2000 to just 39 cents before the company filed for bankruptcy in early 2009. In John's example, a person who ignored warnings not to put too many eggs in an undiversified basket paid $1 million for Nortel securities in the early 2000s (say 10,000 shares at $100 each) and held them - 80% or so of his portfolio - until his death, expecting that the sale of the securities by the executor would cover taxes due when the time came. Instead of a big inheritance, the deceased would have left beneficiaries with a big shock: a BIG tax bill and little to pay it with. Here's how:
Executors, of course, are not responsible for market moves, a willmaker's poor investment decisions, or a company's bankruptcy, but executors are responsible for safeguarding assets, that is, trying to maintain or protect market value. If the willmaker had died when the shares had declined in value to $500,000, a financial or tax advisor could have recommended selling the shares to at least recover enough to pay the tax due. Executors should get financial advice to minimize their liability and avoid beneficiary charges that they did not take logical steps to try to mitigate losses.
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Headstones are one thing; epitaphs – another. I'll write more on epitaphs in future blogs, but for now, zoom in on this photo taken by Jacob Reibel in Stoney Ridge, New York. These particular "last words" will last a very long time...
 ‘Ah,’ said the cobbler, ‘... What do you supposed ruined me, now?’
‘Wy,’ said Sam ... ‘I s’pose the beginnin’ wos, that you got into debt, eh?’ ‘Never owed a farden [farthing],’ said the cobbler, ‘try again.’ ‘Well perhaps,’ said Sam, you bought houses, which is delicate English for going mad, or took the buildin’, which is a medical term for being incurable.’ The cobbler shook his head and said, ‘Try again.’ ‘You didn’t go to law, I hope?’ said Sam suspiciously. ‘Never in my life,’ replied the cobbler. ‘The fact is, I was ruined by having money left me.’
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