Mom just got divorced. She gets a good part of the assets from the marriage, and has a >$2M stash. My main concern is to help her live off income from the stash and grow it as much as possible.
- She lives in Canada
- She's retired
- She owns a house, no mortgage or other debt
- She's got a lot of dough tied up in a few US stocks, some dividend paying. But in Canada, tax benefits of US dividend stocks aren't as good, as she can't get the 15% withholding tax refunded.
I'm trying to steer her away from US stocks, due to withholding tax on dividends as well as possible tax liabilities to her estate when she passes away... and into a portfolio of Canadian dividend stocks, some index funds/ETFs that track the total stock market, and a small percentage into bonds/GICs, something liquid in case she needs cash fast.
Does the strategy of avoiding US stocks make sense for a Canadian? US stocks offer some juicy dividend returns, and there's such a diversity of them, so they're attractive from an investment point of view but the potential estate tax liabilities are worrisome. And the 15% withholding tax eats away a lot of the returns. With no other income, she can't claim a foreign tax credit.
Am I being too aggressive trying to get her mostly into equities? She's mid-50s, maybe so much risk isn't a good thing.
What would you do for your mom?