Your parents, spouse and estate planning
Now is the time to tackle the tough questions and put future financial matters to rest
When was the last time you discussed estate matters with your parents or spouse? If you're like a lot of Canadians, the answer is probably never. Nearly half of Canadians over age 45 have not talked with their parents about their funeral plans, or leaving a legacy for younger generations in the family. Three out of four Canadians have not participated in a meeting with their parents and siblings to discuss their parents' wills.*
"People tend to shy away from the difficult topics of death and money until there is an urgent need to have those discussions, usually when their parents or children are much older," says Debbie Ammeter, Vice President of Advanced Financial Planning for Investors Group. "But the potential for regret, hard feelings and a reduction in estate assets are greatly increased if families don't take the time to discuss - and iron out - estate planning issues."
“Dialogue among the family is usually the best way to reduce potential inheritance hostilities and to help make certain long-term resentment doesn't result. It is also the best way to help ensure an effective estate plan is in place to minimize the tax burden.”
Start conversations and plan for everyone
Here are some tips for improving communication about money and estate matters with your parents or spouse:
- Identify a non-threatening way to begin discussing issues related to estate planning. Use the fact that you are revising your financial plan as an icebreaker. Or offer to share some pamphlets or written information with them. "My Legacy Will Be" is a guide produced by Investors Group that is a good starting point for discussing estate planning issues. If you're interested in receiving a copy, contact your Investors Group Consultant.
- Ensure you've included everyone who will be affected by the estate plan so that no one feels excluded.
- To help keep the conversation more professional and less emotional, consider having a neutral third party with experience in these matters facilitate a discussion.
Seek professional help
You may wish to include a lawyer and an accountant, as well as other key people as part of your estate planning team. Your Investors Group Consultant can assume the role of 'quarterback' to ensure everyone stays on the same page and develops the right strategies for your unique situation.
Six steps to a sensible estate plan
Whether you're engaged in estate planning with your parents or spouse, here are some steps to take:
- Assemble a clear picture of your financial situation. List all sources of income, registered and non-registered assets, current and future expenses, and insurance plans. Investors Group's “Personal Records Organizer" can help with this task. Contact your Investors Group Consultant for a copy.
- Get your legal life in order. About half of adult Canadians don't have a will - yet without a will, the deceased person's wishes are not taken into account, and their estate may be subject to unnecessary fees and taxes. That's why an up-to-date will is a must - it helps ensure your legacy will be passed on as you wish.
- Designate a Personal Representative. (Sometimes called an executor, or in Quebec, a liquidator). This person (or trust company) will be responsible for winding up the affairs of the estate and distributing assets and bequests.
- Consider an enduring power of attorney (where allowed) to give a designated person (the attorney) the power to make financial decisions on your behalf, even if you become incapacitated. Also consider a living will that provides explicit directions about the personal and medical care to be provided for you if you become incapacitated.
- Share information about the location of important legal papers such as wills, as well as the location of bank accounts and safety deposit boxes with your personal representative(s).
- Plan for the funeral. Without a plan, this grueling ordeal is made worse at a time when grief may cloud judgment - and funerals can be very expensive. By clearly understanding what kind of funeral you would like, you can project a reasonable cost, and perhaps buy a life insurance policy to help ensure the survivors have the resources to take care of the funeral or even prepay for the arrangements.
Discussing estate plans with your parent’s or spouse can be difficult. When you are ready, your Investors Group Consultant can act as an outside representative to make the conversation easier and to ensure all of the necessary estates planning matters are addressed.
* 2005 Decima Research telephone survey for Investors Group
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This article, written and published by Investors Group Financial Services Inc., is presented as a general source of information only and is not intended as a solicitation to buy or sell investments, nor is it intended to provide professional advice including, without limitation, investment, financial, legal, accounting or tax advice. For more information on this topic or on any other investment or financial matters, please contact your Investors Group Consultant.
© Copyright 2007, Investors Group. All rights reserved. Do not reproduce without the express written consent of Investors Group.
