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Your Financial Legacy

When people think about their financial legacy they often typically think of their Will – the document that outlines how to distribute their financial assets after they die.

Many people are under the impression that if they were to die without a Will that their estate would naturally be transferred to their spouse.  Unless the assets were jointly owned with the right of survivorship, this is not in fact the case.

Should you die without a Will in place, you are then to have been considered as dying as “intestate” and the provincial government would then have the right to decide how your assets are divided – not you.  So if you want to ensure that your assets and wishes are directed the way that you want after your death, you really need to ensure that as a minimum you put in place a legally binding Will.

As important as the Will is, there is also the topic of Estate Planning that is much larger and more encompassing plan.  An Estate Plan typically outlines your wishes as it relates to your;

  • financial distribution of assets (your Will)
  • your power of attorney (who you authorize to make decision on your behalf should you be incapacitated)
  • your Living Will (provides instructions regarding your medical care should you be incapacitated or unable to make decisions)

The above is just a general outline of some of the areas that you should consider.  Depending on where you live in Canada, there may be different provincial regulations on what each of these items are either called or encompass and how they are legally enforced.  Your Will, Power of Attorney and Living Will should be developed with the assistance of a lawyer (or a notary in Quebec).

In addition to the standard aspects that you should consider when thinking about your estate, a recent study completed by the BMO Retirement Institute identified three recent changes in our lives that should be considered as well.  These were;

  • Digital Assets
  • Elder Care
  • Pets

When you think about it, our digital identities are spread out across the internet – facebook, banking, investments, blogs, online stores, e-mail, pictures – they can be scattered everywhere.  Do you have a plan in place to manage this?  Do you have instructions on what you would like done?  Would someone be able to access and manage this information for you?

Another topic that the report raised was the issue of elder care.  Currently, 71% of boomers have at least one living relative and given the increase in life expectancy, there is an expectation that there will also be an increase in the amount of elder care a boomer will be supporting.  In your estate plans, you need to make sure that there is an agreed plan as to how this person will be looked after should you become unable to no longer do this or die.  It was also recommended that the elder be engaged in these conversations and decisions if at all possible rather than waiting for a time when they are incapacitated or unable to make their own decisions.

Pets have really become part of the family and three quarters of pet owners think it is important to make arrangements for these members of the family should they leave however only one third have made some type of provision (formal or informal).  So, if you have pet, you might want to make sure that they are taken care of too.

One final area that you may want to consider when creating your financial legacy is the possibility of a planned gift to a non profit or charitable cause.  Should this be something that you are interested in, The Leave a Legacy program is designed to help raise awareness about these options in Canada.

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