How to Decide Who Should be The Executor of Your Will

How to Decide Who Should be The Executor of Your Will

by AgingEstate PlanningInheritance

When you create your will, one of the most important things you need to do is choose your executor. This is an important role that comes with the responsibility of taking care of the probate process, estate inventory, payments and notifications, final tax returns, and distributing your assets. You need to choose someone who is reliable, organized, and honest enough to carry out your estate exactly as you planned. To help you make a well-informed decision, here are some of the factors to consider when trying to decide who should be the executor of your will.

Family Dynamics

The majority of people prefer to choose a family member as their executor. While this can be a more comforting choice, it’s not always the right one. If your family is already experiencing conflict, then choosing one over the other as an executor will only lead to more problems. If this is the case, you may want to select a reliable friend or a third party to carry out your will.

Health and Resilience

Your ideal executor should be of good health and younger than you. They’ll also have the patience to carry out the lengthy process and deal with government agencies and the banks. Being the executor of a will is a truly stressful responsibility to — they need to be ready for that.

Proximity

It’s essential that the person who you choose lives in the same area as you. It’s not only easier to deal with the process when you’re close by, but it could also speed up the process. There may be regulations in place that will prevent you from choosing someone outside of province or state. It’s important to check with your local jurisdiction to find out what is required if you decide to go this route.

Experience

Although a degree in finance and accounting is not required to be an executor, it’s always wise to choose someone who has experience working with finances in some capacity or is willing to do the research. There will be a number of documents and tax forms that will need to be filled out, followed up on, and managed into the future, so it’s important to choose someone who is comfortable with bookkeeping and dealing with all the relevant agencies.

Deciding who to assign as the executor of your will is an important decision and one that should be given careful thought. At The Beacon Group of Assante Financial Management Ltd., we are dedicated to managing and securing the finances and assets entrusted by our clients. Contact us today to learn how we can protect your legacy.

What to do When Your Sweetheart Retires Before You?

What to Do When Your Sweetheart Retires Before You

by Aging

Not every couple is lucky enough to retire at the same time. In most relationships, partners will retire in different years, creating a sudden shift in home dynamics. It’s even likely that your spouse may decide to return to work for financial reasons or to maintain health benefits (which can be a test for any marriage). When one spouse is sleeping in while the other is getting up to go to work, the gap in retirement timing can make things complicated and create an unbalance in priorities. So, what do you do when your sweetheart retires before you? Here’s what:

Communicate

It’s important to know what retirement means to you and your partner. If you’re planning to put in a few more years of work and your partner is looking forward to travelling the world, you will likely have a conflict. To ensure it’s mutually satisfying, you need to talk it out so that each person can voice their opinions and concerns before the adjustment period begins. During the discussion, you should both ask important questions like “what do I want to do during my retirement?” and “can we afford to both retire at the same time?” or “what changes to our responsibilities can we make to create balance in our relationship?” By finding common ground, you can avoid any feelings of resentment and find ways to support each other through this challenging yet rewarding transition.

Plan the Timing

It’s important to decide who should retire first and how the loss of income and health plan will impact your lifestyle. For instance, living on one paycheck instead of two might require you to sell the home and relocate, which can cause strain on the other spouse’s employment situation. It might even make more sense for one person to work a couple of extra years so you can retire together. Becoming clear on timing can help to ensure that you and your spouse make the best decision for your future together.

Clarify Your Roles

It’s unlikely that your retirement dream involves doing all the household chores, shopping, and running around during the day, but if you retire first, that’s likely to be the case. This sudden shift in dynamic is why many couples experience tension during this phase. If your spouse doesn’t currently participate in household duties like shopping and vacuuming, they’re likely not going to be looking forward to these when they retire. It’s important to clarify these roles now so that you both can ease into the transition without becoming bitter along the way.

Create a New Routine

When one spouse is no longer working, it’s bound to upset your regular routine — it’s best to work out a new schedule that will allow you to spend quality time together when you’re both at home. Having a shared bedtime and planning nighttime activities together can ensure that your marriage will remain a healthy one for the remainder of your days.

If your sweetheart retires before you, it’s essential to be clear on your expectations and goals. In doing so, it will help support your personal mental health and shared relationship well into the future. Remember, your retirements should be exciting —practice positivity!

Long Term Care Settle It Before the Time Comes

Long-Term Care: Settle it Before the Time Comes

by AgingFinancial PlanningTax Planning

As you enter your “golden” years, the reality is that it can often be too late to protect your family from unforeseen events as you continue to age. That’s why you need to start planning now for your financial future. If the idea of long-term care is making you lose sleep, it’s time to settle it before the time comes. Let us show you how.

Estate Planning Protects Your Wishes

No one can accurately forecast what will happen in the future. And most people think that having a will is all they need to protect their wishes – but they’re wrong. If you don’t have an estate plan created and something suddenly happens to you, your intentions may not get carried out as you had planned. Only an estate plan can provide clear direction and an accurate representation of your intentions. So take the time now to define what is most important to you and how you wish for your assets to be handled before you can no longer make the decisions for yourself.

Your Assets are Your Retirement

Your more substantial assets are a crucial factor in your overall wealth. If you plan to sell your assets (whatever they may be) or transfer some down to your children, take the time now to make a detailed succession plan. Having a professional financial planner by your side can ensure that you make all the right choices when it comes to obtaining the wealth that you and your family will need during your long-term care.

Tax Planning For Your Future

It’s especially important that you have an effective tax strategy in place that will help minimize the effects of taxation during your long-term care needs. There are a number of strategies that can optimize your tax position such as maximizing government-sponsored programs, creating tax-efficient cash flow, and legacy planning. Tactics like these can help you reduce your taxes and leave you with more money in your pocket for when you need it most.

Insurance Planning Is Your Safety Net

The requirements of long-term care can have a significant impact on your family’s financial future and health. Without a safety net in play, it may be difficult for them to manage all the financial risks associated with any illness or disability. To ensure everyone is protected, it’s crucial to have an insurance plan in place as part of your wealth management strategy. Setting up life insurance coverage will ensure everything is settled before the time comes.

The Beacon Group of Assante Financial Management Ltd., we provide a number of services to ensure that your wealth is always protected. We can help you put a meaningful plan in place that will protect you and your family now and in the future.

The New Retirement Age

The New Retirement Age

by Aging

Sure, you’ve heard forty is the new thirty, but have you heard seventy is the new sixty-five? Not for the same reasons of course – but Canadian lifestyles are shifting nonetheless. With life expectancy on the rise, people are finding it difficult to have enough money to live off well into their eighties and even their nineties. Instead of retiring at the age of sixty-five, many people nowadays are forced (or feel it necessary) to continue working until the age of seventy and even beyond that. That’s why all across Canada the new retirement age is quickly creeping upward.

Read on and find out the main reasons why seniors are returning back to work after the traditional retirement age

Higher Health Care Costs

Seniors often require care when they enter into their eighties and beyond, and the costs associated with medical equipment and supplies, medications, surgeries, in-home care, and long-term care facilities are almost always higher than one expects. Sure, Canada has quality healthcare, but there are lots of other things that are not covered, even under insurance plans. So as a result, many seniors are now adding on a few more years of work to make sure they can cover those costs when they arise.

The Cost of Living is Increasing

Downsizing is becoming more common with seniors. Many are switching to apartment living or maintained condos to get rid of the burden of maintaining their home, and to use the sale proceeds to retire comfortably. Unfortunately, the cost of living has also been on the rise in Canada. Rents are going way up, along with the cost of food and other necessities. And as many seniors begin to see their bank accounts quickly dwindle away, they have little choice but to return to work to make ends meet.

Keeping the Mind Active

With all the research conducted on health and wellbeing out there being popularized, seniors are starting to recognize the important benefits of keeping the mind and body active. They fear that if they just sit at home all day that their health will begin to suffer. To combat the early onset of health problems, many are returning back to work for this reason as well. Staying in the workforce keeps them busy and keeps the body and mind engaged – an added benefit of course is the financial aid.

Catch Up on Finances

Believe it or not, there are many people that retire in Canada with little to no savings as a result of bad luck, and or limited financial planning. In this case, it makes sense for seniors to return back to work to try and catch up on their finances and add a little more to the honeypot. The last thing people want is to transfer their debts to their family members upon their passing.

Don’t wait to have a financial plan put in place. With a comprehensive strategy, you can retire well before the average age of sixty-five. Contact us at The Beacon Group of Assante Financial Management Ltd. today – our advisors can help you build a plan and keep you focused on reaching your goals for a secure and comfortable early retirement.

The 5 Most Important Benefits of Having an Estate Plan

The 5 Most Important Benefits of Having an Estate Plan

by AgingEstate Planning

Many people make an assumption that they don’t need estate planning, or they can’t benefit from it in a tangible way. Estate planning is something that can greatly benefit everyone, not just the rich and famous. Estate planning gives you the opportunity to essentially map out how you want your assets, among other important items, handled following your death. This ensures that your finances, your home, and your business are all managed according to your wishes and that your family is provided for after you pass away.

Here are five important benefits of having an estate plan.

State Your Wishes if Incapacitated

One of the most important benefits of creating an estate plan is that it allows you to plan for unpredictable events that life may throw your way. Accidents and physical or mental illnesses can blindside you at a moment’s notice. We never like to think of these events occurring, but the reality is that planning for them is much better than being left at the will of others making decisions on your behalf. An estate plan will clearly outline all of your wishes when it comes to major life and medical-based decisions if something does ever occur.

Select Guardians for Children

If you have young children, having a plan set in place will nominate a guardian of your choice for looking after your children following your death. This can provide peace of mind knowing that the decision won’t be left in the hands of the courts, and will instead, be determined according to your wishes.

Establish Trustees of Your Estate

Choosing someone you know and trust to oversee the details of your estate ensures everything is kept in order and in line with your wishes. Giving authority to someone you choose can also help alleviate the burden on your family, along with any potential conflict, and simplify the administration process of your assets.

Provide for Your Family

Providing for your family in the case of your death is another crucial factor for establishing an estate plan. This will help allocate money to the appropriate family members, helping to provide for them, or even your children if anything were to happen to both parents.

Protect Your Business and Legacy

If you own a business, an estate plan can help ensure that it continues to operate according to your wishes by establishing an orderly succession. You get to decide what happens to your business and your legacy after you pass on.

Wouldn’t you want to have the final word on how your finances, home, and family are treated after you pass away? Estate planning is crucial to ensure that your wishes, your assets, and your loved ones are looked after and protected in the case of your death. When you’re ready to create your estate plan, contact us at The Beacon Group of Assante Financial Management Ltd. We can guide you through the process and help you safeguard your assets.

Beyond the Will: What’s Involved in Estate Planning?

Beyond the Will: What’s Involved in Estate Planning?

by AgingEstate PlanningFinancial Planning

Every Canadian should have a will. We understand how uncomfortable this discussion and process can be, but it’s crucial to take care of to gain peace of mind and to know that your family and your assets are well taken care of. A Will allows you to determine how you want your possessions and estate handled, who the executor will be, and who the guardians of your children will be if something should ever happen to you.

If you’re wondering what’s involved in estate planning, here’s what you need to know when it comes to gaining that important peace of mind during the creation of your Will.

 

Create your Will

An essential part of estate planning is creating your Will. This key legal document outlines how your assets will be distributed and to which beneficiaries. It also stipulates who will be responsible for ensuring your wishes are carried out exactly as you planned.

 

Name the Executor

Naming your executor is the next important step of your Will planning process.  This person or corporation will have the responsibility for carrying out your wishes after you pass away.  This named individual will also have the responsibility to issue payment from your bank account to cover any taxes or debts that you owe.

 

Choose the Power of Attorney

Important to your estate planning is also determining a Power of Attorney. This refers to someone you designate to have the power and legal precedence to make any financial or health-related decisions on your behalf.

 

Set up your Insurance

Many people underestimate the amount of money that’s necessary to cover the funeral expenses, taxes, debts, and probate fees. Setting up a life insurance policy can help reduce these burdens on your family and can also help your heirs receive inheritance money to help them out in the future.

 

Ensure Business Continuity

Without a plan for business continuity, you may end up leaving your business partners or family members in a bind. Instead, plan out how your business will operate after you pass on.

 

Outline Personal Care and Funeral Arrangements

Without a detailed plan on personal care and funeral arrangements, your family will be left with the burden of making these painful and challenging decisions for you. An estate plan can help you pre-plan your before and aftercare, how it will be paid for, and your desired wishes for the service.

 

Designate Charitable Gifts

If part of your estate plan includes charitable gifting, ensuring this is included in your Will is vital to guaranteeing that your charitable plans will be carried out correctly.

 

Minimize your Income Tax and Probate Fees

Although you’re not charged an estate tax in Canada, there are other fees that do exist in relation to your Will. There are ways that your estate plan can help minimize your fees that will be charged by your province to process and probate your will.

 

Appoint a Guardian

A guardian will be the person you name to take legal custody of your minors in case of your death.

Talk to an advisor at The Beacon Group of Assante Financial Management Ltd. today to help guide you through the process of creating your Will and your estate plan, so you can take care of any unforeseen situations in the future. It will ensure your loved ones are looked after once you are gone, and it will help settle your affairs preventing any further stress or burdens from being placed on your family.

Retiring couple discussing retirement plans

Bridging the Retirement Income Gap with an Annuity

by Aging

As the reality sets in that you’re edging closer towards retirement, finances can become a concern. How will you guarantee consistent retirement income and be able to maintain your established living standards? When in doubt, consider an annuity as a means of avoiding outliving your money and bridging the retirement income gap.

“Mortality Credits” and Timing

Essentially, an annuity is a fixed sum paid on an annual basis for the rest of your life. With mortality in mind, it’s important to consider the pay rate of an annuity, particularly at a later age when monthly payments are higher due to insurance companies assuming a shorter payout period. In actuality, payments are calculated by weighing the effects on your chosen insurance provider’s pool of collective annuity funds with other annuity purchasers who die earlier than anticipated. As morbid as it all sounds, you’d benefit more from timing your annuity purchase when rates are lower, and as early in your retired life as possible.

Important Conditions to Consider

The first thing you should do is carefully read and reread the terms of an annuity, as once signed it can’t be altered in any way. Make sure you plan ahead and opt for terms that suit your present needs and accommodate for the future of your retired life. Also bear in mind that there is no death benefit payable to your beneficiary beyond any guarantee period, and this rule also applies to a joint annuity in the event of the last surviving annuitant’s death. With these conditions considered, you need to learn about and select an annuity plan that is ideal for your present situation. Whether it’s a life annuity that pays out as long as you live, a joint life annuity that is attached to yourself and another person, or a single or joint term-certain annuity that goes to your beneficiary upon the death of the last surviving annuitant, the plan you choose is what will shape your financial future as a retiree.  

Opting for a Guaranteed Period

In some cases, you can select a guaranteed period of five or ten years if not longer. In this instance, a death benefit will be paid to your beneficiary in the event of the last annuitant’s death. However, it is important to bear in mind that the longer this guarantee period is, the smaller your income cheques will be. Still, it’s a small sacrifice for peace of mind, and many opt for a guaranteed period as a result. Other varieties of annuities are available, including those that defer income for up to ten years (albeit with higher payments), as well as plans that are smaller and sufficiently bridge a gap when leaving an estate as your top priority. This latter alternative enables for you to invest your nest egg balance in a diversified stock and bond portfolio complete with other investments consistent with risk tolerance, which can be left to registered heirs.

In the end, an annuity of any kind acts as a way of maintaining the structural integrity of your finances. As retiring brings with it a loss of wages, it’s important to consider available options, but it is imperative that you opt for a plan that respects your needs. If you require assistance with bolstering your retirement income with an annuity, The Beacon Group of Assante Financial Management Ltd. is fully prepared to help you make the most appropriate decision befitting your needs and future plans.

Adjusting to retirement

Adjusting to Retirement

by AgingLife Changes

Preparing for your retirement takes years of planning and wise investing. It seems as if retirement has been the resounding theme of your financial planning life and when the time comes to put your plan into motion, there can be mixed feelings about it. Not everyone is counting down the days until they retire. Some people dream of days with no commitments or responsibilities, while others thrive in a fast-paced, demanding environment and never want to slow down. Retirement is a time in life met by everyone in their own way. Here are five points to consider when adjusting to retired life.   

Keep Your Mind Busy

A lifetime of having a daily task list and deadlines is a lot to give up. Although retirement is your reward for putting in a lifetime of work, it’s easy for your mind to become overwhelmed with the silence. It’s important to keep yourself and your mind busy once retirement living sets in. Consider doing some small projects to stimulate your mind, or to finally tackle your bucket list of books to read. Just be sure to keep your mind occupied and avoid sitting idle for too long.

Manage Your Spending Appropriately

Since your income picture will have changed with retirement, it’s important to manage your spending to ensure you have enough retirement money to last you the remainder of your life. A discussion with your financial advisor will help to guide your spending habits and make sure your savings and retirement income allow you to live life to its fullest.

Consider Downsizing

If you are retired, there might be more travel in your future which means your big family home might be empty for long periods of time. It might be a good plan to consider downsizing your house to a smaller home, whether that be condo or a bungalow. There will be less maintenance as well as the extra money generated from the sale of your home, and the layout will be more convenient for your lifestyle in your golden years.

Be Aware of Your Portfolio Growth to Predict Financial Future

Now that you are retired you will need to pay closer attention to your portfolio growth to help predict your future spending. The growth of your retirement fund is not something you may have monitored in the past, but now that you are living off of it, knowledge of its growth can help you predict your financial future.

Try Something New!

Retirement can be a time to discover a new passion that you didn’t have time to discover before. Take advantage of a free schedule and do something that you really want to do. Maybe join a dance class, learn pottery or even Tai Chi. Learn to speak Spanish, take up painting, sign up for spin classes, or volunteer with a cause close to your heart. Try something new and challenge your mind and body.

Retirement can be a time of rest and relaxation and personal discovery. Before you plan to retire, book an appointment to meet with your financial advisor to discuss your portfolio and ensure that your financial needs will be met in retirement.

Preventing conflict between heirs

Preventing Conflict Between Heirs

by AgingEstate PlanningInheritance

Every family has their own complications and sometimes a death can exacerbate existing problems. When a parent dies and they are survived by their adult children who don’t have the most harmonious relationships or dynamics, this could affect their inheritance. Disputes between heirs in an estate distribution is a very common occurrence, and unfortunately can tie up a lot of time and estate funds if the disputes lead to estate litigation. If you think there is the potential for conflict with your future estate, it may be beneficial to set up some preventative measures while you have the capacity to do so. Here are some options to consider.

Jointly Held Assets

A good example of this is joint bank accounts. Often, aging parents will have trustworthy and geographically accessible children be joint on their accounts to assist with paying bills or as part of a tax planning strategy. The problem arises upon death and the bank account technically passes automatically to the surviving owner. This could be problematic because technically the bank account would not form part of the estate and not be divisible to the other beneficiaries. In order to avoid this conflict, it should be stated very clearly in the will what is to happen with jointly held accounts.

Family Cottage

Many families have cottages or vacation homes that form part of the estate when the head of the family dies. Problems arise when the heirs to the cottage differ in their desires of what to do with the cottage. This can be upsetting if one heir wishes to keep the cottage while others don’t want to take responsibility for it and wish to sell it. This is an issue that can be dealt with in the will, or even better with an honest discussion prior to death. If it’s clear that one beneficiary wishes to keep the cottage while others wish to sell it, perhaps leave the cottage solely to the heir who wants it and give an equal bequest to the others. If this is not financially possible, then it will be up to the heirs to figure it out amongst themselves.

In Terrorem Clause

Sometimes heirs will challenge a will if they think that they are not left their fair entitlement. Children can be written out of a will or given less of an inheritance at the discretion of the person writing the will. To minimize the chance of having a beneficiary contest the validity of the will, and possibly tie the estate up in litigation, put in an “in terrorem clause,” or an anti-litigation clause in addition to some sort of bequest. This type of clause threatens to take away any bequest in the will should the identified recipient start any litigation challenging the will. This may cause some waves in the distribution of the estate, but if the heir wishes to receive their guaranteed bequest they will be deterred from challenging the will.

There is no way to guarantee that there won’t be conflict between heirs while distributing an estate, but by planning ahead and addressing certain problems surrounding distribution you can help ease the process for your heirs when the time comes. Your financial advisor can help guide the estate planning process to ensure your wishes are met after you pass.

4 retirement misconceptions of business owners.

4 Retirement Misconceptions of Business Owners

by AgingBusinessFinancial Planning

Running a successful business is a lot of work. Much of your time is dedicated to growing and maintaining your business development to ensure the longevity of your business ventures. Oftentimes a small business owner views their company as their retirement fund; the promise of a long-term payout after years of personal investment. This can be a dangerous outlook on retirement for many reasons. Here is a quick breakdown of 4 retirement misconceptions for entrepreneurs.

The Cost of Retirement is Easy to Calculate

Planning financially for the future is more difficult than one might initially think. As a successful business owner, you have likely set a standard of living for you and your family. There is a lifestyle to uphold even after your days at the office are over and done with. Perhaps you have children in post-secondary school who require financial assistance, or maybe you are caring for an elderly parent of your own. Whatever costs are present during your working life will likely follow you into retirement, in addition to whatever costs may be added. It’s difficult to plan in advance exactly how much money you will require to maintain your established standard of living. Also keep in mind that without the demands of your business you are likely going to be spending more on trips and other luxury items. Everything comes with a price tag.

I Know Exactly How Much My Business is Worth

Your business is worth what someone is willing to pay for it. Although there are educated ways to determine the actual value, it still may not be what you have in mind. Business owners have an elevated sense of what their business is worth because it means more to them than just money. However, for a potential purchaser the emotional attachment may not be present and to them it’s just business. Do not overestimate what your business is worth as part of your retirement plan.

My Business is My Sole Retirement Plan

This method of thinking is very dangerous as a small business owner. There are absolutely no guarantees in the business world for never-ending success. In order to secure your future, further retirement plans should be put in place. If business slows and you have to close the doors, would you be able to care for your family? Having a retirement plan that you contribute to on a monthly basis plays an important role in securing financial stability in your future.

I Have a Plan for the Future

Having a plan is a fantastic way to start, however life does not always go according to plans. People can easily get sick, which can be an imposing unforeseen expense. You could pass away before your plan has come to fruition, leaving your family to financially fend for themselves. There are many ways that life can derail your set future plans and having adequate money in a retirement savings is the safest way to protect against unfortunate happenstances.  

Don’t allow your hard-earned money slip through your fingers as you enter retirement. Have a financial plan in place and start contributing early. To discuss other retirement planning strategies, speak with your financial advisor at The Beacon Group of Assante Financial Management Ltd.