Life Changes Require Updating Your Will

Many people assume wills are a “once and done” type of project. That’s not the case. The reality is that wills need to be regularly reviewed and updated if you’ve had a major change in your life. Here are a handful of occasions where another look at your will is a necessity.

A New Addition to the Family: A newborn needs lots of attention, especially in the early years. But you also need to prepare for the worst. What if you are unable to care for your child due to an accident or serious injury? Designating a guardian is crucial so that someone is prepared to take physical custody of your children and their assets. You should also ensure that the newest addition to your family gets his or her fair share of your inheritance, particularly if other children are already named in the original will.

Common-law marriage: Living common law has become much more frequent in recent years as some couples question the utility (and high cost) of marriage. However, in many Canadian jurisdictions, common law spouses don’t have the same right as married ones. It may be unfair, but it’s important to know the rules in your province and to structure your will and estate plan in a way that best reflects your intentions with respect to your partner.

Divorce: Of course, a separation or divorce will require an update to your will. It’s likely your spouse is named as the beneficiary in most of your investments, such RRSPs, TFSAs and pensions. You’ll want to change that so that your former spouse doesn’t receive any of your money, unless they are legally entitled to some of those funds.

Second marriage: If you opt to get married again later in life when grown-up kids are in the picture, you’ll want to take another look at your will. Does your new spouse deserve a share of your estate? It can be a complicated question. At the least, try to ensure that your child’s inheritance is received directly from you, without any involvement from the new spouse. Not that they can’t be trusted, but you want to make the transition as simple as possible. It’s important to ensure that children from a previous relationship aren’t disinherited when you have a new spouse.

Caring for the disabled: Special needs children will always require detailed attention in any will. It’s possible you’ll need to support them for the rest of their lives, so make sure that fact is spelled out in your will. Think about the child’s long-term needs and act accordingly. In such cases, you might need a lawyer who specializes in such cases to cover all the bases.

In any event, it’s always a good idea to have your financial advisor and your lawyer involved in the process of drawing up your will. Each brings a different skill set to the table. Their expertise will help ease what can often be a difficult process.

Dwayne Rettinger

Executive Financial Consultant

Investors Group Financial Services Inc.

Rettinger & Associates Private Wealth Management

www.rettingerandassociates.com

This is a general source of information only. It is not intended to provide personalized tax, legal or investment advice, and is not intended as a solicitation to purchase securities. Dwayne Rettinger is solely responsible for its content. For more information on this topic or any other financial matter, please contact an Investors Group Consultant.

Why More Canadians Are Retiring With Debt and What It Means

As Canadians, we live in a country where certain rights and freedoms are expected, hoped for and, some might say, taken for granted. The freedom to retire early is one many of us begin grappling with as we approach middle age. Ironically, many Canadians won’t be ready to retire until they are significantly older.

The reason? Debt.

Unfortunately, too many retired people – 34% — over 55 years old still carry consumer debt, according to Statistics Canada. In fact, a recent Equifax Canada report found that the debt load of seniors is outpacing that of their younger counterparts.

It’s not as though Canadians have always carried a heavy debt burden. In 2012, 42.5% of people over 65 still had debt, a jump of 55% when compared to seniors in 1999.

A number of economic, social and cultural factors are to blame, say experts. They point to divorce, illness and large mortgages as some of the culprits. Experts also explain that children, grandchildren and other family members may also be at fault, as they often look to their parents and grandparents to lend them hand. In fact, a 2015 survey showed that 18% of first-time home buyers are gifted their down payments thanks to relatives, typically parents.

But, children can’t shoulder all of the blame.

Low interest rates have made debt much more attractive. Further, cottages, pricey vacations, fancy cars and other expensive toys may be out of reach for the average pensioner. Paring down and cutting back in your sixties may not seem fair. After all, you’ve worked decades, aren’t you entitled to a little luxury? Your fixed retirement income simply may not support your lifestyle any more. Perhaps it’s time to downsize and sell your 3,000 square-foot home?

If selling isn’t an option, many house-rich, cash-poor seniors can look to their houses for equity. Often by the time a person retires, he or she has either paid off their mortgage or is only owing a small amount. Because house values have increased in recent years, in some markets quite significantly, tapping into a home’s equity may be something to consider.

Still, as a borrower, you need to be aware of how you are intending to pay back the loan. Is it possible to make monthly payments or would you prefer to have your estate pay off the loan after you die?

No matter how the money is borrowed, the process should be well planned out. Know what you need it for. Have a repayment plan in place. Don’t borrow more than you need – that often leads to trouble.

Dwayne Rettinger

Executive Financial Consultant

Investors Group Financial Services Inc.

Rettinger & Associates Private Wealth Management

www.rettingerandassociates.com

This is a general source of information only. It is not intended to provide personalized tax, legal or investment advice, and is not intended as a solicitation to purchase securities. Dwayne Rettinger is solely responsible for its content. For more information on this topic or any other financial matter, please contact an Investors Group Consultant.