There are many personal documents that you must review and/or
update on a regular basis. Many people don't find time to deal
with these very important matters. Following are a few
There are many events that may affect your will such as a
divorce, the death of a beneficiary or trustee and changes in tax
law. It's important that you review your will on a regular
basis to ensure appropriate changes are made. In addition, you may
want to change the beneficiaries of your life insurance policy,
RRIF, RRSP and TFSA etc. A beneficiary has to be named for a RRIF,
TFSA and RRSP. For a RRIF, the amount of tax that would otherwise
result can be deferred if the RRIF contract or deceased's will
names the surviving spouse (or common-law partner) as either a
beneficiary of the RRIF or a successor annuitant. Naming the
surviving spouse as a successor annuitant instead of a beneficiary
of the RRIF provides some additional benefits.
Moreover, a residual beneficiary should be named in your RRSP
and RRIF in case something happens to the primary beneficiary.
Power of Attorney
A power of attorney is a legal document that appoints a person
to act as an agent to manage your financial and/or medical affairs.
There are two types of power of attorney: a power of attorney for
all financial matters and one for personal care if you become
incapable of making health care decisions. Having a power of
attorney will ensure your bills, taxes, accounts, investments and
personal care will be taken care of should you ever become mentally
incapable. Once you have established a power of attorney, you
should review your choice every so often to reevaluate if the
person you have chosen still has the mental and physical ability,
as well as continued trustworthiness, to act on your behalf.
Make sure your insurance coverage for your home, automobiles,
life, disability and critical illness is appropriate. For example,
a condominium corporation has its own insurance to cover the
condominium building, including the common areas and all original
construction inside your unit, such as kitchen and floors. The cost
of this insurance is included in your monthly condo fees.
Therefore, the condo owner's insurance should cover only the
interior walls, fixtures and personal property and any betterments
done in your condominium unit. Accordingly, make sure your
insurance is not covering something that the condominium insurance
already covers. You should review the Standard Unit by-laws to
determine what your condominium insurance covers. Not all
condominiums are the same. Generally, disability and critical
illness insurance should be paid personally in order for the
disability benefit to be tax free upon receipt.
You should summarize your funeral directions since your executor
may not be able to access your will on very short notice. Include
information regarding pre-arranged services, cemetery plots, burial
or cremation instructions, organ donation, etc.
Another important part of keeping your house in order is to
ensure you keep a detailed list of where all your important
documents are located, such as marriage contract, child-support
agreements, trust documents, insurance policies, birth certificate,
passport and credit card information. This should also include
contact information for your investment advisor, insurance agent,
lawyer, accountant, bank accounts, safety deposit box, the names
and contact information for executors and trustees, and names of
guardians for children, if applicable. Being committed to the
upkeep of your personal documents is important so that when the
time comes for these documents to be executed, it ensures that they
are used the way they are intended. Taking the time to review these
documents on a regular basis ensures the future well-being of your
assets – especially the most important ones – your
It is not uncommon for parents to provide monetary gifts to their adult children. Parents may wish to help their child with a down payment on a property, or help pay out their child's existing mortgage.
On March 31, 2014, BC's new Wills, Estates and Succession Act1 ("WESA") will come into force. WESA introduces new protections for beneficiaries of estates that are in danger of being disputed or deemed ineffective by a court.
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