Now that they have retired, Rodney and Rose want to update their financial plan.
Their main goals are to:
- Provide an inheritance for their two adult children
- Leave their three grandchildren some money for university or college
- Leave some money to their local hospital
- Make it as easy as they can for the children to settle their estate and pay any final costs.
Rodney and Rose's plan: Rodney and Rose talk to an adviser and decide to do three things:
- First, they update their wills. They set up a small trust fund for each of their grandchildren out of their cash savings. They name each other as the main beneficiary of their retirement savings plans. They name the hospital as a second beneficiary. That means that after both Rodney and Rose are gone, the hospital will receive the rest of their savings.
- They make their two adult children the beneficiaries of their $200,000 joint life insurance policy. The children will share the money, and won’t have to pay any probate fees or taxes on it.
- Rodney and Rose preplan and prepay their funerals. This way there will be fewer extra bills when they die. Also, their children will know their exact wishes, right down to Rodney and Rose’s favourite music for the funeral.
Rodney and Rose know they may have to update their wills from time to time. However, for now, they can rest easy. They have a financial plan that takes care of all of their top goals.
Content in this section is provided in partnership with Investor Education Fund, a non-profit organization founded and supported by the Ontario Securities Commission that provides unbiased and independent financial tools to help Canadians make better money decisions. To find out more, go to: GetSmarterAboutMoney.ca