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Creating a last will and testament really needs to involve more than a quick visit to a lawyer’s office.kate_sept2004/iStockPhoto / Getty Images

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Most Canadians eventually get around to estate planning and putting their financial affairs in order – even if that often occurs later in life than it should. But creating a last will and testament really needs to involve more than a quick visit to a lawyer’s office for a document signing.

For those nearing or entering retirement, it is critical not only to ensure your will is up to date, but also that you have chosen an executor(s) up to the challenge of carrying out your final wishes.

Given that your executor acts as your voice after you die, Canadians need to put a lot more thought into who they select for the role, says Darren Coleman, senior portfolio manager, private client group, with Coleman Wealth at Raymond James Ltd. In Toronto.

“People need to change this misconception or idea that it is an honour to choose someone as your executor,” he says. “It is a sign of tremendous trust and confidence in someone else, but at the same time, you’re also handing someone a remarkably difficult burden.”

That burden includes time-consuming administrative duties such as dealing with banks, insurance companies and government as well as dealing with the deceased’s family members, who may or may not be beneficiaries of the estate’s assets.

“They have to be able to handle the emotional effort of doing the executor’s role,” Mr. Coleman says. “They wind up having the beneficiaries – who could be family – be very unhappy with them in their decision making because the executor has to act for the deceased, not necessarily give every family member what they want.”

Although surveys show nearly one-half of Canadian adults don’t have a last will and testament, the good news is that percentage drops as we get older and estate planning becomes more important. Paul Brent reports.

Worried about retiring in a time of high inflation and rising interest rates? Don’t be

Roaring inflation and rising interest rates aren’t great news for retirees and near-retirees. But there is less to worry about in today’s economy than they might think.

The current threats are minor compared with the disaster that was the 1970s, when inflation regularly hit double digits and North American economies staggered under the blows of repeated energy crises.

Retirement rules developed to withstand shocks of that magnitude should weather today’s turbulence just fine, experts say.

“I was much more concerned a couple of years ago, when the pandemic hit, than I am now,” Wade Pfau, a professor of retirement income at the American College of Financial Services in Philadelphia, said in an interview with the Globe’s Ian McGugan.

Will this new pension option provide retirement security for more Canadians?

Larissa Dundon values her independence. After quitting her corporate gig five years ago to launch her own communications firm, she can’t imagine ever returning to a nine-to-five. Not even a coveted defined-benefit pension is enough of a lure.

“I have way more potential earning power, and I control where I want to go,” said the 37-year-old Vancouverite. “The payoff of having a pension isn’t worth it.” She saves for retirement in her registered retirement savings plan and tax-free savings account and considers herself fortunate that her husband has a pension.

But, she said, if someone offered her better retirement security that wouldn’t compromise her freedom as a small-business owner, she certainly wouldn’t say no. “If I had a standard amount coming in every month, I could supplement it and budget around that base.”

Experts say a recent change in federal pension rules suggests a way of giving Ms. Dundon and other Canadians like her access to reliable lifetime income in retirement, but they note that the new regulations will have to be greatly loosened before most people see any benefit.

The change came last year, when Ottawa passed budget legislation that allows people with defined-contribution pension plans and pooled registered pension plans to participate in what are known as variable payment life annuities (VPLAs). Though it will take some time for VPLAs to become available, the option will allow some retirees to exchange some or all of their retirement savings for monthly income. Kelsey Rolfe reports.

How should this 20-something couple plan retirement when they have more immediate goals?

Nathan and Elise are trying to “work through” their financial goals for the future – marriage, a place of their own, children. Even retirement. Nathan is 27, Elise 28.

First off, “We would like to buy our first home,” Elise writes in an e-mail. They’re looking for a house or townhouse in Ottawa, where they live and work in middle-management jobs. She earns $78,000 a year, he earns $75,000.

“We’re hoping for something in the $550,000 to $650,000 range,” Elise writes. “We’re pre-approved right now up to $720,000 but do not want to go that high.” Already, they’ve lost out on one offer, “but we know the process will take a while so we’re not too discouraged yet.”

While they have money in the bank, they want to keep a “significant portion” invested in the financial markets. As well, they have set aside some cash for their wedding. They intend to save aggressively over the next 12 to 18 months.

“How do we plan for retirement when there are so many life expenses that are more immediate?” Elise asks. Neither has a defined benefit pension plan, although Elise’s employer is making matching contributions to her registered retirement savings plan. They also ask about combining their finances.

Long term, their goal is to retire at age 65.

In the Globe’s latest Financial Facelift column, Steve Bridge, an advice-only financial planner at Money Coaches Canada in North Vancouver, looks at their situation.

In case you missed it

Should you move closer to your kids when you retire?

No longer needing to live near work, some retirees face a big decision: move closer to kids and grandkids or strike off in an entirely different direction.

John Hamblin, 75, sees the move he and his wife Peggy made last fall from Halifax to live near their daughter and granddaughters in Saint John, N.B. as “a benefit and a pleasure.”

If his daughter and her partner are too busy to pick up their 12 and 14-year-old kids after school, the Hamblins can do the job. They play cribbage and card games.

The kids are great, stresses Mr. Hamblin, who clearly doesn’t consider time spent with family as a chore. Even when the Hamblins are at their vacation home in Arizona, there are regular video calls with their daughter and granddaughters.

The Hamblins had lived in Halifax for 20 years. Their new home in the Saint John suburb of Rothsay is four hours away from Halifax by car, so if they want to visit old friends, they still can, Mr. Hamblin says.

The couple downsized from a large house to what his granddaughter calls a “hobbit house,” he says.

Statistics Canada shows close to 18,500 Canadians 65 and older moved between provinces in 2020-21. Add in those who move within their home province and that’s a lot of older adults on the move.

Some aren’t moving closer to their kids, as Kathy Kerr reports

How to ease into retirement

In 2019, Tim Brennan began thinking about what his post-retirement life would look like.

The 60-year-old Halifax entrepreneur had spent 21 years with the company he co-founded, Fit First Technologies, which produces software tools for human resources and recruiting. That December, he sat down with his partners and began talking about how he might wind down his involvement.

Then came the pandemic lockdowns weeks later, which put his plans into perspective: “I started walking in a city park every Wednesday afternoon during the first lockdown with a group of four or five guys I knew from a lawn-bowling club,” he recalls. “And I’d ask, ‘What do you do as a retired person?’

The biggest take-away from those walks, he says, was to “find out what’s important to you, and focus on that in retirement.”

For Mr. Brennan – whose identity, sense of purpose and social life was still substantially tied to work – that meant not retiring: At least not all the way.

He’s among many retirement-age Canadians making similar choices, says James Norris, a London, Ont.-based sales manager with human-resources firm Express Employment Professionals (EEP). Matthew Halliday reports

Ask Sixty Five

Question: Should all types of accounts be joint in case of the death of the primary account holder? I’m thinking telecom, utilities, natural gas, not just bank accounts. What happens if the person whose name is on the account passes away?

We asked Morgan Ulmer, a financial planner at fee-only financial planning firm Caring for Clients, based in Calgary, to answer this one:

My uncle was in charge of the family finances when he passed away in 2021. Bills and bank accounts were mostly in his name. My aunt had her own personal bank account but didn’t have visibility into his account or the utility bills. Struggling to prevent disruptions to her utilities was an extra burden in the immediate aftermath of losing her husband. Joint ownership of the bank account and utility bills would have provided some welcome breathing room.

This isn’t to say that all bank accounts and utilities should be joint between spouses, but considering whether it makes sense in your situation is worthwhile.

Bank accounts

Bank accounts in an individual name are normally frozen once the account holder dies. Being unable to access the account can leave surviving spouses in a sticky situation, even if they are the ultimate beneficiary.

In contrast, a joint account allows the surviving spouse to retain access to the account. They can also see the account’s transaction history for what bills were being paid. (In Quebec, even joint accounts are frozen upon the first death.)

Finally, joint bank accounts between spouses normally fall outside of the will, saving probate fees.

Utilities

If utilities are not joint, the unnamed spouse usually can’t make inquiries about or changes to the utility account. As well, utility companies often must open a new account for a surviving spouse, which is an administrative hassle and can attract fees.

It’s a good idea but …

It’s generally good practice for spouses to hold bank accounts and utilities in joint names for ease of administration both during life and afterwards. However, keep the following in mind:

  • If your name is on a bill, its payment status may affect your credit rating.
  • Joint bank accounts mean that both owners have full access to and decision-making authority on the account. The account can also be susceptible to the creditors of any account owner.
  • Joint bank account ownership may not be desirable in such cases as having a pre-nuptial agreement, if the proceeds were obtained before marriage, if they were from an inheritance, or if they are intended to be passed to a recipient other than your spouse.

What else you need to know

  • Although we have focused on the straightforward issues of bank accounts and utilities, consideration should also be given to your full suite of assets, including land, real estate, investment accounts and business holdings.
  • Adding adult children to accounts and assets “to make things easier” is often a decision made lightly. In reality, the practice deserves rigorous caution for reasons of tax consequences, estate objectives and family harmony.

The take-away

Ownership between spouses of bank accounts and utilities is only one small part of a bigger estate planning picture. A full estate review with an advisor about your bank accounts, investments, assets, wills and beneficiary designations can help clarify your estate objectives and prevent unintended consequences. Because what most of us want to leave behind is a legacy, not a mess.

Have a question about money or lifestyle topics for seniors, or want to suggest a story idea for the Sixty Five series? Please e-mail us at sixtyfive@globeandmail.com and we will find experts and answer your questions in future newsletters.