For those heading south for the winter, there are a number of things that can be done to minimize financial headaches while you're supposed to be soaking up the sunshine as the rest of Canada is plunged into the deep freeze. Financial adviser Brett Strano of Edward Jones in Mississauga shared a few tips during an interview to keep your finances in order while away from home for any length of time.
Plan, plan, plan
"First and foremost you've got to have a plan. You've got to know where you're going and what your budget is. There are always going to be unexpected expenses coming up here and there, but if you've got a good road map you'll be okay. Remember, if you fail to plan then plan to fail."
"You want to make sure that you keep your contact information up to date, so if there's anybody that needs to get a hold of you they've got easy ways to do so. A lot of times e-mails are sufficient; you can just walk into a Starbucks and hop on to the WiFi or whatnot. More importantly is definitely having a contact number in the event of an emergency. If you do have a significant amount of assets, maybe you want to designate power of attorney over your affairs while you're away or just somebody that you trust that has trading authorization over your accounts. They can help you get money or do what you have to do with money."
Bigger bang for your buck
"One thing that people often miss is the value of keeping an account in U.S. dollars. You can actually hold them in a U.S. brokerage account and keep that money separate from your Canadian. That way you don't have to worry about buying U.S. currency at maybe unfavourable rates and you keep things separate.
"If people are in a position where they're withdrawing money from their registered retirement savings plan or registered retirement income fund because they are in retirement, which is typically what snowbirds are, and if they've held U.S. investments in their retirement plans and they don't need cash out of it, they can move those U.S. investments out of the account in kind. This means that they don't have to sell them, they would simply just move them to a U.S.-denominated account and then reap the rewards from there."
"I think it's also important to understand some of the residency rules that are often very closely associated with snowbirds – primarily, you don't want to spend 182 [or more] days in the U.S. within a 12-month period if you're a Canadian citizen. If you do so, that will complicate your tax situation a little bit, and therefore you want to make sure you're considering a tax professional that maybe specializes in cross-border issues.
"Then of course you want to make sure from an estate-planning point of view that you have all your affairs in order from that. So if you actually do own U.S. property, what are some of the considerations that maybe you didn't think about and that a professional in that field would be able to help you with in terms of ownership."
"The one thing is to plan out your bills accordingly while you're away and then simply have the cash available and set them up on the automatic payment where you would pay them as they become due. But most people nowadays are pretty savvy when it comes to using Internet banking. Paying bills is not a big deal over an iPad or a home computer or even your phone. Of course, some people will put their phone on holiday while they're away and save a little bit of money that way. The other thing is if you get paper bills, know when they're coming and have somebody pick them up and let you know what they are. Or even better, get companies to just shoot you off an e-mail to tell you that your bill is ready and how much it's for so you just hop online, you pay your bill and then you can keep sipping the daiquiris."
"When we talk about investment planning, we often talk about breaking things up into short term and longer term. With your longer-term investments, if you're gone for six months, chances are there's not going to be a lot to handle on that front. Six months in a 10- or 15-year horizon is really not that big of a time. On the shorter side, if you've got some money coming due because a guaranteed investment certificate is becoming due or something similar, if you've used a financial adviser, chances are they're going to be able to keep that on file and they should be able to send it right to your bank account. So it's almost a seamless transition."
"I think you always want to be planning ahead when it comes to that. Proper estate planning would dictate that you would want to update your wills every three to five years if need be. But I think more importantly for a lot of the snowbirds, obviously if something terrible happens then they've got everything together back home and at least having someone there who might know where those wills or their powers of attorney are kept again, the use of legal means to have representation while you're away is often a very smart thing to do. I think it's a good insurance policy to have a lawyer set that up for you."
This interview has been edited and condensed.