My mother recently passed away and I am grateful for the communication we had about her wishes and preferences for when the time came. She suffered from a chronic illness so the family had time to prepare themselves for her passing and I had the time to prepare to be the Executor of her estate.
In the spirit of continuous improvement (and to disprove the suggestion that you can’t teach an old dog new tricks…) I recently completed two Professional Development courses and received the professional designations associated with both.
In January 2015, I obtained the CEA designation and in December 2014 the EPC designation. I believe both of these designations focus on and sharpen the planning and communication requirements boomers will need to manage their future against the backdrop of the serious changing demographic, economic and social changes in our society.
I’m not talking about resolutions. I’m talking about getting fit! Stores are full of exercise equipment for the home and enrolment in fitness clubs increases. Then the hard work starts and the enthusiasm wanes.
Getting financially fit also occurs in January. Have you decided on the amount of your TFSA and RRSP contributions or any of the other plans you might contribute to like a RESP or RDSP? But then again you might wait until just before the deadline and then have to make “in-the-moment” decisions about the amount to contribute and how to invest it.
You may not know that there are organizations in the US that are attempting to encourage families to discuss important topics that are often left too late. While these organizations encourage discussions about health and end of life, the discussion of financial health and quality of life are equally important.
As the Grey Tsunami grows the Government of Ontario is increasing the reporting responsibilities of an Executor to ensure that assets reported when a will is probated are not understated. The draft details of the new reporting obligations are posted to the Government of Ontario website at http://bit.ly/1yxP8ee.
We can only guess how many more fiduciary responsibilities will be assigned to Executors, however the Government of Ontario’s need to balance their budget each year will likely bring new responsibilities that an Executor must manage.
Being financially literate empowers you to make daily decisions for things as simple as: should I buy that pair of shoes, wait until they go on sale or save the money? It also empowers you to set long-term financial goals and determine the means to achieve them.
It should also empower you to see the implications of deferring decisions in areas considered to be unpleasant.
AND… it should empower you to assess whether you have the information and skills to undertake fiduciary responsibilities for finances you currently have no control over.
As the Executor you are not only responsible to the beneficiaries, the Canada Revenue Agency (CRA) is the first and last creditor of an estate. CRA will hold you personally responsible for non-payment of any taxes if you have made distributions to the beneficiaries and there is not enough money left to pay all outstanding taxes.
There is no legislation in Canada to govern an Executor’s responsibilities over a person’s digital footprint and assets. Each service provider sets the terms and conditions in the “Terms of Service” that you must “Accept” in order to obtain the service. When was the last time you read that in it’s entirety, if ever?
Getting Your Financial Affairs in Order differs from individual to individual. For many of us, however, there are stark similarities depending on your age, stage of life and a number of other factors.
Interestingly, in our experience the size or dollar value of an estate is not what determines how complex or difficult it will be to execute. Nor does the varying number of beneficiaries add complexity and therefore time and costs. The single biggest factor that adds cost, time, frustration and family discord is if someone does not have their financial affairs in reasonable order.