Estate Planning for Blended Families
Avoid Disinheriting Your Children
In today’s family it is not unusual for spouses to enter the marriage with children from previous relationships. Parents work hard at getting these children to functionally blend together to create a happy family environment. Often overlooked is what happens on the death of one of the parents. In most cases special consideration for estate planning is needed to avoid relationship loss and possibly legal action.
Typically spouses leave everything to each other and when the surviving spouse dies, the remainder is divided amongst the children. The problem? Even with the best of intentions, there is no guarantee that the surviving spouse will not remarry and inadvertently disinherit the deceased’s children.
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The Stability of the Life Insurance Industry in Canada
Over the past decade, the number of life insurance companies operating in Canada has decreased dramatically because of mergers and acquisitions. For example, people who had policies issued by Maritime Life, Commercial Union, North American Life, or Aetna Life now find themselves insured by Manulife Financial. How concerned should we be about the state of the life insurance industry in Canada as a result?
As it turns out, insurance is one of the most closely-regulated industries in Canada. Unlike the United States, in Canada there is a government organization that supervises all federally-incorporated and foreign insurers to ensure that these companies operate in a prudent manner. This organization is the Office of the Superintendent of Financial Institutions (OSFI). Companies that are provincially chartered are overseen by the province in which they do business. Don’t worry, though: all of the major life insurance companies are federally regulated by OSFI. Read more
Protect Your Children’s Standard of Living
Five Financial Products You Should Own
By Brenda Spiering, Editor, BrighterLife.ca
You don’t need to be born with a silver spoon in your mouth to build wealth. With the right products, you can grow and protect a healthy nest egg.
Here are five key financial products that should be part of your plan:
1. Registered Retirement Savings Plan (RRSP)
As soon as you begin your working life, you should have a registered retirement savings plan (RRSP). It’s one of the most tax effective ways to save for retirement. You’re allowed to contribute up to 18% of your earned income from the previous year to a maximum of $22,450 for 2011. (If you’re a member of a group pension plan, your contribution room is reduced by your “pension adjustment,” an amount you’ll find listed on your T4.)
Contributions are tax deductible, meaning you can net a tidy tax refund while building your savings. Plus, you can turbo charge your RRSP savings by putting that tax refund back into your RRSP as soon as you receive your cheque.
