GERHARD SAWATZKY , MEd , CFP ®

We work during our careers to establish security for our loved ones and for ourselves . Without always realizing it , we are concerned about what the future will bring . We think about our families , our health , our friends , our bank accounts and even our death . As parents of young children , we thought about these concerns when we purchased life insurance . We began our estate planning when we financially protected our family with insurance . Since death is one of those sure things in life , we must plan for it . All Canadian adults should have a will , a power of attorney and a medical directive . In addition , these legal documents must be kept current . A review is appropriate every five years , or when major changes occur .

Family-Friendly Legacy Strategies

1 . At retirement , our family protection plan begins with the joint pension option in our defined benefit plan . Our spouse will continue to receive the pension after our passing . With careful saving and budgeting through our careers , there will likely be a ‘ nest egg ’ remaining after the second spouse dies . For many retirees the purpose of this fund is to pay funeral expenses , tax liabilities and to leave a gift for family .

2 . A joint last-to-die life insurance contract is a low-cost option for those 40 to 65 years of age who are in good health . This policy pays

the death benefit on the death of the second spouse . Such a lump sum payment may be designated to one or more family members ( tax-free and probate-free ) or simply to the estate to be dispersed as specified in our will . This provides a guarantee that there will be money to pay final costs on the death of the second spouse .

3 . As parents or grandparents , we can support young family members by taking advantage of government-registered plans . For children , the Registered Education Savings Plan ( RESP ) provides tax-free growth with government grants at the rate of 20 %.

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