When I Die: Financial Planning for Life and Death
Book Review by Blair Lowry | ARTA Pension & Financial Wellness Committee Member
Garry Duncan was a senior tax partner with BDO Dunwoody LLP and retired in 2005. Andrew Duncan is an estate and trust adviser with the Private Client Group of a Canadian bank.
When I Die is an essential tool to help you minimize the costs that may arise on your death and understand the financial impact of dying. It can be used as a guide to facilitate the organization of your estate while you are still alive and act as a source of information for your loved ones after you depart.
Chapter 1 deals with the will. Over fifty per cent of Canadians do not have one. This means they probably don’t have a Power of Attorney or Personal Directive either. Probate in Alberta is relatively cheap ($525 maximum for estates over $250,000). Owning property in joint tenancy can avoid probate. Annuities and life insurance are not subject to probate fees. Registered plans left to a spouse or partner will not cause an income tax liability. The authors also discuss trusts, which changed with the 2016 tax laws. Donations and charitable giving can be included in the will and can be tax efficient.
Chapter 2 covers the funeral. Since funerals are for the living, a prepaid funeral helps to take stress away from the survivors and will likely cost less. Funerals in Alberta average in the $15,000 to $17,000 range. Another thing to consider is body and organ donations.
Chapter 3 looks at estate liabilities, which may include the funeral, probate fees, credit cards, lines of credit, loans, mortgages, rents, deferred payments, property tax, and income tax. Also, your death will cause banks to freeze your accounts (unless they are joint). This can make it more difficult for the executors to handle the liabilities of the estate.
Chapter 4 deals with estate assets. The estate will have a net value of assets minus liabilities. Types of assets include cash, real estate, home, cottage, timeshare commitments, investments, life insurance, annuities, family business, and trusts.
Chapter 5 is a short discussion of contracts and agreements. It covers partnerships, shareholders, royalties, and class actions.
Chapter 6 is about tax returns. The CRA publication T4011 “Preparing Returns for Deceased Persons” can be very useful. If the death occurs before November 1, the deadline for filing is April 30 of the following year. If the death occurs after November 1, the return must be filed within six months.
Chapter 7 looks at life after death. The authors discuss testamentary trusts, capital property, registered plans, and post-mortem planning. It is not uncommon for surviving spouses or partners to review their own will to see if it contains what they want.
Chapter 8 is titled “Last but not Least.” You should plan to notify any organizations you belong to. There is nothing like having everything filed on your computer, but can anyone else access your files? Plan how to pass on usernames and passwords. You may want to make a list of entities that should be informed once you have departed.
When I Die: Financial Planning for Life and Death
Garry R. Duncan and Andrew G. Duncan
Published by Carswell. 8th Edition. ©2019
Available at the ATA Library, Barnett House, Edmonton
As of March 18, the most cost-effective purchase of this book can be found here:
Blair Lowry taught physical education and mathematics for thirty-five years, followed by five years of adult literacy, numeracy, and technology. Like many of us, he’s eager to travel again.