Tag Archives: Power of attorney

Finance

Are You Thinking of Retiring? Don’t Miss These Crucial Steps

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Retirement is exciting to think about. After decades of work, the idea of having more control over your time… that’s something people look forward to, right? Many spend their working lives waiting until the day they retire – so if that’s you, you aren’t alone.

No matter how you imagine spending your retirement – traveling, spending more time with your family, or just enjoying a slower pace of life – it is a rewarding stage of life. But before you take the leap, there are a few important things worth putting in place.

A little bit of preparation now makes the years ahead much less stressful.

Create a Retirement Budget

You’ll have spent years earning a salary. One of the biggest changes you’ll go through after retiring is relying on savings and retirement income. Because of this, you must have a clear picture of your finances. That’s essential.

Even more so as Canadians now believe they require $1.7 million to retire. This is an increase from $1.54 million in 2025. So yes, having a budget is a must.

Begin with an estimate of what your monthly income will be. This might include pensions, investment income, retirement savings, or government benefits. Once you know what is coming in on a monthly basis, take a look at what typically goes out.

Many expenses will stay the same. Living expenses – groceries, mortgage or rent, utilities, and the like – don’t disappear when you stop working. At the same time, retirement also brings new spending. You might be one of the many retirees who travel more, take up new hobbies, or spend more time dining out.

Put everything on paper. This helps you understand whether your income comfortably supports your lifestyle. It’ll be easier to make adjustments before you retire if you notice a gap. 

Some people do find it helpful to speak with financial professionals who focus primarily on retirement planning. Firms – like Aleph Retirement Planners – work with individuals who want a long-term plan. Such forward planning helps manage income and expenses after leaving the workforce.

Plan for Long-Term Care

Another important part of retirement planning? Health. Most people hope to stay active and independent as they age, but it’s wise to consider what might happen if extra care is needed.

You might think it silly to consider this now. It isn’t. You need to be prepared, especially when there are numerous options. Long-term care takes different forms. Some people need occasional help at home, while others may eventually require assisted living. Depending on where you live, these services could be costly.

Think about these possibilities early. This gives you more options. You might explore long-term care insurance. Others might choose to set aside a portion of their savings specifically for future care needs.

Speak with family members, too. Discuss their preferences, if they have any. Sure, these conversations likely won’t be easy, but they do prevent confusion later on. Your wishes will be understood and followed.

Update Your Will and Power of Attorney

Retirement is a good time to review legal documents as well. There’s a chance your circumstances will have changed since you first created a will, particularly if you made it many years ago.

Maybe you’ve welcomed grandchildren. Perhaps you’ve purchased property. You might have experienced another major life change. Updating your will ensures your assets are distributed the way you intend.

Equally important is a power of attorney. This document allows someone you trust to handle financial or medical decisions on your behalf if you’re unable to do so. Again, you might not think this is necessary – but it might be. Without it, loved ones may need to go through complex legal processes just to step in and help you.

Review these documents periodically. Doing so keeps everything up to date and avoids unnecessary problems later.

To conclude, retirement is a life transition. A major one. It doesn’t need to overwhelm you, though. If you want to approach this next chapter with confidence, then you need to consider the above steps. 
This way, retirement becomes a time to enjoy everything you’ve worked hard for.

For the Silo, Jarrod Barker.

Culture

Families That Fight Over Inheritance

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The recently deceased don’t always ingratiate themselves with their survivors when it comes time to read the will.

“People want to control things from the grave, not just throw a bunch of money in a beneficiary’s lap,” says family wealth guru John Pankauski, author of the new book, “Pankauski’s Trustee’s Guide: 10 Steps to Family Trustee Excellence.”

It’s their money so that’s their right.Fighting Over Money

But family members aren’t always crazy about how the deceased divided up the money or, if the inheritance was put into a trust, the restrictions that are placed on how the money is spent.

And often ill feelings among family members can bubble to the surface when money is at stake.

“I deal with sibling rivalries, petty jealousies and childhood grudges played out by adults who are decades older, but no more mature,” says Pankauski, founder of the Pankauski Law Firm (www.pankauskilawfirm.com), which specializes in trust and estate law. “It makes me think that part of my job is to be a wealth psychologist.”

Often, an inheritance isn’t doled out immediately. Instead, it’s placed in a trust with a trustee to oversee it, making decisions on when and how to distribute the money based on the terms of the trust.

In many situations, that works out fine. But in seriously dysfunctional families, that can make a bad situation borderline intolerable.

Sense Of Entitlement

Pankauski says any number of factors can lead to family feuds or general disgruntlement over an inheritance. Here are just a few:

•  Sense of entitlement. Many beneficiaries have a misplaced sense of entitlement to an inheritance. They just expect that mom or dad will leave them money or property. In their minds, it’s what they have coming to them. “The truth is, you can dispose of your property any way you want,” Pankauski says. “There is no right to an inheritance and just about anyone can be disinherited.”

So if people want to leave their money in a trust for a family pet, or bequeath everything to a neighbor, a mistress or a charity, they have every right to do so, assuming they are competent and know what they are doing. “It’s their money,” Pankauski says. “They can do with it as they wish.” Other than dealing with a spouse, there are almost no restrictions.

•  The audacity of the trust. Family members often become frustrated and angry when they realize they inherited money, but it’s in a trust and there are strings attached.  “The beneficiaries view trusts as handcuffs on their money,” Pankauski says. “A trust takes all those family members’ personal feelings and emotions, all that baggage, and adds money to create a financial stew into which the beneficiaries are thrown.”

Often, because beneficiaries don’t like it that a trustee gets to make decisions on when and how they get a portion of their inheritance, family members will seek counsel and try to “bust the trust.”

•  An implied accusation of financial irresponsibility. At some point it may begin to dawn on beneficiaries that one reason the inheritance was placed in a trust is that the deceased didn’t view them as responsible with money. “That may seem insulting, but it doesn’t have to be,” Pankauski says. “Many would argue that most people are irresponsible with money, particularly a large sum of inherited money that appears out of the blue, much like winning a lottery.”
Sometimes at least a portion of the family animosity might be avoided by better planning when the will is being written and the trust created.
“When beneficiaries don’t get along,” Pankauski says, “it may make more sense to cut their financial ties by either creating multiple separate shares within the trust or creating separate trusts altogether.”

For the Silo, John Pankauski, LLP.