Please, Have a Lawyer Do Your Will! - July/August Newsletter

Retirement Planning
for the
Canadian Investor

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Affiliated with Sentinel Life & Sentinel Financial Management Corp.

July/August - 2001

Commentary - Hans H. Mathisen

Feel Good Tax Relief - The July issue of LIFE LETTER deals with Planned Giving. We give money to charitable organizations of our choice and get some relief at tax time. But how about endowing your favorite charity with a large amount of Money? Using life insurance as the vehicle, you can donate a large amount of money to your charity and get the tax relief while you live. For instance, if you’re in your forties, a $2,000 annual donation would give your favorite charity a six-figure endowment down the road. And your donation saves you tax now! Call me and I’ll be pleased to show you how this works — you’re buying dollars for pennies a piece.

Please, Have a Lawyer Do Your Will! - You’ve seen the advertisements encouraging you to send for that will kit. LiFE LETTER for August suggests that you have a lawyer do your will. For all it costs, it’s money well spent. While Mathisen Financial, Inc. can’t act as your legal adviser, we have relationships with many of the best legal people in Saskatchewan and we will be pleased to suggest the name of a lawyer who can do your will. Please feel free to call me for a list of names.!

THE STOCK MARKETS - Not much has happened since you received your last issues of LIFE LETTER. There are, however, a few, points to keep in mind now when markets are volatile and not moving much:

1. Choose value when you invest and hold on to your investments;

2. Diversify your investments;

3. If you can access money at this time, now is the time to invest. The financial gurus seem to agree that the markets have hit bottom. Please call me if you want my thoughts on this.

HAPPY INVESTING!
Sincerely,
Hans Mathisen

LIFE LETTER

Feel Good Tax Relief
Carl and Cathy are well aware of the substantial tax advantages of making charitable contributions, as well as the good feeling they get by helping their favorite charity. In addition to their annual contributions, they would like to bequeath more substantial amounts to their chosen charity in their wills. Some of their more affluent friends do this. However, Carl and Cathy do not feel that they are able to.

They would like to endow their favorite charity at a relatively low cost and get some tax relief in the process. Life insurance may offer an answer to both these wishes.

The procedure is quite simple. They apply for insurance on their lives, or use existing policies, naming the charity as the new owner and beneficiary. They pay the premiums, and the charity gives them a tax-deductible receipt each year for the amount of the premiums paid.

Some reasons why life insurance is particularly well suited as a vehicle for making this special gift are:

The donor makes a substantial sum available at the date of his or her death through regular payments during their lifetime, which may be more suitable to the donor's current financial situation.
The gift is not subject to capital gains tax or income tax at death.
The gift cannot be contested by anyone. Large charitable bequests in a will are sometimes challenged by the donor's heirs. Life insurance is not open to such attacks.
There is no publicity of the donation unless desired. Since the bequest is not subject to probate and administration, there is no publicizing of the gift.
The amount of the gift remains intact, and does not face shrinkage due to legal fees, probate or administration costs.
Aside from helping the charity with the donation of a large capital gift, the donor benefits from tax-deductible premiums within the prescribed limits.

The whole concept of charitable giving through life insurance is based upon the understanding that the premium donations are expected to be in addition to the donor's current support.

Want to feel good and get a tax break?
Call Hans Mathisen today at (306)242-7042.
or email - hans@mathisen.ca

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LIFE LETTER

Should You Do Your Own Will?
Earl wants to control the distribution of his estate when he dies and feels that a Will is a good idea. He had heard the ads on radio and TV about do-it-yourself Wills and bought a National Legal Will Kit.

The booklet he received a few weeks later contained lots of useful information. There was a Glossary of Legal Terms that helped Earl understand the language of Wills and estates. It contained a Checklist for Your Estate Trustee which lists those things that will need to be done with his estate when he dies. He will have to remember to give a copy of this list to his Trustee. There were sections to record Your Personal History, Assets & Liabilities and People to be Notified.. . of [his] Passing.

The main part of the booklet described the Legal Requirements of a Will and provided instructions for Writing Your Will. The information was easy to read and seemed to be in a logical order. But, it was also very brief and left Earl to be, truly, the author of his own Will.

The fill-in-the-blanks Will in the middle of the booklet was only two pages long and did not have enough room to list everything that Earl wanted included in some sections. Other sections he thought were too long for his needs. He was disturbed by the paragraph that stated he should not try to revise [his] Will by crossing something out or by writing revisions on it. It went on to state that if he makes a mistake or needs to make revisions, he has to buy another Will kit. The kit he received expressly forbids him from making any copies.

The instructions failed to give Earl enough guidance on how to handle any business interests he might have, children from a previous relationship or how to provide for special needs beneficiaries. The kit was vague on how to word a beneficiary designation or how long a beneficiary needs to survive before receiving their share.

What bothered Earl most, though, was the Limitation of Liability at the front of the booklet. It stated, in part, that none of the author, publisher, or other marketing and distributing agents are able to warrant the validity of a Will made by you using this kit. He wants to be sure that his Will is prepared properly.

It is quite normal to want to save money on any purchase, legal fees included. However, a Will is a very important document that must be written properly. After all, it can't be corrected after you die. Most estates are not as simple as The National Will Kit may lead you to believe. A poorly written Will can cause more problems than no Will at all. A judge can even declare it invalid. And there is no legal recourse if you prepare it yourself.

Earl decided to use the booklet only as a guide to prepare for instructing his lawyer. After all, the kit even states he should seek appropriate legal, financial, or other expert advice or assistance as may be required.

Want help with your estate plans? Call today:
Mathisen Financial, Inc. (306)242-7042 or email Hans at hans@mathisen.ca.

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Mathisen Financial, Inc.
335 Redberry Road
Saskatoon, Saskatchewan S7K 4W5
Bus. (306) 242-7042 Fax. (306) 242-4314
Email: hans@mathisen.ca