Retirement Planning
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September/October - 2000
Commentary - Hans H. Mathisen
IMAGINE: Suddenly You ‘re An Executor! Many who read this communication will have had first-hand experience. For those who haven’t been an executor yet, please read this issue of LIFE LETTER carefully.
The October issue of LIFE LETTER
deals with a pertinent issue:
when is it prudent to dump an old life insurance policy?
Please read this carefully. Each case is different,
but it’s important to keep in mind that the products of the life insurance
industry have been vastly improved over the past two decades. Depending
upon your particular situation, it may or may not be to your advantage
todump that old insurance policy. By the way, how long
is it since you reviewed that old policy? I suggest that you
find that old policy you have under your mattress first, and then, please
call me. Only once we know what we’re analyzing can we make an intelligent
decision.
THE STOCK MARKETS Over the past many years, I’ve advocated diversifying investments world wide. During the first 9 months of 2000, the Toronto stock market has done better than the markets in all other industrialized nations.
So, the international markets are volatile.
But, please, hold on: There is no reason to run from the volatility
in the markets.
And this is why:
In all major industrialized countries of the world, we have non-inflationary growth, stable interest rates, falling unemployment, strong corporate profits, and governments are in the black. There is more trade and less war now than in the past 50 years. This is the time to be confident and not scared. My advice: Buy good value, ignore temporary events, and hang on tight.
HAPPY INVESTING!
Sincerely,
Hans Mathisen
Suddenly
You're an Executor!
After
his Sister’s death Andrew suddenly realized he was the Executor of her
will. He figured she must have asked him about it at some time, but
he’d forgotten about it. Now he had to find out what Executors are supposed
to do. Their responsibilities and duties scared him at first, because
he found he has to:
* Find
his Sister’s original Will and establish that it’s her "Last
Will and Testament";
* Determine the provisions of her Will;
* Learn about his Sister’s financial affairs;
* Locate all of her assets, both personal and business;
* Arrange for the continuation or sale of her business;
* Make sure that all assets are safe from loss or damage;
* Arrange to have the assets valued;
* Arrange for the sale of assets, if necessary;
* Pay all debts and claims;
* Make the most advantageous income tax elections to benefit
the estate and its beneficiaries;
* File the necessary Income Tax and GST returns;
* Obtain clearances from the tax departments;
* Establish any trusts dictated by the will; and
* Distribute the remaining assets to the beneficiaries.
At first this looked overwhelming, and he thought of resigning. But he discovered he can hire professionals to assist him with the legal, tax and investment aspects of the estate to make sure that it is handled properly. After all, he may be held personally responsible for his actions if he makes a mistake.
So if a relative or friend asks you to be her or his Executor, take it seriously, and discuss with them beforehand the various things that should be done to make your job as easy as possible, such as:
* Having the Will professionally prepared. Do-it-yourself Wills have disclaimers stating that the publisher of the Will kit is not responsible for the validity of the Will you prepare from it. And an improperly prepared Will can cause more grief, delays and expenses than not having a Will at all.
* Getting a copy of the Will, and knowing where to find the original. This lets you know its terms and conditions, and allows you to discuss any problem areas with the Testator (the person whose Will it is) while he or she is there to explain it. Advance knowledge minimizes surprises and costly delays.
* Getting a list of the details of the estate. Finding out about ALL its assets, and their locations; and all certificates, identification documents, bank accounts, safety deposit boxes, key locations, credit cards, loans, mortgages, leases; life, disability, group, property and casualty insurance; securities and investments; real estate holdings; business agreements; medical and professional advisors, etc.
As you discover the amount of work that you, as Executor, have to do you may want to suggest that the Testator name some additional Executors to spread the load and responsibilities.
Want
to review your estate plan before discussing it with your Executors?
Call Hans Mathisen today at (306)242-7042.
or email - hans@mathisen.ca
Seven
Steps to Switching Insurance!
Bryan’s
brother-in-law has started selling life insurance and is pressuring
him to switch his present policies to another insurer. It looks like
a good deal and he hasn’t heard from the agent who sold him his last
policy for a long time. What should he do? Here’s what the experts advise:
Step 1. Don’t rush into it. The agent asking you to switch may benefit more than you do. And his gain may be your loss. If you have a policy with cash values, there may be income taxes payable when you cash it in.
Step 2. Find out if your present insurer will offer a better deal. The new agent can’t, or won’t, tell you what your present insurer might counter offer. So contact your current agent to find out. Ask for a review and full explanation of your policies, including any exchange programs your present insurer may have. You may be better off keeping them where they are. It is almost always to your advantage to stay with your present insurer and avoid new incontestability periods, new suicide exclusion periods, and overlapping insurance periods.
Step 3. Find out if your present policies have benefits that are no longer offered, such as low maximum loan interest rates; higher settlement options; lower rates (especially if you’re a smoker); disability income benefits; guaranteed insurability; special dividend options; and/or higher dividend scales.
Step 4. Find out if your present policies have some favorable tax advantages. Disclosure statements don’t give the whole story; they just touch on the high points. They don’t deal with the tax or other benefits that may be in your present policies and that are no longer obtainable.
Step 5. Get a complete medical checkup. You want to be sure that you are insurable at standard rates. Don’t end up like so many others who dropped their present policies then found they were uninsurable or rated.
Step 6. Get a disclosure statement from the new agent for each policy he wants you to replace. A disclosure statement compares the benefits and premiums of each of your policies with its proposed replacement. It is required in all provinces and territories, and a copy must be given to you before a new application is completed.
Step 7. Don’t drop any policies until your replacements are in force and in your hands. Your new coverage should overlap your old coverage until you are sure its safe to drop your old policies. One insured canceled an existing policy the same day his new policy was issued. Before his new policy was delivered, he was diagnosed with cancer and the agent could not deliver it because of the significant change in his client’s health since he had applied for it. The client was left uninsured and uninsurable.
Thinking
of changing your present life insurance? Before you do, call:
Mathisen Financial, Inc. 242-7042 or email Hans at hans@mathisen.ca.
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Mutual confidence is the power that binds together all harmonious human relationships.
Mathisen
Financial, Inc.
335 Redberry Road
Saskatoon, Saskatchewan S7K 4W5
Bus. (306) 242-7042 Fax. (306) 242-4314
Email: hans@mathisen.ca