Within the next twenty years, Canada’s baby boomers are in line to inherit a substantial fortune, which will represent the largest transfer of wealth from one generation to the next.
In an article written by Jennifer Power Scott and published in Canadian Living, Ms. Scott discusses the bittersweet bonanza that many heirs face and cautions the impulsive spender: "There are a lot of people in this world who might go out and blow the whole thing in a week, and that’s not appropriate. Unless you’re well-heeled to begin with, flushing the funds into trips to Las Vegas, sexy cars and plush home theatres probably isn’t the smart way to go."
In her article, Ms. Scott stresses the importance of carefully planning what to do with your inheritance, so that your inheritance can turn into a gift that lasts. Ms. Scott urges those who have received a windfall inheritance to:
- Take a breath. Put your inheritance somewhere safe that earns a good guaranteed rate of interest for a few months while you think things through
- Once you are ready to make a decision, speak to a certified financial planner
- Consider your option, such as satisfying outstanding debts, investing into an RESP for your children, or an RRSP or RRIF for yourself
Essentially Ms. Scott’s article forces her readers to consider their long-term goals as opposed to their short-term goals. "It pays to step back a little bit. Some people will immediately say, I’ve got this money, I don’t deserve it all, and maybe I should start helping out my kids right away. But they need to make sure that their financial future is properly secured before they do that."
Thank you for reading, and have a great day,
Rick Bickhram – Click here for more information on Rick Bickhram.
Who can forget the sad case of Terry Schiavo, the poor lady who suffered catastrophic brain damage in 1990 and was kept alive in a vegetative state on a feeding tube for 15 years? Readers will remember the anguish involved when her husband was forced to litigate against her parents in order to get the tube removed so Terry could die in peace. This became a powerful argument in favour of a "Living Will", which is basically a document in which individuals outline their "personal choices" regarding end-of-life treatments. Living Wills became a feel-good legal product, a perceived solution to the heart-rending situations like Terry’s.
Too bad the research shows that Living Wills may not live up to the hype. According to a recent study by two University of California Irvine researchers, Professors Peter Ditto and Elizabeth Loftus, Living Wills appear to have serious defects. One problem is that patient preferences change over time. For instance, one tends to be more inclined against end-of-life treatments immediately after a hospital stay, but this changes with time. Also, positive treatment results of family members make a patient more inclined to end-of-life treatment. Many people who make Living Wills change their preferences but forget about their Living Will, or misidentify those preferences in the Living Will.
Perhaps the most glaring weakness is that Living Wills do not appear to provide guidance to surrogates who have read them. According to the study, the accuracy of a surrogate who has read a Living Will in prediciting a loved one’s treatment preferences is no higher than that of a surrogate who has not read the Living Will. So a Living Will can be totally inconsistent with the patient’s most recent intentions.
Having a Living Will apparently makes both the patients and the surrogates feel better, so it’s not all bad news.
Have a safe day,