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Should You Renew or Cash in Your GIC?

bigstock-Green-Wheel-Barrel-Full-Of-Dol-5607013A GIC is a funding vehicle used to earn money on the principle invested with a guaranteed rate of return for a set period of time and many people appreciate the safety of investing their money in Guaranteed Investment Certificates (GIC). Now, if you invested your money into a GIC say five years ago, you may have been earning a 7% rate of return on your principle.  This looks wonderful compared to the current guaranteed interest rate of 1.5% to 2.0 % or so. Is now a good time to renew or cash in your GIC?

Although the principal amount invested is guaranteed, the interest earned on a GIC is taxable as income.  If the investor has a marginal tax rate of 22% then the real return on the GIC is lower than the original 7% guaranteed over the term of the GIC.  The realized rate of return is just under 5.5%.  And in the current GIC market the guaranteed rate of return is much lower than 7% and is hovering around 1.5 to 2.0%

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3 Major Changes to the Ontario Funeral, Burial and Cremation Services Act

bigstock-Mourning-woman-on-funeral-with-47269159On July 1 2012 the new Ontario Funeral, Burial and Cremation Services Act comes into effect.  There are 3 major changes in the legislation concerning prepaid funeral contracts.  They are:

  1. The Funeral home must guarantee all goods and services listed on the prepaid contract.
  2. Funeral Homes may not accept prepayment for cemetery related services.
  3. The administration fee has increased.

Each of these legislative changes is discussed in turn.

1. Prepaid funeral contracts

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Funeral Pre-Planning Myth – My Family Knows What I Want

bigstock-Religion-death-and-dolor--f-24592586In my last blog post on the series Dispelling Myths About Funeral Preplanning, I discussed two more myths about funeral preplanning; that being the costs involved and misconceptions about cremation. In this blog post, we’ll address this myth: my family knows what I want………………..

I have heard this many times and more often than not, the family does not know what you want – either because you have not told them or the funeral directions are recorded in the will.

Sometimes funeral directions are included in the will. Unfortunately the will is generally read after the funeral. One family I know of had cremated their father as none of them recalled him talking about his preference. When they read the will, the funeral directions indicated that he wanted to be buried. What a shock for this family! At another funeral, two brothers were fist fighting at the cemetery – both adamant that dad wanted to be buried in the ground and the other brother equally adamant that dad had told him he wanted to be entombed in a crypt. This is not a good day for anyone.

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Landing Papers – Who Knew They Are so Important?!

bigstock-Passport-Stamps-4027299As part of our After Care program, I was recently assisting a man with some of the necessary paperwork involved in closing part of his mom’s estate.  One of the questions I asked him was if his mom had a valid Canadian Passport?  He replied that she did not; rather she had a valid British Passport.  In the course of our conversation I asked him if I could look at the passport.  One great part of my job is that I get to look at old marriage certificates, immigration papers, passports, or birth certificates.  I love the stamps and seals or markings on these documents.  Often the writing is very precise as well. This I find very interesting.

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4 Service Canada Issues to Consider When Doing Funeral Preplanning

bigstock-Wealthy-Nest-Egg-29498726Last week we discussed 5 items to put on your funeral pre planning list. In keeping with this theme, I would like to share with you 4 Service Canada considerations with respect to budgeting the to-dos on your funeral pre-planning list.

I would recommend that you contact the Canadian Pension Plan and see how the changes introduced from 2011 to 2016 may give your more options as you make the transition from work to retirement.  The Canadian Pension Plan (CPP) is administered through Service Canada and you may contact Service Canada or call them at 1-800-277-9914 toll free in Canada and the United States.  If you require assistance for hearing or speech impairments, then call the TTY number at 1-800-255-4786.  If you are calling outside of Canada or the United States, then please call 613-990-2244  and Service Canada will accept collect calls.  Alternatively you could make an appointment and visit a Service Canada Centre.

Here are the 4 things I would encourage you to explore:

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3 Canada Pension Benefits You and Your Executor Should Know About

Birth CertificateAs far as the Canadian Government is concerned, there are two important dates in our lives:  our birth date and our date of death.  Although we may not want to think about our own mortality – eventually this is going to happen so ensuring your personal papers are in order and readily accessible is highly recommended. Here are 3 Canada Pension Benefits that your executor should know about.

1. Canada Pension Plan Death Benefit

One of the things your executor needs to do is to apply to Service Canada for the Canadian Pension Plan Death benefit.  The current maximum is $2,500.00 and is payable to the estate of the deceased contributor.  To apply for this benefit, your executor must provide the following:

  • The deceased’s SIN number
  • Date and place of birth
  • Date of death, and
  • A copy of the funeral director’s death certificate.