Legacy strategies for singles and the childless
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(Special) - Most people would like to leave something behind to show that their lives mattered. In many cases, this can be achieved through their children and grandchildren and their lives.
But what about the childless — couples who either cannot or do not have children, and singles? How can they leave a legacy?
Recent data from Statistics Canada shows that more Canadians than ever are living alone and the number of couples without children are growing faster than those with children.
The percentage of one-person households is the highest it has ever been in Canada's 150-year history. One-person households accounted for 28.2 per cent of all households in 2016, the highest since Confederation.
From 2011 to 2016, the number of couples living without children rose by 7.2 per cent compared with 2.3 per cent for couples with children.
"People are concerned about their legacy and in most cases are interested in planning their estate to be sure their assets are distributed the way they want," says Christine Van Cauwenberghe, vice-president for tax and estate planning with Investors Group.
It's important to ensure that you have all necessary end-of-life documents in order, such as an up-to-date will and powers of attorney for your property and health.
Some recent studies over the last few years have indicated that about half to two-thirds of Canadians don't have a will.
A will basically lays out who is going to get what, your directions for your funeral, your wants and desires as well as appointing an executor and/or guardian. It is very material to your estate.
Childless and singles tend to leave their money and assets to three main groups — charities, extended relatives and, believe it or not, pets.
Charitable giving is a very popular option.
There are literally thousands of registered charities in Canada. People donate to charities for a variety of reasons such as compassion for those in need, because they personally believe in a cause and want to help, to contribute to communities, because they are personally affected by the organization's cause, for religious obligation or beliefs, and to receive an income tax credit.
There are a number of ways of contributing to charities. If you are making a smaller donation of, say, less than $25,000 then it may be best just to pick a single charity and make the donation.
For larger donations many people often will use a community foundation or charitable fund which will take the money and then distribute it according to your wishes. You sit down with them and decide which charities you want to contribute to, how much and for how long.
Leaving money to extended relatives is another popular option but planners usually will advise against including too many generations as beneficiaries.
"Some people are quite close to their siblings, nieces, nephews or cousins but there are no 'rules' as to who you should include," says Van Cauwenberghe. "We don't recommend including too many generations of beneficiaries. It generally is easier to simply divide the assets between the older generation and let them divide the amounts between their heirs as part of the estate."
For some people pets are like their children and they may choose to leave money to friends, relatives or a charity or group which has a surviving pet care program specifically to take care of the animal or animals involved.
If you decide on an individual, have a frank conversation with them not only to gauge their interest but also to find out whether they have restrictions such as housing, allergies or mobility that might keep them from being as attentive as you want.
"The choice of beneficiary where people don't have spouses, children or grandchildren can vary significantly and really depends on the individual situation," Van Cauwenberghe says.
Talbot Boggs is a Toronto-based business communications professional who has worked with national news organizations, magazines and corporations in the finance, retail, manufacturing and other industrial sectors.
Copyright 2017 Talbot Boggs
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