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March/April 2007

Commentary - Hans H. Mathisen

Suddenly, you're an executor - LIFE LETTER for March brings this subject up again. Previous issues on this topic have been very popular. So, please, read this bulletin also, and make certain that you act on its recommendations.

Budget 2007 highlights - The April issue of LIFE LETTER summarizes some of the most advantageous benefits to us, the Canadian taxpayers.The government giveth and the government taketh, but it appears this is a giving budget for most Canadians.

LIFE LETTER MATURE - Your retirement income may be at risk - For Seniors, as well as their families, because of the high cost of Long Term Care. Please note that insurance is available to help reduce this financial burden. A person may be able to obtain this kind of insurance coverage up to age 80.
Budget 2007 benefits for you - Seniors, this budget has many advantages. Please read and call me with any questions.

THE STOCK MARKETS - Over the past several years, we've become accustomed to double-digit annual gains of our mutual fund investments. At the close of business on March 30, 2007, the major stock indexes had yielded the following: Toronto's S&P TSX Composite Index is up 2.71%. The Dow Jones declined 0.87%, and the S&P and NASDAQ are up by 0.30% and 0.11%, respectively. In Europe, Germany's DAX is up 4.85%; France's CAC rose 1.67%; and the British FTSE 100 increased 1.44%. Hong Kong's Hang Seng declined 0.82%, and Japan's NIKKEI is up by 0.36%.

So, Canada hasn't been a bad place to be invested so far this year, compared to the alternatives. So, don't get excited about daily or short term market fluctuations. I personally monitor your investments every day the exchanges are open.

Hans Mathisen





Suddenly, you're an executor

Julie died suddenly and her brother, Andrew, found out he was named as the Executor of her will. She must have asked him about it at some time, but he had forgotten about it. He had to find out what Executors are supposed to do. The responsibilities and duties scared him at first because they included:

  • Find Julie's original Will and establish that it is her "Last Will and Testament";
  • Determine the provisions of her Will and notify the beneficiaries;
  • Leam about Julie's financial affairs;
  • Locate all of her assets, both personal and business;
  • Arrange for the continuation, sale or windup of her business;
  • Make sure that all assets are safe from loss or damage;
  • Arrange to have all Julie's assets fairly 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 named beneficiaries.

At first this looked overwhelming and he thought of resigning. However, Andrew discovered he can hire professionals to assist him with the legal, tax and investment aspects of the estate to make sure it is handled properly. After all, he may be held personally responsible for his actions if he makes a mistake.

If a relative or friend asks you to be their Executor, take it seriously. Discuss with them, beforehand, the various things that should be done to make your job as easy as possible, such as:

  • Have the Will professionally prepared. Lawyers are objective. They have the knowledge and experience to make sure the Will properly communicates the Testator's (the person whose Will it is) wishes, is valid and does not run afoul of any laws.
  • Get a copy of the Will and know where the original is kept. This lets you know its terms and conditions beforehand. You can also discuss any problem areas with the Testator while he or she is still there to explain it.
  • Get a list of the details of the estate. Find out about all assets and their locations; all certificates, identification documents, bank accounts, safety deposit boxes, key locations, credit cards, debts, leases; all life, disability, critical illness, liability, and property and casualty policies; securities and investments; real estate holdings; business agreements; medical and professional advisors, etc.

You may want to suggest that the Testator name additional Executors to help spread the work load and responsibilities.

For informational purposes only and not intended to provide legal advice.

Want help with your estate planning?

Call Hans Mathisen today at (306)242-7042.
or email -

Copyright 2007 Life Letter. All rights reserved

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Budget 2007 highlights

The budget tabled on Monday March 19, 2007 by Finance Minister Jim Flaherty has been called a "family friendly" one. Some of the proposed changes that can benefit you are:

New Child Tax Credit - Flaherty said, "We need to make it more affordable for people to have children and raise them." The new child tax credit ($2,000 for children under age 18) means about $310 in tax savings for up to 90% of families who qualify.

Improved Registered Education Savings Plan (RESP) Program - The budget proposes to eliminate the $4,000 annual contribution limit. There will still be a lifetime contribution limit, but it has been raised from $42,000 to $50,000. The proposal also increases the maximum annual Canada Education Savings Grant (CESG) by $100 to $500.

Increased Spousal and Dependent Amounts - In the past, the income earning spouse could claim their full personal exemption plus a lesser spousal amount for their partner without an income. The increased amount now means a tax savings of $209 (for 2007) for a two parent family with one spouse who earns little or no income. Single parents and those caring for a dependent also benefit from this increase.

Registered Disability Savings Plan (RDSP) - This is welcome news for parents of children with severe disabilities. Scheduled to begin in 2008 and based on the current RESP model, this plan will allow anyone eligible for the disability tax credit (DTC), their parents or legal representatives, to establish an RDSP for the benefit of the disabled person. Contributions can be made until the end of the year the beneficiary turns age 59. The lifetime maximum contribution is set at $200,000. Depending on family income and the amount contributed, RDSP deposits can attract Canada Disability Savings Grants (CDSG) at matching rates up to 300% to a maximum lifetime limit of $70,000. CDSGs are only available until the end of the year the beneficiary turns age 49.

For those with net family income up to $74,357, the CDSG is 300% of the first $500 deposited and 200% on the next $1,000. The CDSG is 100% on the first $1,000 for those with net family income over $74,357. The government intends to spend $25 million and $115 million over the next two years and $200 million per year thereafter to fund this plan.

Fuel-efficient Vehicle Rebate - This rebate program offers up to $2,000 for the purchase of a new fuel-efficient or alternative fuel vehicle. However, a "green levy" was also introduced that would be tacked onto fuel inefficient vehicles, such as SUVs and high powered sports cars.

Increased Child Care Support - The government committed $250 million annually to help create up to 25,000 new child care spaces. As well, the budget proposes to provide a 25% investment tax credit, to a maximum of $10,000 per new space, to businesses that create new child care spaces in the workplace.

For information purposes only and not intended to provide legal or tax advice.

Want help with your financial strategies?

Call Hans Mathisen today at (306)242-7042.
or email -

Copyright 2007 Life Letter. All rights reserved

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