Time for the ‘talk’

James Pasternak
Sun

Successful family gatherings are those in which family members know what not to say. Family restraint, after all, leads to civility. But in matters of estate and financial planning, silence and delay may not be golden.

“You want [a conversation] when the parents are healthy and still able to articulate their own wishes and desires and are still comfortable in having this type of conversation with their own adult children,” says Lee Anne Davies, head of Royal Bank of Canada’s retirement strategies.

“You could leave it too late. And then it becomes impossible to have because someone has become ill.”

And even when health holds out, increasingly complex family arrangements, sibling rivalries, second marriages, car accidents, among a host of other curve balls, can make a mess out of a retirement and financial-planning strategy that seemed so simple just months before. There are countless strategies and options that parents and their children should discuss to reduce the risk of turning retirement into a nightmare and estate planning into a fiasco. But following are eight things every family should discuss sooner rather than later.

1. WHERE TO NEXT, MOM AND DAD?

Just the hint that a parent should consider a retirement facility can sour any family gathering. But absence of a game plan can result in the depletion of an estate and cause deep acrimony among siblings.

Sons and daughters of aging parents should consider the scenario of Stephen Smith, a financial advisor with Port Hope, Ont.-based Yorkminster Insurance Brokers. Mr. Smith and his wife purchased long-term care insurance in 1997, paying a premium of about $400 per month. In declining health, Mrs. Smith had to be institutionalized in 2006 due to Alzheimer’s disease. Mr. Smith is no longer paying premiums and is now receiving a $6,000 cheque each month from their insurance carrier for the $4,000-per-month cost of his wife’s institutional care.

Nevertheless, many parents balk at long-term care insurance, so sons and daughters could suggest a plan that includes the kids paying the premiums. And why not? This is a great hedge against depleting an estate and most plans have a “return of premium” provision if a claim is never made.

2. HOME CARE INSTEAD

If the discussion about long-term institutional care doesn’t go very well, there’s always the less expensive option of home care and home-care insurance. Some long-term care plans have a built-in home-care option and dad can stay parked in his La-Z-Boy. Home-care plans provide services ranging from registered nursing care to visits from an in-home personal companion. One need not be disabled or critically ill to be eligible for benefits.

But while home-care insurance is less expensive than long-term care insurance, a home-care policy holder who is transferred into a nursing facility would not be able to carry any unused benefit.

3. END OF EARNINGS

By choice or necessity, more and more Canadians are working into their late 60s and 70s. Disability insurance replaces about 60% of lost income due to injury or illness.

Disability can occur at any age, but the best time to consider buying this insurance is when someone is at their earning peak as a salaried employee.

A weakness in disability insurance is that one can have a life-threatening illness and not be disabled. That’s when critical-care insurance comes up. The bad news with critical-care insurance is that to qualify you have to be stricken with one or more illnesses, such as cancer, kidney failure, heart attack or stroke.

The good news is that you’ll receive a tax-free lump sum.

Toronto-based insurance broker and financial advisor Yirmi Cohen delivered a $300,000 cheque to a policy holder who had a benign brain tumour.

Not only did the client receive a windfall, he recovered, went on a vacation and went back to work.

4. WHO GETS THE COTTAGE?

No family wants the last memory of the cottage to be of a brother and sister hitting each other over the head with a fishing pole. Ms. Davies says that clearing the air early is essential: “What you might find is that some children are not interested in a certain property because they live somewhere else or it doesn’t fit their lifestyle.”

Bruce Gilboord, a Toronto-based Sun Life retirement income specialist, says the most efficient way to buy out family members — and settle any estate taxes — is through the purchase of a permanent life-insurance policy. And to make sure this solution runs smoothly, sons and daughters should consider sharing the cost of the premiums.

5. FAMILY REFEREE

There are few easier, cheaper and effective financial planning options than getting all family members to execute a power of attorney for property. Estates and wills lawyers Barry Fish and Les Kotzer urge families who have not executed a power of attorney to visit www.familyfight.comand read the horror stories. In the absence of a power of attorney, the public guardian might step in. Not a good move.

The 2004 Annual Report of the Office of the Provincial Auditor of Ontario found that there were numerous examples of poor investments and the draining of estates in that province’s Office of the Public Guardian and Trustee. Fish and Associates sell power-of-attorney kits for $50.

6. LOOKING OUT FOR NO. 1

Designating a power of attorney for personal care reduces the guesswork and arguments that arise when a parent is incapacitated. It assigns someone the power to express wishes, values, religious beliefs or preferences toward medical inter vention and long-term care.

7. YOUR WILL IS MY COMMAND

“Creating a will isn’t the most enjoyable thing you do with your time,” says RBC’s Ms. Davies. However, the consequences of the absence of a will are far more serious.

An out-of-date will can be worse. First and second marriages, step children and common-law arrangements can make for some complex inheritance situations. “Family structures change and as they change you want to make sure the right people are getting the right information so your intentions are well understood,” says Ms. Davies.

8. HANGING UP THE CAR KEYS

“Other than a death in the family or being evicted from your home, there are few life events more upsetting than hanging up your car keys for the last time,” says Bob Paterson, a retired sergeant with the Ontario Provincial Police. But a low-speed collision involving a senior driver can result in medical bills, litigation and loss of income.

When a parent just won’t let go of the keys, suggest a third-party diagnostician such as DriveAble.

© Copyright (c) The Vancouver Sun

Paint may not be dry, but show will go on and a whole lot more besides

Glen Schaefer
Province

It’s apt on several levels that the leadoff production at SFU Woodward’s new theatre is called The Show Must Go On.

The Fei and Milton Wong Experimental Theatre, named for the philanthropist and former Simon Fraser University chancellor, was still surrounded by construction fencing and peopled with hard hats when we met the theatre’s cultural director Michael Boucher at a nearby coffee shop.

He’s the guy tasked with filling the 430 theatre seats which, when we talked last week, hadn’t yet been installed. The paint will likely still be drying when the theatre opens today for a two-night architectural salon but it will open because, you know, the show must go on.

Cheap wordplay on the title aside, this dance work by French choreographer Jerome Bel wittily captures what Boucher and the theatre aim to do in the long term — provide a link between artists (SFU is moving its 1,800-student contemporary arts school from Burnaby Mountain to 125,000 square feet of classrooms at Woodward’s) and the community they live in.

Bel’s work, previously staged throughout Europe and North America, plays with audience notions of where performance ends and begins by blending a cast of 22 dancers, actors and high-profile laypeople. Those latter cast members include critic Max Wyman and Heart of the City’s Savannah Walling in this production. The performance opens Jan. 20

“It’s in a way inspired by the average person, their sensibility of what dance is about,” says Boucher. “It’s very personalized, they move to their own rhythm. It’s set to contemporary music and they move in ways where there’s a narrative that unfolds. There’s a street sensibility to it.”

The Show Must Go On is part of the Push Festival, founded by SFU alumnus Norman Armour. The new theatre’s six-month inaugural program is a homecoming of sorts — past SFU students on the program also include actor-director James Sanders, starring this March in the play SPINE, about reinventing the body through technology. That mixed-media play is a joint production with the Cultural Olympiad, and Boucher sees such external partnerships as a way of getting the most out of the theatre.

For most of February, the theatre will be home to writer-director-actor Robert Lepage’s international hit play The Blue Dragon, also part of the Cultural Olympiad.

The Wong will feature about 100 student-driven productions a year after the contemporary arts school moves in this September. In addition to the below-ground 430-seat theatre, the facility includes two 125-seat studio theatres, an orchestra studio, a 350-seat theatre equipped to screen films and host lectures and the ground-level Audain Gallery.

“We’ve been waiting for a building for 30 years,” says Martin Gotfrit, the school’s director, adding the school aims to be more visible after years on the mountain. “The building itself is very porous. To walk into the plaza from Hastings Street you have to walk through our lobby. We hope there’ll be a sense of people feeling welcome.”

Aside from the student productions, groups outside the university will be able to use the space.

“The inaugural program is a model of how we want to work with the community,” says Boucher. “A lot of it will be driven by cultural partnerships. The city needs more venues and this building addresses that need.

“When you have a venue with multiple studios in it, a state of the art theatre, it allows for smaller companies to step up. We’re looking at ways to make it workable and affordable to well-recognized smaller and mid-sized companies to come in and use this space, animate it.”

The benefit to the university is that students will be amid the outside professionals as well. “It will motivate this cycle of students wanting to go out and become professionals, and coming back in.”

The theatre opens its doors Thursday and Friday with a two-night onstage dialogue among members of Vancouver’s architecture and design communities. Tonight, architects Bing Thom and James K.M. Cheng will talk about the late Arthur Erickson’s architectural legacy. Friday night will feature a discussion of the art and architecture of the new Woodward’s housing, theatre and commercial complex itself, including the inauguration of a huge photographic installation by artist Stan Douglas and the re-lighting of the restored Woodward’s “W.”

The free multimedia exhibition Vancouverism: Architecture Builds the City will be staged in the Woodward’s atrium, showing until Feb. 27, and it will serve as the starting point for the two City Salon dialogues. [email protected]

© Copyright (c) The Province

Sun

Download Document

Principal danger is with emerging economies such as China, where equity and housing asset prices are soaring

Peter O’Neil
Sun

Canadian William White, who is believed to be the only senior economist within the world of central bankers who warned publicly about pending economic disaster before the 2008 global meltdown, said Tuesday that new “bubbles” in the financial system are emerging–and could burst.

White says he shares the concerns highlighted in this week’s edition of the influential British newsmagazine The Economist, which declared: “Bubble Warning: Why Assets are Overvalued.”

“I don’t think it’s alarmist or premature,” he told Canwest News Service.

White, a northern Ontario native who now lives in Switzerland, retired in 2008 from his role as chief economist at the Switzerland-based Bank for International Settlements, an international institution that advises the world’s central bankers.

For more than a decade, White and one of his senior researchers warned in BIS annual reports and at public events that the global economy was facing growing risk because of speculative bubbles, particularly in areas, such as the overpriced U.S. housing market.

While they weren’t alone in expressing concern about weak government regulations covering the lending practices of financial institutions, they took the provocative position that central bankers should play a far more active role by raising interest rates to contain speculative excesses–even during periods of low inflation.

Among those who dismissed White’s concerns were Alan (The Maestro) Greenspan — the once-revered chairman of the U.S. Federal Reserve who held the position from 1987 to 2006 — and current chair Ben Bernanke.

White says he agrees with The Economist’s argument that the principal danger of speculative bubbles forming and exploding are in emerging economies such as China, where equity and housing asset prices are soaring.

On Tuesday, the Chinese government took action to cool its overheating economy by raising the proportion of deposits held in reserve by banks.

White said equity prices in major industrialized countries, such the U.S., appear overpriced by historical standards, though that factor isn’t yet accompanied by two other factors associated with bubbles: a decline in savings rates and a rapid credit expansion.

“In a certain sense, all of that points in the direction of ‘don’t worry too much about the industrialized countries,’ ” he said.

© Copyright (c) The Vancouver Sun