Alright, welcome to season four of Inside My Canoe Head. I came in podcasts about individual emergency preparedness, rocking an incredible life, and learning to do the things to make yourself more self-reliant in a chaotic world. Sit back, grab a beverage, and take charge of your life. Alright, welcome to the Ottawa studios of Inside My Canoe Head.
Listen, thanks for joining us this week. I think it's really important that we talk about your death. It is the number one subject that families and people in the preparedness community simply avoid. Because everything in the preparedness community is about how you intend to tackle the struggles and disruptions and changes in life that are thrown at you through exogenous shocks.
And therefore, it's all about how you're going to be ready to deal with them. Well, what about the one that we absolutely can be certain will happen? As the Stoics say, none of us get out of this thing called life alive. Momento Morei, remember, you may die today, so let that guide the decisions and the things you do.
So ladies and gentlemen and others, here we are today. On this wonderful sunny day in Canada's national capital, getting ready for the coming next weeks of wonderful visitors from around the country to celebrate Canada today. And so, I, you know, when's a good time to talk about death. I mean, you know, frankly, look around.
Hey, anybody, what are you doing tonight? Why don't we gather together, have some beers, and let's talk about dying. It's really not something that comes up a lot. It's not something that most of us actually feel comfortable about, but it is critically important in your preparedness planning to go through the processes and consider what happens when you or your spouse leave this world, because everybody will.
There's no way to avoid it. So what does that look like in your family right now today without making a single step forward to build a preparedness plan around the death of you or your spouse, think about it. And that's what we're going to talk about today. All the things you need to consider, let's get at it.
So first and foremost, we're going to try to keep this as uplifting as we can, but I mean, like I said, it's a subject we have to talk about. It basically sums itself as estate planning, right? So you are an individual who is alive. You are an individual who owns some physical things.
You may or may not have investment assets. You probably at least have 20 bucks in the bank. Where is that all going to go when you go away? What is going to happen?
Now, I'm going to preface it by today's comments by saying, I didn't bring on an expert because the problem with that is that each and every jurisdiction and this podcast is listening to around the world is going to be different, right? So no matter where you are in the world, these considerations are identical, but the law and the framework is how your country and sub-national governments will deal with the contingencies and the things that have to happen after your death is different. So the idea here today is not to give you the Canadian perfect rock solid example of exactly how estate planning is executed. It's about all the things that you need to consider and then you need to do like everything in preparedness, you need to go out and find out how do I do trust, how do I do beneficiary status, how do I do physical transfers of hard assets, how do I do that in the governance structure where I live and where my assets are located?
So basically there are two ways this is done. First is if you pass away without a will, it's called dying in test date, which means you have no legal document detailing your desires, wishes and wants for your physical and investment property. So think about as we talk about today, everything we're talking about are the physical goods that you own, could be your house, it could be a car, it could be your books, it could be your furniture, it could be your clothing, and then there's your monetary investment side. So the money sitting in your checking account, the life insurance policy or your investment portfolio.
In most jurisdictions, your will is gonna go through public court as well, but when you die without a will, you have to go to court to establish the proper ownership and distribution of the assets and what they're gonna go. And under normal procedures, what happens is, is that your surviving family members will then have to get together with the assistance of a hired legal gun or hired law firm or do it on their own at the court and try to go through all of your assets and determine where they go. In your jurisdiction, there very well may be a state taxes that are required on non-distributable assets or assets that don't have a destination predetermined. So you very well might find yourself if your family member dies without a will, where all of their assets are then pooled into one thing called the estate, which is just like a big group, it's just like putting everything in a big pot, right?
So the pot contains everything, physical, financial, that you own called your estate. That estate is then subject to government taxes and fees for its proper distribution. The other side about a will is, if you die in testate without a will, then you open up the distribution for everybody else to fight. Now, I've been through a couple of these cycles with various family members with wills or without wills and they never go as planned.
There is always somebody who feels wronged or they didn't get a fair share. And these individuals are people who are going to fight in the process. So when people fight during the will process, that then requires the court to adjudicate to determine to the best of its ability where those assets go. And that's not, you know, that may be considering your wishes if you actually had wishes, but if your wishes weren't expressed in writing and somebody else is trying to express them, then they have to be persuasive, they have to be influential.
Otherwise, the court will simply look at what is the normal process in law, basically what is the precedent of where these assets are distributed and normally the precedent in most jurisdictions is to the spouse and to the surviving children in equal forms. Now, that's not necessary always. There's always cases that can be made. So if you die without a will, not only will you be allowing your entire estate to be subject to government taxes and government administration, you'll then be leaving all of your family members to fight.
Now you never know. You might want to look down on that with a friggin laughter and watch them go at it. I mean, you may be a bit weird that way, but fine enough, that's okay. But the point is is that if you die in testate, you're basically leaving your family in the state to determine what happens to them.
You won't care, because you're not here, right? You're simply not around somebody else. That's the sort that crap out. But in preparedness, what we try to do is ensure that we take the necessary steps to learn skills, knowledge, and in weird cases actually acquire something, but basically knowledge and skills so that when a situation occurs, we are ready and capable to deal with it, or we have set the conditions so that other people in our family are able to do that.
So that if you make the decision that a will is a probably likely and intelligent thing for you to do, a lot of people then start looking for pricing. Now, I tried to price my will when I did it two years ago. And the first, most lawyers were about $899 in Canada to do my will. If you wanted a shadow will, like a copy will for your spouse that looked exactly the same, that was an additional $499 in here.
On Inside MyCanibet, I'm very much about preparedness being free, right? So, you know, a lot of people don't have that money right now, especially in times of high inflation and stress and chaos in the world, to throw that kind of money at a document you will never see and you will never use. So let's look at the preparedness idea of free and where do we get that from. So online I found a tool that cost me $65 for Canadian Wilket.
That was within my economic means to do. And then I used their online form to fill out all the things that it magically produced, a document. I then trained, saved it over into a Word document and I made, changed the names and made my wife's will for free, even though the program wanted more money from me to create a shadow will, but I just did it on my own by converting it to a Word document. The point is, is that it is available online for free.
And I'm not, you can find it through a Google search, absolutely free for the basic components that need to be in a will based upon your jurisdiction. Now, most wordings for wills are fairly common, but there are certain clauses in wording that are required based upon your jurisdiction and where you may be in this world. So it behooves you to go out and figure that out through online searches. Remember, everything you need to know in the world is available online and it's free of charge.
So basically you find the basic structure for the will in your online search for the jurisdiction where you live and now you've got the tool, you bring it up on your word processor, or you pull out a big piece of paper in your hand, write it a handwritten will, it's just as good as a computer generated will or just as good as when produced in a lawyer's office. They all have force and effect under law, unless of course you miss some certain paragraphs, which are the reason why you need to consult. Some very smart online community in how to do that and then we're gonna go and have a quick look at what you're gonna include. The first thing that you're gonna think about is in general wills break down into two different formats.
One is I'm going to leave everything to my spouse, full stop, my full property, and there's a legal wording to it that's somewhat different than each one, but it basically says when I die, my wife gets everything. Every single thing I have physical monetary, et cetera, transfers to my spouse. The second one is I want to divide my assets up to other than what would be the initial logical idea. So I'm married with children, say I wanna give my wife 75%, but I wanna give 25% of my assets to my children.
I then have to write that out how that's going to be broken down, like which account, which this, which that, right? So if you think about it that way, that's basically generally two formats of a will. Your spouse gets everything, which is what I did. Let's be frank, I mean, I'm not giving anything to my children.
They'll get it when my spouse goes, but if I'm the first one to bite the bullet, then you know what, my spouse gets everything and she can figure the rest of the world out, and it'll be completely up to her, and her will is exactly the same. So whichever one of us go first, the other one gets everything. That's a bit scary depending on how much money's involved. But let's talk about your house.
So is your house registered in the deed in both you and your spouse's name? That is a legal requirement in some jurisdictions for simple transfer of assets, right? So you can go through, like I said, in a lot of places you still have to go through probate court even with a will, but if you have a major asset like a house and it is both in you and your spouse's name, and don't worry about your spouse taking it into divorce, in laws in Western country where I live in Canada, she's getting half the house value whether she's on the deed or not, because it's a matrimonial home. So if you want ease of asset of transfer of hard assets like a house, especially a house, it's great to put you and your spouse on the deed.
So what you're doing in court is you're removing a name from the deed, you're not adding a name to the deed. So you're basically going through the process of removing your spouse from the deed and other hard assets like a car, anything else like that. Because you may be subject to some type of transfer fee or some type of legal fee arrangement for adding your spouse to the deed and transferring the house to your spouse's name. Now the difference and important thing about a house is the vast majority of us have a mortgage.
And unless it's a joint mortgage between you and your spouse, and the mortgage is in the, say the mortgage is in my name, I die and my spouse, I've said my spouse can have the home, but when the mortgage company finds out I'm not here anymore, they're gonna want that mortgage paid in full. Now that's normal, they're gonna want it paid in full unless it's a joint mortgage and then it'll carry on until renewal. But if it's not a joint mortgage and it's solely in my name, then they're gonna want payment in full. Now normally what happens in that case is that your spouse goes out, gets the mortgage, one mortgage pays out the other, there's always legal fees with things like that, et cetera.
But if you're in a situation where the primary bread winner in the family dies and the other spouse has a far lower income, you're now in a situation where the surviving spouse does not have the funds sufficient to get a mortgage in the house. And the house, when the mortgage company from the deceased spouse's income says, hey listen, I want it closed out now because the mortgage owner is dead, you're gonna have to sell the house, right? Or you're gonna have to find a rich family member to give you the money to pay out that mortgage, et cetera. So when you have a joint mortgage and one of the individuals passes away, the joint mortgage under normal jurisdictions.
Now you have to verify this, but under normal jurisdictions, it will carry through through its terms. So if you were in year two of a five year joint mortgage, then you can carry on with the existing mortgage as long as you can make the payments until as much time as it matures. When it's time to re-sign the mortgage, you'll have to have the income necessary to support that. But it gives you a bit of runway, shall we say, if you choose to do that and have both you and your spouse on the mortgage as well.
So again, you start to see a theme here of having your better half, better half or everyone to describe them in a position where they're able to remove you from formal assets, et cetera. The same thing with a car with a loan. It's an asset with a lien against it. So you can transfer the asset, but the lien holder, like for example, I have a car with a loan on it.
So when I die, the car gets transferred to my wife, but the lien holder says, hey, Jeff is no longer here anymore. I need the loan paid in full today. And so my wife has to go out and either pay it with life insurance money, pay it some other way or sell the car to pay off the loan and walk away with the difference in cash, or she has to have the income necessary to take over the loan and have it transferred into her name. So it's very, very important to understand that those loans are liens against the property.
So it's a lien against the house and it's a lien against the car, which means when the person dies, the debt doesn't go away. It's tied to the asset. So if you don't pay that loan or replace it, then they'll seize the asset. So the bank or your mortgage company will seize the house.
Some TV show will show up in your driveway, hook up your car and drive away. So the debt doesn't magically go away and you get to keep the asset free of charge when there is a lien against the asset. So then we all have things called physical assets, right? We have property, we have furniture, we have all kinds of equipment, whatever it may be, what happens to your physical property?
Who gets to claim ownership? And again, this may be simple in your family, but none I've come across is simple. Everyone I've come across or been in the middle of has been an ugly, ugly fight. So make sure that you know who you want your stuff to go to.
Again, if you choose the option of all of my assets to my spouse, then your spouse now immediately gets ownership of all your stuff, right? So if I pass away, everything goes to my wife, she now owns all my company equipment. She'll never use it, but it's now her property to determine what she's going to do with it. So physical assets are a lot easier, but again, if not, for example, if you had some valuable furniture or you had some old silverware and stuff like that, traditions from a couple of generations ago that were sitting and all three kids wanted mom silverware set that's worth $10,000, now you're in a court arguing who would best be served to get that asset.
And you can start to see how legal fees rise up or to the point where it just spouses at the end of this thing, they just don't talk to each other anymore, and families get ripped apart. Another really important thing is you don't think about is your online life. Think about your online life and what happens to it. What is your, I don't care what your intent, what your online life is.
I mean, you can put in your will, all my online has to be deleted. The court is not going to make sure that somebody, your executive of your will is responsible to execute that, and there's nobody double checking to see if that executive does it. It's more of your family or whomever your beneficiary is will want access to your online world, right? Not only to tell all your online world that you're not here anymore, but all the pictures that are on your Facebook profile, all the pictures that are on your Instagram, your TikTok, all of this stuff is evidence of your life and part of your existence here on Earth.
And what do you want to happen to that? And it can be simple as here are my passwords, do as you see fit. That is a great strategy to go ahead and do. And at the very end of this, I'm going to talk about, layout my strategy and explain why, but that's what I do.
I have a book with every password for every online thing that I have, and it's just here you go. But make sure you consider your online presence very, very much for the modern technological age. The next thing that I'm going to talk about is investments, right? So if you have investments in Canada, registered investments or non-registered investments, that means RSPs, TFSA, or just an investment portfolio where you pay tax on your capital gains, et cetera, there's a beneficiary clause in all of them, right?
When you establish investment accounts, you put a beneficiary there. So this is an automatic transfer outside of probate court, where your assets go. So my investment portfolio is separate and distinct from my estate. It does not get paid to my estate.
It gets handled outside of my estate. The beneficiary is my spouse or it could be my children. And in my beneficiary statements at my investment, it's my wife and then my children. So if my wife and I happen to go together, my children don't have to fight in court, it's already in there.
So all of my investments, however little they may be, if I have $2,000 in a GIC, there's a beneficiary tied to that. So this person becomes the beneficiary of it. Now, you have to look at your laws of where you are. So how do you transfer a registered retirement savings plan in Canada and RRSP and what are the tax implications?
How do you transfer your TFSA, et cetera? There's something called trust accounts. Now trust accounts are where you put your investments inside a trust. It's basically a legal entity that allows it to be transferred to the next generation without subject to a state and death taxes type of thing.
There's a way to do it. There's obviously management fees along with trust, et cetera. So you have to balance that with the fees that you may trust. But if you have a $1.4 million nest egg that you put together to pay yourself a retirement pension, that's not a lot of money when you don't have a pension, but that is your pension plan and your investment.
And then you pass away before you get a chance to draw on it. $1.4 million subject to government taxes, I mean, your family could lose 20, 30, 40% of your lifetime investment that you've put together to government taxes because you failed to do proper planning. So look into basically your investment that you have. So if you have a TFSA in Canada or you have an investment portfolio in the United States or anywhere else, look at the laws of what's going to happen to that when you die.
I transfer the beneficiary to my wife. Does she get it automatically free of charge? Or is there a fee? Does she have to declare something on her income?
These are laws and rules that are going to be different in each jurisdiction and it's going to be up to you to figure them out, up to you to understand. And then if you need to do something like a trust to mitigate that, it's up to you to figure that out. There's nobody that can come on here and tell you exactly what to do. That's the point.
You go out and figure out your jurisdiction you're in and the laws that are applicable to you. And then you've got something wonderful like life insurance, so I have a number of life insurance policies that are worth a pretty penny. They are beneficiaries designated in them. They are tax free in Canada where I live.
Life insurance is not taxable. And it's paid directly to my beneficiary upon proper notification of death, which is a legally issued death certificate. So that's basically down all of my policies, et cetera. Go to them, the individuals get the cash check.
They don't have to clear out his income and they're free to do it as they see fit. Now you can leave a life insurance policy instead of mortgage insurance, which if I give you any advice in the world, run the freak away from mortgage insurance as fast as you can and get term life insurance. Term life insurance is a simple product when you die as long as the payments have been made, your beneficiary gets X sum of money. That's a term life insurance.
Whole life insurance is another disgusting animal that's out there, run away. Keep life simple, buy a term life insurance policy, equal to your mortgage, your mortgage gets paid off. It's far more beneficial and far less expensive and far less rules cutting than your mortgage because you know what, if you pass away and you've got mortgage insurance, all you can do is pay off your mortgage. Say you had a quarter million dollar, half a million dollar mortgage and you got mortgage insurance.
But what if you had a half a million dollar term insurance that's cheaper and your spouse doesn't want to pay off the mortgage? Your spouse wants to sell ditch the house, take the equity and go start a new life somewhere else. They're not interested in paying off the mortgage as mortgage insurance, not at all, right? So you might want to have that conversation.
It's always better to get term life insurance, which is just a cash payout and then you allow the surviving family members to decide what the heck they want to do with the money because you're not there. And really it doesn't matter to you what they do with it. So life insurance is one of those proper things that is always overlooked. It's one of the things that you, everybody needs to have, I don't care how broke you are.
It's winding and complaining if you can't afford it. No, you don't have a million dollar policy. But if you buy, if you live on minimum wage, you should have a $25,000 life insurance policy because what does that do? That gives your family member time to breathe, time to figure out what they're gonna do next, to pay the rent, to buy food, to keep the kids in programs for a very short period of time, you know, six months maybe and why they figure out what the heck they're gonna do next or to figure out, you know, what job they're gonna move to to to replace your income.
I don't know how it's done. You just need to do it, right? If you make it a priority, you'll make it happen. If it's not a priority for you, you'll tell yourself there's all kinds of excuses why you can't.
So I'm gonna end this podcast today to tell you exactly how I've done it. So I have an envelope in my filing cabinet here, all of my kids and my wife know about it. It's simply entitled, When I'm Gone. And it's written on the outside.
And on the inside, I went down one night. It's a pretty gut wrenching thing to do, but I wrote a little letter to everybody. And it's not, oh my God, you know, I love you, you're my wonderful kids. They know that.
It's okay, I'm gone, this sucks. But here's what you need to do. And I laid out the thing. These are the first three things that you need to do right away to make, you know, to make sure that you don't get screwed over.
You need to make sure that you contact the people who pay me money. So like, for example, I get a pension, right? My wife gets half a pension when I die. You don't want pension over payments and have to worry about repaying them.
So you have to call. So there are three agencies and where I get my money from, where my income sources come in from, because some of those income sources stop when I die. And then my life insurance. And inside there is, you gotta call this person at this number.
Here is the exact information they will be looking for. And here's a copy of the life insurance policies, blah, blah, blah. So everything is laid out. So my surviving family members simply have to open up the envelope, pull out the first piece of paper that has a life insurance policy staple to it.
And it tells them, here I am. Here are the three people you have to call right away. And then there's a line or two that talks about, now you can take a breather. That's all you need to do right now.
If you don't tell the mortgage people for a month or two, just breathe, everything will be OK. And then it lists all of my financial assets. Absolutely everything that I have a dollar invested in is there with the account numbers and the online passwords for my financials, right? And also inside this envelope obviously is my will.
And then instructions about what do you do with the will? How do you get a death certificate in the province of Ontario in the city of Ottawa? So all of these instructions are there for my family so they can execute the initial important tasks when I die that will make sure that they have the best possible financial and physical security available. Invest in your family.
They're worth it. You don't want them running around trying to figure out where the hell your bank accounts are, et cetera. I have a book on my desk that has all of my passwords in the world on there. Everybody knows where it is.
So they open it up. It's got my Apple ID, all of my IDs for all of my social media. It has basically my entire online presence, my website, user ID, et cetera. Here are all the ones I subscribe to, like my sports network that builds me every month, my Zoom account, all this other stuff, right?
I own a business. So all the corporate records are there. So everything my family will need to navigate the disruption of me disappearing from this world is written down in a logical step-by-step process with all the contact information, all the contact numbers and all the details they will need. I did this for them.
It was free of charge and it's the best darn thing you can do because they're going to be twisted sideways mentally and trying to navigate this. And you've just made it simple and easy for them to follow. Horrible thing to have to call up Veterans Affairs and tell them that the veteran is no longer here and the pension needs to be reduced by 50% to a survivor's pension. But you want to do that when I go.
You don't want to do that three months later and then have to owe back three months worth of pension. And when you can tell the person on the other line, I have the desk certificate. Here is the insurance policy number. I am the beneficiary or I am the executor of the will.
Here we go. So the summary of the whole story of today's podcast is Momento Mori, my friends, you are going to die. You are not going to get out of this world alive. So take some time.
It's free of charge. Make the necessary preparation. So when you do exit this physical world, you do so with all of the necessary preparations made so that your family can pick up the pieces and carry on in the direction that they're going to do. And that whatever wealth you've accumulated in this life is best protected from government taxes and best protected from court ideas.
Don't let the court figure out what happens to all of your stuff and your money. Take the time to do it yourself. So thanks for joining us this week on Inside My Canoe Head. We get back to Monday, Tuesday episodes on this podcast.
We're going to stay with the idea of globalism. We're going to talk about inflation. We're going to talk about big picture issues and preparedness. And then we're going to keep these Thursday Friday ones on specific exacting personal issues like death, like things like that, that are very important and often overlooked and are very, very helpful.
So thank you very much for the ongoing comments and suggestions that keep coming in. I appreciate all of them. Drop by and see us over at insidemycanoehead.ca. If you appreciate what I do and you like what I do, go over to Buy Me A Coffee.
The link is on that website and spend $5 and Buy Me A Coffee. I appreciate it. So take time, take care of yourself, have yourself a great week and we'll talk to you coming up in a couple of days. Take care.
Mm-hmm.