PC Financial 2.25% (June-August 2016) offer (to some) | Page 2 | Simplii Financial | Discussion forum

dentgal said Schroedinger, I definitely agree that if you have $5000 to invest, you are simply not talking about enough interest to be bothered constantly moving your money.
For every $100,000 we have to invest, an additional 1% interest=$1000 per year. I guess we all have our "magic" number of how much additional interest do we need to get to make it "worth our while" to continue with the dance!

Savings accounts aren't investments, they're capital preservation tools, and poor ones at that. The only advantages of savings accounts are safety and liquidity, which is why I use them for emergency money that I may need to access when the market is down. Other than that, they're a sure-fire way to guarantee your money loses spending power over time due to the vast discrepancy between inflation and so-called "high interest" rates.

There's no logical reason why anyone would keep $100,000 in a savings account and need to move it every 3 months. If you're too risk-adverse to be in the market, then at least put it in laddered GICs so you only have to "rate chase" once a year. But if you want any real growth, your investments need to be, well, invested.

lol fair enough! I'm illogical lots of times so I can relate. I'm just rigidly logical about money, probably because my parent's weren't so I swung the pendulum the other way... I won't even spend $100 without taking a week to research all the options, read reviews, etc. $100,000 impulsively would break my brain!

An ex-spouse of one of your kids?? How does that happen? My father had his will written so that not even my current and only spouse could get at it.

The other thing that enters into it in the retirement phase is that money is in the reverse situation of what it was when you were working. Instead of earning and saving, you are looking to create income streams and make sure you have cash flow. It turns everything upside down. If you've done a good enough job so far, you no longer have to save up for anything, but a lifetime of habits aren't easily broken.
"Retirement income planning" is a whole other art and there are far fewer resources on this than there are on the earlier part of life. Most in this field seem to recommend a substantial cash nest egg be retained. If the furnace, AC, car, and roof die in succession and your investments tank, you're going to need that 100K and you'll be really glad it earned that boring 2%.

I see what you mean, Bill. I had thought you meant it was already a done deal that the money would go to the ex.

No, you can't do anything about it if your child chooses to put the money in a place where it automatically becomes joint property, like a house etc.
But you can do other things. You probably know this already. You can stipulate in your will that the money is not to be matrimonial property (at least in Ontario you can). That idea was put in to help women, if I remember correctly.
Then, if your kids are savvy enough, they can continue to keep it segregated indefinitely. I know someone who has done this to very good effect - in this case, after 20 years, the spouse still doesn't even know how much is in the pot.

I expect you've already asked a lawyer about this, but, if not, please do.

I think too that there's nothing to prevent you from adding advice to your will. I expect you've already discussed all this with your kids and they sort of know what your advice would be. But, still, a fatherly "Dear Susie" to be read upon your death is not out of place and might hold more weight as your "last words" than it does now. Tell them how you would like or advise them to handle the money. And the next generation can do the same thing as long as they continue to keep it in a one-owner account.

the money can certainly be used to help your child's family without adding to the spouse's estate. It can be the cash they need to buy a new car (in your child's name) or take a family vacation, pay for grandchild's tuition, etc.

Alternatively, out of your annual surplus, send them on a vacation or whatever - something nobody can get at later.

I'm not sure what you mean about the spouse at the time of bequest.
I read that excerpt as agreeing with what I wrote before.

My point was that a parent can make a bequest to a child which specifies that the gift is not to be part of the child's matrimonial property, and that this can be upheld. As the excerpt states, it was pursuant to changes in the Family Law Act (which were intended to give better protection to women in the event of divorce, as I recall.)
However, I have been told that the child must then take measures to ensure that the gift doesn't get mixed in with their matrimonial assets such as house, joint accounts etc. If it does get mixed in, then that takes precedence and cannot be disentangled later.

At best, though, this only applies to the "increase", not the actual inheritance. AND, you can contract out of it, which is what I meant about the child needing to be careful to continue to segregate the inheritance.

Further, the whole thing is exempt if received during a marriage, as per the second sentence.

Actually, I don't think this excerpt is very well written. Shorter sentences, if necessary with sub-heads, would have been made the intention clearer.

Anyone involved in this kind of situation or anticipating it should probably consult a lawyer.

For what it's worth, to my hearing, you sound a bit conflicted over this, Bill. I'm just flagging that.
My understanding is that lawyers typically suggest these kinds of clauses for wills, but of course you don't have to accept them.
I'm not trying to change your mind in any way. You should do what you think best. The discussion in the last several posts was only about clarifying what the options were.