Parents, digital assets and pets the new frontiers of estate planning

“As our society continues to evolve, the scope of our estate plans needs to widen,” says Tina Di Vito, head, BMO Retirement Institute. “Advancements in technology, the significant role pets play in our lives and the increase in average lifespan mean Canadians must now take into account a number of new elements that, if not properly addressed in your estate plan, may leave your loved ones scrambling.”

Caring for aging loved ones

As life expectancy continues to rise, an increasing number of boomers are becoming a caregiver to an aging loved one. According to the report, almost 20% of Canadians currently care for an aging parent, with 53% of them providing both personal and financial support. However, if that caregiver dies unexpectedly, and contingencies are not included in the estate plan, the risk of the parent losing quality care could greatly increase.

The report found that only one-third of Canadian caregivers have made a provision for their parents in their estate plan. Thirty-nine per cent said they had not included an older parent, relative or friend because the probability of outliving them is too small.

“It’s understandable that the idea of including your own parent in an estate plan seems out of the ordinary but, with today’s aging population, it’s necessary,” says Di Vito. “Being proactive is critical in ensuring that your loved ones are well taken care of in the event they outlive you.”

Digital assets

A growing number of boomers have a personal, professional or financial presence online. This, in turn, has led to an increase in the amount of intangible digital assets that they must manage. Eighty-six per cent of Canadian boomers use at least one financial online tool. They are actively involved in online areas such as finance, social networking and online data collections including photographs and music. However, Canadians have not been addressing these in their estate plans.

According to the report, more than half of those with digital property believe it is important to set contingencies in case of one’s incapacity or death. Yet, 58% with digital assets who have made formal estate planning arrangements have not made provisions, with the top reasons being that they did not think of it or they did not think it was necessary.

Pet ownership

The emotional attachment to a pet can be intense. As seniors live increasingly longer, pet ownership will likely rise, along with the emotional need to ensure pets are cared for after one passes away. Most pet owners would like to guarantee some degree of security for their pets.

The report revealed that almost half (49%) of Canadians own a pet, and 76% feel it is important to make arrangements for the ongoing care of their pet. However, only one-third have made an estate planning provision for their pet.

Di Vito offers the following estate planning advice to consider:

> Have ‘the talk’
To help determine how to include aging parents as beneficiaries in your estate plan, have a frank conversation with your spouse, siblings and parents about how to ensure your parents’ continued care is not at risk.

> Think digital
Consider consulting your legal advisor about how to safeguard and ensure an orderly distribution of your digital assets to loved ones so they are able to access online financials, close out email and social media accounts and retrieve sentimental digital photos or extensive music collections.

> Caring for Fido
Consider leaving a reasonable monetary legacy in an estate to a caregiver who could use the funds to care for your pet. Including this provision will minimize the risk of the pet becoming abandoned or given to a shelter.

A copy of the full report is available at www.bmo.com/retirementinstitute.