Canadian MoneySaver magazine has provided Canadians with balanced insight into personal-finance issues since 1981. Through an exclusive arrangement with The Costco Connection, Canadian MoneySaver’s experts provide Costco members with answers to their questions about financial issues.
Plans to split a pension
■ Mutual funds
■ Home insurance
■ Rental properties
allocated to all existing unit holders in proportion to their ownership of units in the
fund at the time of the record date. This date
typically falls one day before the distribution
date, which is simply the date that the distributions are paid out.
For example, consider a fund with a record
date of December 30 and a distribution date
of December 31. If you sell your units and the
trade is settled prior to December 30 (keep in
mind that some trades take three days to set-
tle), you will not receive a distribution on
main if you are going to be away more than a few days at any time of the year. Margot Bai, author of Spend Smarter, Save Bigger Markham, ON We are seniors and we have a rental prop- erty jointly registered with our son. When one of us dies, do we have a deemed isposition? Or should we take our names off the property? D.S., Nepean, ON
Scott Ronalds, manager
Research & Communications
Is there an insurance obligation on the
homeowner, when absent for a few days
or more, to have someone look in on
D.E., Saskatoon, SK
Being joint tenants means there is a right
of survivorship and the deceased’s share of the
property passes to the surviving owners. At
the time of your death, for example, your
share of the property (one-third) would be
split equally between your wife and your son.
The portion that goes to your wife would pass
with no immediate tax consequences, whereas
the portion to your son (one-sixth) would be
a deemed disposition and be taxable.
My wife was a stay-at-home mom and
has not worked for a very long time.
Will splitting my pension with her affect
the amount of what I get from the Canada
Pension Plan (CPP) six years from now
at age 60?
Removing your names from the property
now will accelerate the deemed disposition of
both your and your wife’s shares of the property to the time you re-register ownership.
You may want to leave the arrangement alone.
Canadian Tax Resource Blog
D.L., Moncton, NB
Whatever decision you make on pension
income splitting for your pension plan will
have no impact on your CPP benefit.
When you get to age 60, you will have an
independent decision to make as to whether
you wish to split your CPP with your wife.
The short answer is yes. Most insurers exclude coverage for damage caused by freezing
if you are away from your home for more
than a few consecutive days. However, there
are a couple ways around the exclusion. Most
policies state that you would still be covered if
you had used reasonable care or due diligence
to maintain heat in the building. Exactly how
to interpret this is subjective, but one example
would be to arrange to have a trusted friend
or neighbour check in on your house every few
days and ensure the furnace is still operating.
Patrick Longhurst, Retirement Adviser
Longhurst and Jack Inc., Toronto, ON
However, there is another, easier way
around the exclusion in the policy wording:
Shut off the main water supply to the house
and drain all pipes and appliances before you
go away. That way, if the heat does fail, there
won’t be any significant water in the pipes to
freeze and cause damage.
Send to: Canadian MoneySaver,
The Costco Connection Q&A, Box
370, Bath, ON K0H 1G0. Or e-mail to:
I am considering selling some of my mutual funds, and I am wondering about how
a sale would affect possible distributions.
These funds distribute at the end of the
year, and I don’t know if by selling before
then I would lose the possible dividend or
whether it would be pro-rated.
(please include “The Costco Connection Q&A” in the subject line).
Even though the likelihood of a spontaneous plumbing failure while you are away is
low, the potential for damage is great. It would
be prudent for you to shut off your water
M.C., Calgary, AB
If you sell your mutual fund units prior to
the record date, you will not receive a distribution. If a fund distributes its capital gains,
dividends and interest income at year-end (as
most equity funds do), the distributions are
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