NE OF THE money games’ most ‘difficult
(impossible?) tasks is the forecasting of in-
rterest rates, and it is probably safe to say.

that ‘no financial expert-has’a perféct batting record-

in this field.

At least two things are cer-
tain about interest rates: they
will change from time to time
depending on man’s ac-
tivities, his politics, and how
he and his institutions
perceive the future, whether
with alarm or optimism; and
the intensity of speculation
about interest rates similarly
will rise and fall, intensify
and abate from time to time.

For many weeks riow there
has been nervous speculation
about interest rates and the
consensus is. that interest
rates appear . to. be

emphasized that Only 2 ‘slight ;
~ | fore

the Bank of Canada raté has ;
been moving up and it reach- °,

ed its highest level in'more
than a year on March 1. (The
Bank of Canada rate is an-
nounced each Thursday and,
because this column is writ-
ten in advance, the Thursday,
March 8 rate was not

What’

WHAT’S IN a= will?
structions on how you want
your estate distributed after
your death.

A properly-made will can
save your heirs considerable
trouble, and often a good bit
of money; a slipshod or non-
existent will can make your
heirs remember you for all
the wrong reasons.

SPECIAL LAWS

Each province has specific
laws as to how the estate is
divided if a person digs in-
testate -— that is, without a
will. This distribution may be
quite different from what
you intended.

Also, depending on pro-
vincial laws, the size of the

In-

the time of

available at
writing.)

estate, and the type of assets,
your heirs may quite likely
have to go through probate
to get a court-appointed ad-
ministrator to distribute the
estate. This can be expensive,
and might not have been
necessary if the will was pro-
perly made.

GET GOOD
LEGAL ADVICE

A lawyer or notary can
assure you that your final
wishes have been legally re-
corded, and will! be respected.
He or she can also make sure
any provincial family laws
concerning rights of
beneficiaries have been taken
into account.

8 “and - the
owners must pay the bank for
‘their mortgage).

CREEPING UP
Coincidentally with the rise
in the ‘bank rate, the Cana-
dian Imperial Bank of Com-

~tierce--and—Canada— Trust" Now debenture-rates-are-up ~~

moved up mortgage rates.
The Commerce moved up its
rates on ali mortgage terms
by between one-quarter and
one-half a percentage point.

Canada Trust raised its six-

month:and one-year rates by
a quarter point. By the time
this appears in print it is pro-

Bable that other financial in-
~Stitutions will also have an-
nounced mortgage rate

increases.

To check the trend we
spoke to a cross-section of
financial people who keep
their fingers on the pulse of
interest rates.

Bruce Timmons, acting
manager of the Commerce’s
B.C. region, explained the

bank had moved its rates up
- to get a better spread”’ (that

is, the difference between

- what the bank must pay in in-

terest on money it takes in
intérest. property

*‘Up to several years ago
we looked for a two per cent

If your estate is small and
its distribution very simple,
you can purchase will forms
at a stationery store. Proper-
ly filled out and witnessed,
these do-it-yourself wills are
valid legal documents, but
might have to go through
probate. .

MYSTERY

A holograph, or hand-
written will, figures in many
amystery novel, as it can be a

“subject of interesting com-

plications. Unless you know
exactly what you are doing —
are @ lawyer or notary
yourself — or you have vir-
tually no assets — only a gold
bracelet to leave to your niece
— you are doing your heirs

How much can you afford?

YOU HAVE a golden oppor-
tunity to purchase a lovely
house in the perfect
neighborhood Can you af-
ford 1?

The only way to determine
this 1s to sit down with a picce
of paper and calculate your
monthly expenses. You will
often hear the formula that
you can afford to spend 25%
to 30% of your gross (before
taxes) monthly income on
mortgage payments. Like
many gencral guidelines, this
is a bit too broad to be useful
in specific cases.

Once you have figured out
how much you can offer as a
down payment — and,
hence, how much you must
borrow — you can find out
from mortgage lenders what
your monthly payment would
be. Write that down.

Then list all the monthly
payments you will be making
as the proud owncr of the
new home — heating, clec-
tricity, city taxes, water,
repairs and so on. Talk to a

home-owning friend in the

same town about how bills
tend to run, if possibic, talk

to the owners of your pro-
spective home about how
much they pay on regular
bills.

Check on insurance costs
for that particular house

Ask the municipality about
taxcs.

Amortize yearly
over 12 months.

Make sure that the figures
you are using here are fac-
tual, not your own estimates.
There is, alas, a tendency to
be too optimistic about these
**secondary’’ costs which
can, in fact, amount to a very

charges

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Beat the rush

GWEN ANTAYA

hefty sum.

One way to cut mortgage
payments of course, is to
make the biggest down pay-
ment you can afford. How-
ever , you must be careful to
have funds left over for mov-
ing expenses — legal fees,
moving company charges,
new furniture and appliances
you may have to purchase,
renovations, and so on.

lt is better to take a hard,
calculating look now than to
make a mistake on what is
likely to be the biggest fi-
nancial deal of your lifetime.

TOGETHER

se 500

call 7 days a week til9 pm

986-5560

spread,’” said Timmons.
*“‘Over the last few years we
have gone along with a
spread down to 1% per cent.

to nine per cent (the interest
the bank must pay) for one
year, and the one-year mor-
tgage rate was 10% per cent,
which is only 1% per cent
spread.’’ Hence, the bank
moved to restore its spread.

HISTORICAL TRENDS

An upward movement in
interest rates is also foreseen
by Bert Wickham of Bert
Wickham and Associates, an-
nuity brokers in West
Vancouver.

**It looks as though in-
terest rates are nudging up-
ward in spite of government
attempts to keep them
down,’’ he observed.
Discussing interest rates in an
historical sense, Wickham
noted that they have moved
between two and 20 per cent
for 200 years.

**At 20 per cent rates are
exhorbitantly high. No
economy can stand that rate.
Single digit rates are the only
healthy rates.’’

7 - Friday, March 9, 1984 - North Shore News

~ res .

Those who forecast

in-
terest rates have ‘‘a dismal

record,’” comments Bill
Cook, manager, personal ser-
“Wices, for National Trust’
the B.C. region.

‘‘We don’t predict beyond
12 months. We see a slight
easing upward, but not too
dramatic.”’

Richard Allen, senior
economist, B.C. Central
Credit Union, states the

credit union’s position is that
there is definite upward
pressure on interest rates, due
to the large deficit and heavy
capital spending in the U.S.,
coupled with a low rate of

savings. His views is
somewhat more encouraging
over the longer haul,
however.

CAROUSEL RIDE

Over the next decade mor-
tgage rates are expected to
trend downward, said Allen,
with ‘‘ups and downs in bet-
ween.”’ He adds that down
means perhaps about two
percentage points.

In any discussion of in-
terest rates, it must be noted
that because of Canada’s

-and why

no favors by hand-writing
your will. It must be pro-
bated, and if there are legal
problems it could be invalid.
In Quebec, where there are
succession duties, a _ ho-
lograph or do-it-yourself will
is particularly. risky. It is best
to seek the advice of a lawyer
or notary to avoid paying
more tax than necessary.

HOW EXPENSIVE

People sometimes hesitate
because they think a will is
expensive. Actually, it often
costs no more than the
family’s weekly grocery bill.
A will is one of the cheapest
services available from a
lawyer, and can save much
more than its cost in expenses
for probate, or in legal fees to
straighten out a tangled
succession

NOT TIME-CONSUMING
Making a will need not be
tume-consuming or trouble-

who won?

What US) tennis player
won the 1983 US Open
Tennis Championship wear
ing Converse tennis shoes?

TIME OUT
r=" SPORTS

jroo
980-9211 960-0116
1199 Lynn Valley Road

some. Experienced lawyers
and notaries can draw up a
good will very speedily, as
most of the text is standard.
Literally, a few minutes with
your lawyer or notary can
save weeks and months of
wrangling among your heirs.

Any changes to the will,
also should be done through
a lawyer or notary. As the
children grow up, if you
divorce and remarry, open a
new business, etc., the will
should be modified or re-
written to reflect new
circumstances.

DON’T LOSE IT
Finally, once the will is
written, make sure your heirs

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close trade, commercial and
other ties with the U.S. we
are,. it seems, inextricably
bound to whatever happens
F With that in
mind, many observers have
been pondering the impact of
the forthcoming U.S.
election.

One theory has been that
the Reagan administration
would not allow interest rates
to rise in an election year;
higher rates could punish
them at the polls. Now an
emerging point of specula-
tion is that perhaps Reagan
need not worry about interest
rates. After all, in the U.S.
unemployment is down, in-
dustrial production is up, and
the Democrats are having dif-
ficulty in reaching a consen-
sus as to whom their
presidential candidate will
be.

It is one of the frustrating
aspects of our economic
times that, for instance, a
North Shore resident
sometimes must be concerned
about what is happening
south of the border to help
get a ‘‘reading’’ on the possi-
ble future of interest rates.

know where it is. Put the
original in a safety deposit
box, safekeeping with the
lawyer, or on file with the
notary and keep a copy at
house or office. Make sure
someone you trust knows
where to find it.

If you have specific in-
structions on disposal of your
body, you want your heirs to
know immediately what to
do. Tell them ahead of timne.
Often, people will not look at
your will until after the
funeral.

Prepared bythe Consumer
Education Department, Bank
of Montreal, Head Office,
Montreat.

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