No one likes to think about the possibility of divorce. Unfortunately, however, it does occur, leaving emotional and financial uncertainty in it's wake. As with any major life change, attention needs to be paid to your financial plans and goals.

Due to the emotional nature of divorce, it can be hard for some people to concentrate on the financial aspects of their life. However, as hard as it may seem, some decisions need to be made regarding savings, housing, etc.

If you have children, you will need to work out a financial plan with your ex regarding support. You will also need to factor in such expenses as post-secondary education, and arrange some sort of savings plan in order to provide for future expenditures. Also consider such items as vacations, car insurance for teenagers, etc. Both parents should have life insurance in order to protect the children's financial interests should something happen to one of you.

If you are just recently separated, do not rush out and purchase a new home. Rent for a few months, and house hunt, but avoid the impulse purchase. Buying a home that you later decide you don't like, or have decided to move to another area, etc. can seriously affect your finances. Allow yourself some time to get acclimated to your new situation, and avoid making any big purchases. Wait until you are more certain of what's in store for yourself, and then make a decision on home buying. If you are planning on selling the marital home that already has a mortgage, you may find it hard to acquire a new mortgage until the first has been settled.

Obviously, you will need to make a new financial plan, based on your earnings, not the combined earnings you had. Re-evaluate your spending habits as well, they should reflect only your income. Many people find themselves deeply in debt when they keep spending the same amount, but with only half the income coming in. As well, consider your long term financial goals, with a view towards retirement. It's advisable to consult with a financial planner at this point in order to ensure a secure financial future for yourself.

Both parents can purchase term life insurance policies that are specifically designated for the care of their children in case of death. Both parents can buy term life in an amount that takes care of the children until they are adults. Disability insurance is a good idea as well, as there is only one income in the house. Should you become ill or get injured, you will need to still have money coming in to take care of the household responsiblities.

Many Canadian homes have both parents working; either by choice or financial necessity. If you are planning on having one parent stay home full time, it's important to plan for it financially and emotionally. Although reducing your family income can be a rough transition, being prepared can help you adjust to the new changes.

Don't just quit your job. It's a good idea to actually try living on one income before actually quitting your job. Do a "dry run" for 3 months living solely on the one paycheck, and bank the other. This gives you the option of changing your plans if necessary without having to look for another job, as well as some savings!

Review your financial plan. You will need to re-work your financial plan, as your yearly income will be decreased. This change in income will affect not only your short-term finances, but your long term goals as well. Expensive items, such as cars, vacations, etc. will need to be discussed and planned for. As well, long term financial goals such as retirement may need to be reworked.

Make a new budget that reflects the change in income. Your new budget should cover all the household expenses as well as savings based on the one salary. It is recommended that 60% of your gross income goes to committed expenses, i.e. taxes, mortgage, utilities, credit cards, etc. 10% should be saved as an emergency fund (ideally this fund covers 3-6 months of living expenses). 20% should be committed to your long term plans and retirement fund. The remaining 10% of your income should be spending money to cover expenses that are not considered a necessity. Each spouse should have their own bank account, in which they each receive 5% of the "fun" money each month to spend as they please. This gives both partners some financial independence.

Review your insurance before quitting your job. The stay-at-home parent needs to maintain adequate insurance. Life insurance not only covers lost income in case of death, but the costs required to maintain the family. Should the stay-at-home parent die, expenses such as daycare, home maintenance, etc will need to be covered. Disability insurance at this stage is also recommended in case the working parent suffers an accident or illness. It is also important to review health insurance policies to ensure that the working parent has sufficient coverage that covers the whole family. If the parent who is quitting their job has been the sole provider of health coverage through their employer, other insurance is available. HealthQuotes.ca offers FollowMe, which does not require a medical questionnaire if applied for within 60 days of discontinuation of group insurance. This policy provides health and dental insurance at an affordable rate.

As family finances change, it is important that all financial goals are reconsidered. Your insurance coverage needs to reflect these changes in order to best provide for your family. Before making any major decisions, consult with your insurance broker in order to ensure you have the correct coverage, and to make the necessary changes.

People buying a home in Toronto in 2008 will have to pay a land transfer tax levied by the city. This municipal tax is in addition to the provincial land transfer tax already in place. First time home buyers will be exempt from this tax on the first $400,000 of their property purchase. This tax is paid through your lawyer as part of the closing costs.

This new tax will not be applicable to people who have a Purchase and Sale agreement on or before December 31, 2007, regardless of the actual closing date. As well, home buyers who have a Purchase and Sale agreement signed after December 31, 2007 but with a closing date before February 1, 2008 will be exempt from the tax. For those who have a Purchase and Sale agreement signed after December 31, 2007 with a closing on or after February 1, 2008, you will be required to pay the full Toronto Land Transfer Tax.

The amount you will pay depends on the value of the home you are purchasing. The Toronto Land Transfer Tax has been broken down to these percentages:

• Homes valued up to and including $55,000 will pay one-half of one percent of the purchase price
• Homes valued over $55,000 up to and including $400,000 will pay one percent of the purchase price
• Land containing one and/or two single family residences exceeding $400,000 will pay two percent of the purchase price
• Commercial properties, including multi-residential units exceeding $400,000 up to $40 million will pay one and a half percent of the purchase price
• Anything over $40 million will pay one percent of the purchase price

This new tax poses an additional financial burden on people in Toronto who are planning on buying a home in the new year. One way to save money when buying your new home is to use term life insurance instead of the mortgage insurance offered by the lending institutution. A term life policy in an amount that covers your mortgage can be significantly cheaper. As well, the value of a term life policy never decreases; mortgage insurance usually only covers the existing balance owing, not the original value. A term life policy also gives the homeowner an extra advantage by giving him/her the power to name the beneficiary. This allows the beneficiary to decide how best to spend the money should something happen. Consult with your broker about this option before committing to mortgage insurance.

Life-Quotes.ca is pleased to announce a new insurance product available for Ontario and Quebec residents. Ontario Blue Cross has released a life insurance policy that can be combined with Long Term Care and Critical Illness Benefits. Until now, life insurance and LTC insurance policies were purchased separately.

Tangible offers the policy holder some very unique options in their insurance planning. With a hybrid policy, you have insurance that reflects your different needs throughout your life. You have life insurance coverage with a level and guaranteed premium. Coverage starts at $5,000 and goes up to $1,000,000 in increments of $1,000, so you can choose the amount that best suits your individual needs. It also gives you payment options such as whole life, 20 years, paid up at 65, and the rates are affordable.

As well as having life insurance coverage, you have the option of combining Long Term Care coverage. By having this hybrid policy, should the need arise; your policy can be converted to suit your changing needs. By having this plan, you can avoid the traditionally more expensive LTC rates, as this plan only converts if and when needed. The rates are leveled and guaranteed, so you can avoid purchasing a separate LTC policy with rates that are subject to being raised. If you suddenly find yourself needing LTC, you can convert either 2 or 5% of the initial amount. Benefits are paid monthly and are tax-free. Critical Illness coverage can also be purchased with this policy, thereby covering every possibility that may occur in your lifetime.

There are some health questions needed in order to be eligible for this type of coverage. If you currently suffer from such conditions as HIV/AIDS, Alzheimer's disease, Angina, have suffered a stroke and/or heart attack, you are not eligible. Be advised as well that for people with a family history of certain genetic hereditary conditions, you may still qualify for these valuable benefits, at an adjusted premium. Please call Life-Quotes.ca for more information, or consult with a broker to see if this coverage is right for you.

As parents get older, circumstances can sometimes be reversed, and the children assume the care of their parent(s). Loss of a spouse, health concerns and/or advanced age are factors that can affect your parent(s) independence. This role reversal can be a difficult transition for both the parent and the child. However, with open communication and patience, this transition period can be made less difficult.

An issue that can be difficult to discuss with your parent(s) is their financial status. However, in case of sudden death or illness, you need to be aware of insurance policies, bank accounts, etc. If you need to talk to your parent(s) about their finances, here are 5 questions you should ask them in order to obtain the information you need.

Ask for a complete and thorough list of all their assets. Besides the obvious assets, such as a home, cottage and/or vehicles, you need to know exactly what their assets are. This includes bank accounts, real estate investments, pensions, RRSP's, etc. Get copies of all their financial documents, and keep them together in a file folder. In case of illness or death, you will need to have access to these documents.

What are your parents total liabilities? You need to be aware of any current debts that they owe. This is also a good time to discuss different finance options, such as debt consolidation. If they have co-signed for another person's debt, make sure you obtain this information as well.

Are your parents going to need financial support in the future? Realistically look at their income from pensions and/or savings. Will this be enough to support them, and for how long? How much income is generated from their investments? If your parent(s) have not managed to adequately save enough, this is the time to talk to your sibling(s) or other family members about financial support. You may want to consult with a financial planner about investment options.

Do your parents have insurance coverage? Ask to see all current insurance policies your parents have. Health insurance is critical at this stage in life, as well as life insurance. This includes any policies that they may have from employee benefits, as well as any that they have purchased. Check to see what kind of coverage they have, and any terms and conditions of the policies. If they have term life coverage, check to see when this expires. If they do not have adequate coverage, this is the time to consult with your insurance broker and obtain the policy that is right for them. You also need to be aware of who is named as the beneficiary, and update this if necessary. Get copies of all insurance policies so you have access to the information if needed.

Discuss Power of Attorney. Although this can be a very sensitive topic, you need to discuss what will happen in case of sudden and/or prolonged illness. Talk to your parents about who they would like to take on this responsibility, as well as their wishes. Talk to them as well about their wishes in regards to a living will.

It is important to discuss these financial issues as soon as possible. By having a complete picture of your parents' financial status, you can make plans accordingly. If you discover that your parents don't have sufficient life insurance coverage, you may want to consider a Guaranteed Issue policy. There is no medical questionnaire and acceptance is guaranteed. This is beneficial for those who have current health issues. There is also Guaranteed Issue Health Insurance, for those who do not have coverage. This also does not require a medical exam. Health insurance is imperative for the elderly, as their risk for developing health problems increases. Talk to your parents and your insurance broker to ensure that they have adequate coverage.