Personal Finance

Seven smart tips for vacationers and snowbirds
By Gail Bebee | 07/10/13

For many Canadians, the chilly evenings and ever-shorter days of autumn are a signal to make plans to flee south for at least part of the approaching winter. Whether your escape is for just a week, or it stretches through the entire winter season, there are some inconvenient but essential details to attend to before departing.

About the Author
Gail Bebee is an independent personal finance speaker, teacher and the author of No Hype--The Straight Goods on Investing Your Money. She can be reached at gbebee@gailbebee.com; her website is www.gailbebee.com.

1. Take care of your health
Some southern destinations are home to exotic diseases. Visit the Public Health Agency of Canada Travel Health website well in advance of your departure to learn about any health advisories for your destination.

If you take prescription medicine, renewing the prescription while abroad will be difficult, if not impossible. Taking a supply of pills that will last the entire trip is often the best thing to do. For longer trips, discuss your options with your physician.

Canadians requiring emergency medical care in another country generally must pay the provider for the care. Travellers should confirm that they have access to emergency funds while abroad, for example by using a debit card or credit card.

Provincial health-insurance plans may reimburse some expenses, but only at their standard rate. The amount they pay could be much less than your bill, especially for health care in the United States. Note that your provincial health coverage expires if you stay out of the country too long. Check the rules for the health plan in your province of residence.

To avoid the risk of financial ruin, having adequate out-of-country medical insurance coverage when you travel is absolutely critical. If you have supplementary medical insurance through work or another affiliation, review the policy to confirm your coverage. There may be limitations such as the number of days out of province or exclusions for pre-existing health conditions. Some group plans for retirees specifically exclude out-of-country coverage.

2. Tend to expiry dates and due dates
Check the expiry dates for things like home and auto insurance, credit cards, vehicle permits and your driver's licence. Before leaving, renew any that expire while you are away. Similarly, review upcoming bills and arrange to pay any that come due during your absence.

3. Check your vehicle insurance
Pete Karageorgos of the Insurance Bureau of Canada recommends that all travellers planning to drive while outside Canada contact their vehicle-insurance representative before leaving to review their policy. He says that while there are no significant insurance-coverage issues for the continental U.S., you may want to adjust your optional coverage.

For travel to the U.S., Karageorgos recommends at least $1 million in liability coverage. An endorsement to cover loss of vehicle use will pay for a rental if your vehicle is disabled.

If you plan to rent a car, a rental-vehicle insurance endorsement is cheaper than the rental company's collision-damage waiver. Driving your vehicle in Mexico requires additional vehicle insurance, which may be available from your insurance company or can be purchased at the border.

4. Organize care of your home(s)
Someone will need to keep the home fires burning while you are away. There will be mail to tend to, plants to water and snow to shovel. Your home-insurance policy will likely require regular checks of your heating system in season. Review the policy for the specific requirements and other limitations that apply if you are absent.

If you own a home at your winter destination, there will likely be tasks related to this property that need doing before you head south.

5. Plan for paying expenses while abroad
A credit card, some foreign currency purchased before you leave and a debit card should cover expenses for shorter trips. Advising your credit-card company of your travel plans will avoid inconvenient and embarrassing card rejection while you are away. You should also pack a photocopy of your passport and cards in your suitcase. If either is lost or stolen during your sojourn abroad, the photocopied information will facilitate the replacement process.

Snowbirds and others planning longer-term stays abroad should consider setting up more permanent, and potentially cheaper, banking solutions such as TD's Cross-Border Banking service and the Canadian Snowbird Association's currency-exchange service.

6. Get your financial affairs in order
Planning to travel abroad is an opportune time to get your financial affairs in order. This includes reviewing and, if necessary, updating your will and powers of attorney for property and for personal care.

If you want to buy or sell investments in a Canadian-based investment account while you are out of the country, consult your financial advisor before you leave. Depending on the applicable rules at your winter escape destination, your advisor may be unable to act on your instructions while you are staying abroad. You could authorize your power of attorney or another person you trust to act on your behalf during your absence from Canada.

7. Avoid the long arm of the U.S. Internal Revenue Service
Longer-term visitors to the U.S. could be deemed American residents and subject to U.S. income tax. For a stay of less than 183 days, you can avoid paying U.S. tax by establishing that Canada is your tax home and that you are a temporary visitor for pleasure. This necessitates filing IRS form 8840, Closer Connection Exemption Statement for Aliens, with the U.S. Internal Revenue Service.

To avoid hassles when entering the U.S., have a copy of the completed form for the previous calendar year and proof of Canadian residency available to show U.S. border agents.

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