As financial advisors, helping clients plan for their future is where we shine. An advisor’s role revolves around helping clients achieve financial security and save for specific milestones, such as buying a home, their child’s education, retirement, etc. For the most part, these conversations happen relatively naturally, because clients want to visualize these life events. They want to work towards a future where their financial goals are achievable.
It’s less comfortable, however, to talk about estate planning and mortality. Much like exploring coverage for an unexpected accident or illness, discussing what will happen to your estate after you pass can be quite emotional and uncomfortable for clients.
Although we know that estate and end-of-life planning is a critical part of building a holistic financial plan, less than 50% of Canadian adults have a Will today. As an advisor, this puts your client’s hard-earned assets and years of thoughtful financial decisions at risk. So then, why do so few Canadian adults have a Will?
To better understand this statistic and help financial advisors build end-of-life planning into their conversations with clients, we turned to the following industry experts with some questions:
- Erin Bury, CEO and Co-Founder, Willful
- Jennifer Good, CEO and Co-Founder, Peacefully
- Arin Klug and Daniel Goldgut, Co-Founders of Epilogue
How does estate planning fit into a comprehensive financial plan?
We wanted to know… how important is it to include end-of-life and estate planning in your clients’ overall finances? Here is what our experts had to say:
“We spend our entire lives trying to build wealth through investing and saving, but we miss the mark on a crucial part: passing on as much of that wealth as possible, which is why estate planning is so important.” – Erin Bury, CEO of Willful.
Willful is an online platform that makes it easier for Canadians to prepare for and deal with death in a digital age.
“Estate planning is financial planning – but instead of helping you today, it’s helping your family tomorrow. Working with a great tax or financial advisor can mean hundreds of thousands of extra dollars in your beneficiaries’ pockets.” – Bury
It’s also important to note that not having formal documentation (Wills, financial accounts, etc) in place could cost beneficiaries thousands of dollars in legal bills and/or family disputes.
“On average, estate heirs spend $10k in legal fees and up to 500 hours to settle an estate. When grieving the loss of a loved one, the last thing you need is added stress and barriers involved in getting your assets in order.- Jennifer Good, CEO of Peacefully.
Peacefully helps people prepare comprehensively for end-of-life by organizing documents, ensuring critical decisions are made in advance and helping families navigate next steps.
Looking at it objectively, one of the main benefits of having a Will, much like Life Insurance, is to ensure your family’s assets are secure. Both types of protection fall under the umbrella of using end-of-life planning to have more control over your family’s inheritance and the way it is distributed.
What makes the process of estate planning challenging today? How can advisors reduce the burden for their clients?
Traditional estate planning is a lengthy process and includes a fair amount of arduous paperwork – it’s not exactly a walk in the park. Some clients postpone completing their Will because they believe working with a lawyer will make the process too expensive. However, they may not be aware that it’s not always required to involve a lawyer.
“Going to a lawyer can get quite expensive and may not be necessary if you don’t have a complicated situation. Most people don’t know this, but anyone is allowed to make their own Will. The problem is that they may not know where to start or how to go about making a Will legally binding—so they just end up just putting it off altogether.” – Arin Klug, COO & Co-Founder of Epilogue.
Epilogue is a simple, fast, and affordable way for clients to make legally-binding Wills online in 20 minutes.
As an advisor, it’s important to know when a client should seek legal support, or alternatively, if they can simply avoid those costs.
“For most clients, an online option like Epilogue works really well. If you have clients with more complicated estates and/or wishes (for example, if they have children from multiple relationships, if they have a dependant that is currently receiving certain government benefits, or if they want to explore probate and other tax planning opportunities) we recommend they speak to a legal professional before getting started on their Will.” – Daniel Goldgut, CEO & Co-Founder of Epilogue.
As mentioned earlier, the consequences of not preparing for end-of-life include significantly higher legal fees. To help beneficiaries avoid the additional stress down the road, advisors can help walk their clients through the pros and cons.
“Beyond the will, most people do not prepare comprehensively. Financial advisors can help their clients aggregate documents like the will, financial accounts, insurance, bills, contact lists, online accounts, to make it easier for their family to settle affairs after a death occurs. Otherwise, families spend hours searching for these documents and trying to think through what you would have wanted.”- Good.
Jennifer Good knows how painful the process is from first-hand experience, which is what inspired her to launch Peacefully. Now, she’s on a mission to help families ensure their assets are in order so they don’t become overwhelmed with administrative work while coping with the loss of a loved one.
Recommending a digital platform that can reduce costs and handle the paperwork is a great way to improve the experience for your client.
“We work with so many advisors who recommend Willful to clients because they’re sick of telling their clients year after year to get a will, only to find they haven’t done it by the next appointment. Advisors can’t control whether a client takes action – but providing a simple, affordable tool they can use from home is a way for them to close the loop.” – Bury.
How can advisors build estate planning into their conversations with clients?
To close off our article, we asked our guest contributors to compile a few tips to help advisors incorporate estate planning into their client conversations:
“COVID has really highlighted that Canadians need to be prepared for the unexpected, so I would recommend looping estate planning into a larger conversation about emergency preparedness – Power of Attorney documents, emergency funds, Life Insurance, and Wills. It’s also a great topic to align with philanthropy – if you have clients who are looking to give to charity or design a philanthropic plan, leaving a gift in their Will is the easiest way to have an impact” – Bury.
“End-of-life planning is awkward to bring up. However, if a client is already thinking about buying life insurance, emotionally they’re in a similar place/mindset. It’s easier to tie in a conversation around estate planning at this point.” – Good.
“Although the Will-making process can feel overwhelming, it doesn’t have to be. The truth is most people really only need a basic Will, and these days you can make one online at a fraction of what it would cost to see a lawyer. A good advisor can help clients realize that estate and end-of-life planning doesn’t have to be so daunting.” – Klug.
Regardless of the approach, advisors can keep their clients informed. By speaking confidently about estate planning, advisors can address some of the misconceptions and feelings of anxiety.