Advisors urged to discuss wills with clients

It might be a difficult subject, but advisors have a duty to discuss wills and estate planning with their clients. A survey released earlier this week by RBC suggests that fewer than half of Canadians have a written will.

The poll, conducted by Ipsos Reid for RBC Financial, found that 46% of Canadians did not have a will, although 56% said it was something they plan to take care of this year.

Talking about wills shouldn’t be an issue for professional financial planners, says Ted Rechtshaffen, CFP, president and CEO of TriDelta Financial Partners, a fee-based firm in Toronto.

“On our initial questionnaire, we ask, ‘Do you have a will, do you have a power of attorney, and when was it last updated,'” he says.

“As CFPs, we’re not just looking at your investment statements. It’s looking at the broader planning picture and understanding clients’ long-term and short-term goals,” Rechtshaffen adds. “I think that as a financial advisor, you have a responsibility to talk about some of these issues because who else talks to them about it?”

Canadians who do not yet have wills also risk leaving family members and friends with the burden of trying to sort through what’s been left behind, says John Hamilton, president of RBC Estate and Trust Services. “Anyone who has ever been through a situation where they’ve had to empty out a deceased relative’s home and personal papers, or had to deal with upset relatives or friends who each want something to remember the deceased by, can attest to how very difficult this is on everyone involved,” Hamilton notes. “Getting your wishes clearly stated in your will saves your family and friends a lot of heartache.”

It’s also important to consider that if you die without a will, government legislation determines the distribution of your estate, says Hamilton. “How and what the government decides to do with your assets may be very different from what you intended, and there is no guarantee that the process will be handled in the most tax efficient way.”

Rechtshaffen says the client’s age is the most important factor when discussing wills. For older clients, he says, it’s a much more immediate concern than for someone who is 30 years old.

“On the other hand, if there is someone who is 35 with children without a will, we talk a little bit about what would happen if anything happened to the parents, who would be responsible for the child. That tends to be the biggest emotional issue to get someone motivated to get it done.”

Of course, you need a lawyer to set up a will. That’s why centres of influence are important, Rechtshaffen stresses. “You want to be all things to all people, but as an individual, you can’t be an expert on everything. So we have relationships with a few lawyers who specialize in wills and estate planning.”

“From our perspective, anytime we can make a referral to a centre of influence, it increases the chances of them referring business back to us.”

Still, Rechtshaffen says he understands why a lot of advisors don’t talk to clients about wills. “They’re thinking short term and thinking they don’t get paid to have that discussion; they get paid for managing investment dollars or selling insurance,” he says. “It’s unfortunate, but at the same time, it’s how they get paid. If your boss is telling you to get your numbers up, it’s not going to motivate you to ask the question about wills more often.”

Filed by Doug Watt, Advisor.ca, doug.watt@advisor.rogers.com