A well-crafted estate plan can make a difficult time a little easier for a family. But in order for the plan to be most effective, all concerned family members should be informed.
“Part of our responsibility is to educate not only our clients but the kids of our clients,” says Mark Farris, director and wealth manager with Farris Wealth Management Group, a part of Richardson GMP Ltd., in Calgary. “The better we can educate [the family], hopefully, the less conflict arises.”
Follow these tips to help make estate planning a smooth process for your client’s family:
> Start with a review
Before bringing the family in, start the estate planning process with a review of your client’s documents.
Make sure your client has an estate lawyer — or introduce him or her to one — who can ensure documents, such as wills, are updated, says Kerri Alexander, wealth-planning associate with Farris Wealth Management.
And to ensure no important papers are overlooked, Alexander recommends using tools such as an “estate record keeper,” a checklist and filing folder that helps track documents.
“A document like that summarizes the entire estate,” Alexander says. “If we can provide tools like that to clients, it’s a big benefit.”
> Work with others
Estate planning involves other professionals. “As an advisor,” Farris says, “you have to understand what you’re competent in and what you’re not.”
Make connections with other necessary professionals, such as lawyers, Farris says. Make sure it’s someone you feel comfortable referring clients to and calling to clarify certain parts of the plan.
> Arrange a family meeting
Once you’ve done all the groundwork, bring in your client’s family for a meeting.
Most of the recommendations made in estate planning will benefit your client’s children or heirs, Alexander says. So, you should make sure they fully understand the process and why certain recommendations were made.
Farris’s team often holds family meetings at the office to explain the plan to a client’s children, Alexander says. An estate lawyer will also be present at the meeting to answer any questions.
If a family member cannot physically make it to the meeting, the team arranges a conference call.
> Keep it simple
Recommend clients choose one executor to make the estate planning process easier.
Many parents name all their children as executors, Farris says, thinking they are being “fair.” However, it’s often best that only one person take on the job, which can be demanding.
“The one who actually gets named,” Farris says, “is the one who should be upset.”
> Prevent a scavenger hunt
Encourage your client to create a filing system in which all the documents related to the estate plan are organized, and tell family members where it’s located.
“A key part of estate planning,” he says, “is making sure that [the client’s] children or spouse don’t have to turn into detectives to try and find all of the important information relating to the estate.”
> Revisit the plan
For a successful wealth transfer, make sure the estate plan remains current.
For the Farris team, Alexander says, estate planning is a perpetual agenda item. The team generally reviews and updates the plans every three to five years. As well, the team may speak again with the client’s family if any major changes have occurred or if the children need further explanation about the plan.