Will and estate planning present an opportunity to strengthen your relationships with clients and assure clients that their heirs will be financially secure in the future.
Estate planning encompasses a wide range of issues. A good way to start is to make sure you have a clear picture of the client’s financial situation. The best way to gain a good perspective on a client’s needs is by making a list of financial issues and going over them with the client during a face-to-face meeting, says Douglas Gray, author of The Canadian Guide to Will and Estate Planning.
The checklist should act as a summary of the client’s financial situation and family obligations, with key information such as:
> the client’s current marriage;
> previous marriages;
> names and ages of all children;
> a detailed summary of the client’s assets;
> a detailed summary of the client’s debt.
Gray stresses the importance of also addressing details such as the age at which minor children should be given access to their bequest.
A checklist is especially important when dealing with mature clients, according to Gray. “In the 50-plus set, decision-making can be more challenging,” he says. “Financial planners need to metaphorically take the hand of the mature client and walk them down the road of why it is important to have a comprehensive estate plan.”
Hand out a questionnaire
Another important estate-planning tool is a questionnaire, which clients can complete at their leisure. It is a good way to get clients to think about important issues and get them motivated to sort out key details.
The questionnaire should ask such basic questions as:
> Do you have a will?
> Is it in a secure place, such as a safety deposit box?
> Have you selected an executor?”
Providing clients with a questionnaire is a great way to demonstrate your commitment to providing holistic advice and build client loyalty, Gray says.
Take a team approach
Because most clients deal with their financial advisors more frequently than with lawyers or accountants, you have an opportunity to act as a catalyst for the estate-planning process, Gray says.
“Advisors should look at themselves as an integral part of the estate planning team,” he says. “They are dealing with the client’s investments anyway, so they should proactively try to find out who the client’s tax and legal advisors are. And if the client doesn’t have a lawyer or an accountant, encourage the client to get them.”
Ensuring that there is a focused team working on the client’s will and estate plan is essential to avoid common errors. For instance, if a client owns a small business, there is a high risk that there may be claims on the estate and assets by creditors in the case of sudden death.
Good, strategic tax, legal and wealth planning can minimize the risk that assets will be depleted in such a scenario.
IE