A number of the autumn issues of Investment Executive (IE) have included columns with themes related to planning and settling estates. Financial advisors should consider one key element of these articles: the role, risks and responsibilities of Canadian executors.<\/p>\n
A new reporting requirement in the Ontario probate process, the subject of an article in the mid-October issue of IE, shouldn’t be news for any Ontario-based advisor working in the estates realm. Unfortunately, many financial advisors’ sole focus on testators in estate planning precludes interest or knowledge of the important issues facing executors. Think about it: executors are chosen to gather, protect and distribute all of a testator’s worldly goods to benefit the people those executors are acting in the interests of – often, loved ones of the testator – after the testator can no longer do so themselves. It’s hard to imagine a position (the executor) of greater trust, a greater responsibility and, with that, a relationship that carries more influence over the affairs of the testator. We ignore executors at our peril.<\/p>\n
A November news item on the dangers of intestacy articulated the problem well, leading readers to consider practical solutions for their clients. Simply talking to clients won’t solve much when these clients consistently demonstrate a “don’t know, don’t care” attitude toward their own affairs after death. In surveys, 85% of Canadians said they either hadn’t even thought about their estates or they planned to leave less than $100,000 (Manulife Financial Corp.), yet the average net weighted home equity value of people aged 65 and over is $300,000 (Statistics Canada) and only 10% of another survey’s participants expect to encroach on their home equity in retirement (Bank of Montreal).<\/p>\n
Given that this demographic also owns considerable additional assets, the majority of seniors fall into one of two camps: they either don’t know what they’ll be leaving or they don’t care to know.<\/p>\n
By contrast, their executors have moral and legal obligations to ensure successful estate settlement, clearly do care about their responsibilities, want to talk about these matters and, by virtue of their appointment, as noted, are among the most trusted and influential members in their testator’s lives. Often, this testator is a parent. This situation is where the engagement needs to be to avoid intestacy.<\/p>\n
Another November story on the erosion of assets under management upon death similarly highlights another problem: 98% of heirs don’t intend to leave assets with their parent’s advisors. This article notes that the solution is to meet the client’s family if possible, and offer some suggestions (assuming this first hurdle was cleared).<\/p>\n
Achieving these goals raises the critical question of how to do so, as requesting a meeting with a client’s children or parents can come across as a sales gimmick.<\/p>\n
Alternatively, review consultations with a client’s testator(s) when the client is the appointed executor, or a client’s executors when the client is the testator parent, is regarded as thorough, caring and instrumental in a family’s success. Executors are the trusted conduit between testators and heirs.<\/p>\n
Advisors are well served by informing themselves about the details of advising executors. Guiding anyone on a topic with no knowledge of the subject is self-defeating when asking questions without being able to assess the answers.<\/p>\n
And, as crucial and valuable as the resulting information is, family executors often have no idea where to turn for help.<\/p>\n
Advisors who engage in these strategic relationships, and are armed with valuable and relevant information, will help Canadians avoid problems while protecting the advisor’s practice from the imminent erosion of assets.<\/p>\n
Mark O’Farrell, BA, CFP, CLU, ChFC, TEP, CEA, is president of the Canadian Institute of Certified Executor Advisors.<\/em><\/p>\n \u00a9 2015 Investment Executive. All rights reserved.<\/p>\n","protected":false},"excerpt":{"rendered":" Many family executors fail to appreciate the weight and complexity of the task. Advisors can help clients have these conversations<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[3013,3014],"tags":[3170],"yst_prominent_words":[],"acf":[],"_links":{"self":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/320906"}],"collection":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/comments?post=320906"}],"version-history":[{"count":1,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/320906\/revisions"}],"predecessor-version":[{"id":358821,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/posts\/320906\/revisions\/358821"}],"wp:attachment":[{"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/media?parent=320906"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/categories?post=320906"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/tags?post=320906"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/www.investmentexecutive.com\/wp-json\/wp\/v2\/yst_prominent_words?post=320906"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}