before-its-too-late

When she reflects on a messy estate battle involving one of her clients, one Alberta lawyer says the family fight became so petty, that there was almost a sense of gallows humour about the situation.

The conflict began over the will, and ultimately resulted in decisions about the late client’s funeral being made hastily.

After the service, one relative went so far as to gripe about the way the deceased’s face had been made up. A gruesome thought, perhaps, but she says these types of showdowns offer a takeaway for people currently working on their estate plans: don’t foist funeral arrangements, and the expenses that accompany them, on your children and executors. “In this case,” she says, “some funeral instructions would really have been helpful.”

Many clients, especially younger ones, can be resistant to discussing some of the most basic tools of estate planning—life insurance policies, wills, personal directives and powers of attorney.

But it’s even harder to get people to talk about final expenses, even in situations where family members have agreed to come together to discuss the details of inheritances. “The burial question, cremation, and whether you want a headstone, what kind of funeral service you want—the first time it’s raised, it’s like throwing ice water into the conversation. It freezes; it stops,” the lawyer says.

But at some point it has to be discussed. And the majority of people actually do have a good sense for what they want. If you probe, she says, people will eventually offer the detailed instructions their heirs will need.

Warning

Many clients can be resistent to discussing final expenses.

Broaching the subject

“It’s always difficult to broach the topic of death with clients,” says Maureen Glenn, manager of tax and estate planning for Richardson GMP in Toronto.

To counter that unease, she asks clients to think about recent funerals they attended for family members or friends.

The majority of people are initially uncomfortable with any kind of discussion about their own funerals. Younger people, in particular, still think they’re going to live forever and avoid the subject. You can remind them an accidental death can occur at any time, but don’t expect too much uptake.

Not surprisingly, the conversation is easier with older and more financially secure clients. People in their late 40s and early 50s are more accepting of the fact that no one gets out of here alive. For this group, the subject can be broached during routine will reviews.

And while they’re unlikely to want to get into too much detail, an advisor can re-orient the client’s thinking by confronting them about the consequences to their heirs if they fail to plan.

By encouraging her clients to mentally itemize the components of those services, Glenn creates a new frame of reference and uses it to ease into a more personal discussion. This includes questions about the choice of service, the mode of interment (cremation or burial) and cultural considerations.

Those conversations also allow Glenn to go into detail about the emotional burden family members encounter if they have to make decisions after someone dies. Leaving them to guess is a burden, she notes, and it really is better for them if they have input from the person whose affairs they’re responsible for settling.

Payment options

Next, get clients to focus on the range of final expense options now available in the marketplace.

Pre-paid funerals are among the most common choices, and advisors say clients should expect to spend between $10,000 and $20,000—although the ultimate price will vary, depending on details like the size of the reception and cost of the cemetery plot.

“There’s a very strong sense of satisfaction [among clients when they pre-pay],” says Dan Burjoski, a Kitchener, Ont.-based insurance consultant with HollisWealth Insurance Agency. “[They say], ‘That’s done. I can check it off the list.’ ”

But clients still need to focus on the details of those pre-paid funerals. With providers asking for 25% to 50% of the cost up front, and most cemeteries demanding full payment prior to the service, the pre-pay option can cause cash-flow issues.

For example, some funeral homes, like Jennett Chapel in Barrie, Ont., offer plans that absorb inflation-driven price increases by investing the payments (which are often rendered years before the client dies) and using the asset growth as an offset.

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