Money for Life consists of 5 key needs-based conversations at each life stage to help clients plan to achieve their financial goals. In the final part of this 5-part series, we’ll take a closer look at how Canadians feel about their legacy and how you can help clients fulfil their final wishes.

How do your clients want to be remembered? Do they want to make sure their loved ones aren’t burdened with final expenses, taxes, debt and legal battles? Do they want to leave a financial gift behind? Do they want to create memories while they’re alive, such as taking the family on a trip or funding a registered education savings plan for a grandchild? Or would they rather leave it all to a favourite charity?

According to a Sun Life Financial CARP survey,1 when it comes to legacy goals:

  • 38% of those surveyed want to make sure that when they die, they won’t be a burden on their family,
  • 32% want to make sure they have access to the money they need to create memories with friends and family or to achieve a significant accomplishment while they’re still alive,
  • 22% want to leave a planned financial gift to loved ones, and
  • 8% want to leave a planned financial gift to a charity.

Why plan a legacy?

The survey shows most people don’t want to leave the burden of debt or final expenses on their loved ones. But without a plan in place, these final expenses could have a big financial impact on their loved ones. There are many final costs to consider:

  • Funeral expenses, which can average $10,0002
  • Probate fees – these vary by province and assets
  • Taxes – these can also vary by province and assets
  • Executor fees that vary between 2.5 to 5% of the client’s estate3
  • Legal and accounting fees
  • Debt repayment

These costs can add up and eat at a client’s legacy – debt and taxes in particular. For example, the average consumer debt (excluding mortgages) held by Canadians in the first quarter of 2015 rose 2.9%, from $20,320 to $20,910.4 Debt can include mortgages, credit cards, car loans, lines of credit and more. Creditors will seek payment from the estate before beneficiaries have access to it, reducing or depleting the value of the estate.

Taxes can also take a significant chunk out of an estate. When a client dies, the estate is responsible for covering the applicable taxes. For example, half of the capital gains on assets such as a cottage or vacation property are taxable. If a client purchased a cottage for $100,000 and it’s now valued at $200,000, $50,000 from the increase in value is taxable, amounting to a tax bill of up to $27,0005 upon their death.

Building for the future – Career builders and younger families.

Getting ready for retirement – Those who are about 10 to 15 years from retiring.

In retirement – Those who are going to retire in the next year, are ready to convert retirement savings into income, or are already retired.

Proper planning can help reduce the impact of these on a legacy. Whether their legacy goal is to avoid leaving a financial burden on their family, create living memories or leave a financial gift, clients will want to have a legacy plan in place to ensure their wishes are realized the way they intended.

Everyone’s legacy wishes will be different but with careful planning and your help, your clients can leave the legacy they want – and it all starts with a conversation.

Starting the conversation

Understanding clients’ legacy needs can help you have a conversation about how to plan for their final expenses and wishes, and present the right solutions at each life stage – helping you deepen relationships with clients and build new relationships with their heirs. These conversations offer an opportunity to provide continuity for your business by retaining assets under management.

As you discuss legacy needs with clients, consider the following:

Building for the future Getting ready for retirement In retirement
Clients who are building for the future are typically making large purchases, like buying a house or car. It’s important that clients have enough insurance in place to cover these increasing debts if they die unexpectedly. For example, life insurance can help protect the family’s lifestyle and their ability to pay for basic living needs, and cover debts and final expenses. Help clients who are getting ready for retirement by protecting their income during their highest earning years. This is also a good time to identify their legacy goals and explore insurance solutions. It’s important to get insurance in place while they are insurable. It may also be time to consider long term care insurance to help protect retirement income and legacy plans against future costs of care. Clients in this life stage are more focused on protecting their assets. Help clients in retirement by having an extensive legacy conversation to identify what’s really important to them and help them articulate the kind of legacy they want to leave behind. Strategies including permanent life insurance can help protect a legacy and maximize the estate. Consider bringing any adult children into the conversation. This ensures they’re aware of their parents’ legacy plans and provides an opportunity for you to build a relationship with the family.

By having these conversations with clients, you’ll help them understand the importance of planning, determine how they want to be remembered, prepare their families and heirs, and have peace of mind knowing their estate is organized.

Get continuing education (CE) credits – take the legacy needs course

Available on Sun Life Financial’s Education Hub, you can take the Money for Life – Legacy needs course and earn CE credits. During this 1-hour, self-study course, you’ll learn more about:

  • how Canadians feel about legacy planning (or leaving a legacy at all),
  • how you can connect with clients to discuss how they want to be remembered, and
  • possible life, health and wealth solutions for clients at each life stage.

For more information about Money for Life and legacy needs, visit where you’ll find tools and resources to help you get started. If you have any questions, please contact your Sun Life sales team.

Money for Life – Sun Life Financial’s customized approach to financial and retirement planning – offers a conversation framework to help clients talk about their short- and long-term goals, and get them thinking about how their needs will change over time. Supported by a suite of tools and resources, this approach can help you have conversations and present the right mix of life, health and wealth solutions.

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1 Sun Life Financial, e-blast survey of over 1,700 CARP members aged 45 and over, September 2013. Over 56% of respondents were 65 years old and older, while 70.4% were retired and 14.2% of all respondents were within five years of retirement.

2 John Demont, “It costs a lot to die in Nova Scotia, survey says,” The Chronicle Herald, September 5, 2012. Average cost of a funeral in Nova Scotia, based on a 2012 survey by Everest.

3 Executor fees of 2.5-5%: based on various provincial guidelines, generally 2.5-5%.

4 Canadian Consumer Credit Trends, Equifax Analytical Services, 2015.

5 Based on a combined federal/provincial tax rate of 54% in Nova Scotia, the highest in the country for 2016.