Estate planning is essential but often overlooked. Having a will drafted by a professional is important at every age because it allows clients to distribute assets as they wish. It also serves as the cornerstone of their overall estate plan, which includes choosing an executor and preparing power of attorney documents for healthcare and property.
It’s smart to review clients’ wills at least every five years or after a life-changing event, like the birth of a child or a marriage or separation. While making updates, remember also to review their designated beneficiaries on life insurance and registered accounts such as RRSPs.
Here are five tips to keep in mind when it comes to estate planning:
- Consult a professional.
Clients might think that downloading a template online or buying a “do it yourself” kit will do the job, but it’s better to get the advice of trusted professional. Advising clients to work with an estate planning lawyer can help ensure they account for the “What if?” scenarios.
- Talk about what clients want.
The biggest mistake a lot of people make is keeping their will a secret. Communication with heirs is very important because it helps give heirs an understanding of the background and reasoning behind clients’ decisions. While these conversations can be uncomfortable and emotional, it’s easier for everyone involved if they know what to expect and what clients’ wishes are. It’s a much calmer discussion when done on their terms, rather than leaving it to when clients or their loved ones are in crisis mode.
- Create an inventory of client assets.
It doesn’t take long for their assets to look like a jigsaw puzzle to their executor or power of attorney. Create a list of their insurance, investments, banking information, pensions, workplace RRSPs and savings. Help clients organize and record their medical records, tax documents, financial statements, and banking and credit card information to help ensure nothing is overlooked. It’s a good idea to include an inventory of their digital assets as well, such as social media accounts and websites. Let heirs know where they can find these records.
- Choose clients’ executors carefully.
It’s a big job that requires time, proximity and expertise. The appointment of an executor is not to be taken lightly. Make sure you work with clients to think it through. Talk to potential executors about the responsibilities to ensure they’re on board and speak to their lawyer about the suitability of their choice.
- Blended families call for a custom estate plan.
A second marriage calls for even more care and consideration in constructing an estate plan. Make sure that clients’ spouses and family members are aware of their decisions and that their assets are protected.
No matter what clients’ circumstances are, speaking to a qualified professional can help them and their families find peace of mind. Having a clearly articulated and communicated estate plan can also help avoid heartache and costly mistakes later on.
A solution to consider
Guaranteed investment funds (GIFs), also called segregated funds, can help clients with their estate planning in the accumulation years and early in their retirement. They can provide traditional insurance advantages, including named beneficiary options, potential creditor protection and probate avoidance, as well as helping clients protect and grow their money:
100% death benefit guarantee
The death benefit paid will be the greater of the death benefit guarantee or the current market value.
Control over legacy settlement
Clients’ assets are distributed according to their wishes, with options to allocate money directly to a beneficiary through a lump sum or a non-commutable payout annuity.
Estate values are automatically locked in annually, so if the market value is higher than the previous guaranteed amount, a client’s death benefit has nowhere to go but up.
Diverse leading fund companies
Clients can hold up to 100% in equity funds and choose from approximately 55 funds. By investing in these funds, clients can benefit from the investment expertise of leading global portfolio managers.
- What to do now? A reference guide for your executor – booklet to make it easier for clients’ heirs and executors to find important documents and information.
- Estate planning guide: A guide for business owners – one in a series of planning guides that Sun Life Financial has developed on subjects of interest to business owners.
- The advisor website Sun Life GIFs contains product information, fund performance, tools, videos and other resources about guaranteed investment funds.
- Contact a member of your Sun Life wealth sales support team to learn more about legacy, retirement, tax and financial planning, and intergenerational wealth transfers.