Where theres a Will theres a Way Incorporation
- Slides: 57
Where there’s a Will there’s a Way Incorporation Estate Planning In To Your Practice By Kevin O’Brien, CFP
Before We Start • Young couple on the way to the church to get married are involved in a horrific car accident. • Unfortunately neither survived the accident.
The Gates Of Heaven • Both meet Saint Peter at the gates of Heaven and they ask “Is it possible that we can get married in Heaven? ”
He Did Not Know • St Peter did not know the answer so he asks them to wait outside the gates until he can find out
The Couple Wait for what seems like an eternity • During this time…. • They find out that • • they don’t have the same political views. They don’t agree on a number of key issues They have some serious doubts!!
Finally Saint Peter Returns • After 4 Months Of Searching I Have Found Your Answer “Yes it is possible you Can Get Married In Heaven”!
The Couple Then Ask Saint Peter • During the 4 months • • that you were gone…. We realize we are not 100% compatible If Things Don’t Work Out Can We Get A Divorce In Heaven?
Saint Peter’s Reaction • Visibly Agitated • Throws His Clip Board • Starts Pulling His Hair • Muttering Under His Breath.
“It Took Me 4 Months Of Searching Heaven To Find A Priest” “It Will Take Me Forever To Find A Lawyer”!
Estate Planning & My Personal Experiences • How I Embarked On My Career As A Financial Planner • 1981 My Father’s Health Started to Fail
When My Father Died • Even Though My Father Was Sick For 5 Years • We Were Not Prepared. No Discussion As To What Financial Assets He Had or Where They Were Located.
The Bank • Mother –Was Not Prepared • Personal Papers Disorganized • Had No Financial Knowledge • Ownership of Assets • • Only In Fathers Name Safety Deposit Box Not Disclosed Confusion & Terminology
Estate Frustration • I Spent Months Trying To Understand The Statements • Nothing Had Ever Been Thrown Out. • I Combed Through Sock Drawers, Files, Cardboard Boxes and Drawers of Papers
In Reality • I Was Performing The Duties Of An Executor • I organized and Gathered All The Financial Assets Of the Estate • I Educated Myself As Much As Possible
Notified • The Bank • Lawyer • Investment Companies • Financial Advisor • Insurance Company • Cancelled/Amended all Personal Contracts
Despair & Realization • The Bank- Gave Me The Wrong Information On Probate & Ownership • The Lawyer Had Died- His Successor Was Not An Estate Lawyer • Hired A Lawyer That Specialized in Estates • The Financial Advisor : Was At Best A “Salesperson”
I was Determined To Help My Mother • I Organized & Filed • I Researched • I Determined Course of Action • I Corrected The Bank- and Stood My Ground • I Directed • I Hired an Accountant
• I Succeeded In Finding The Right Answers And In The • Organized My Mothers Estate End • I Hired The Right People • It Cost Thousands of Dollars To Fix
The Funny Part Is… The Bank informed us that my father had a safety deposit box. It Held: My Fathers Will, PA’s, Life Insurance and a Substantial Amount of Stock Certificates In My Mother’s Name.
Where Not To Keep Your Important Papers • Not In A Bank Safety Deposit Box • No access on weekends • No access If not held Jointly What An Un-necessary Burden We Put Upon Our Loved Ones
The Shocker • My own estate was set up wrong • My financial paperwork was disorganized • I had the wrong type of life insurance and I was under-insured • I had failed communicate our own situation to my spouse • I actually enjoyed the work involved
I Went Back To School • IFIC Course • Insurance Course • Sponsor Companies Courses • Sales Courses • CFP Course
You Would Think I Would Have Learned Something…. . BUT • May 1989 I Commenced On My Career As a Financial Planner Then My Older Brother Called Me Late September At 1. 30 am • • • Sales Job (commission) No Assets No Credit (poor) No Mortgage (not Qualified) CSV Life Insurance (cashed)
My Gut Told Me I was Doing Something Wrong • I should have been more professional • I should have insisted that we meet immediately • I should have expressed my concern that he needed to have life insurance NOW • I should have but I didn’t…………….
• My Brother Was Found Dead In A Hotel Room th (they figure he died the 26 th) I Screwed Up he died the 26 th) He Oct 28 th (they figure Had Died On His Last Sales Trip Of An Aneurism • He Was Only 47 • He Left a Wife, a Son and a Financial Mess
Let’s Talk You Should Be Initiating The Discussion With Your Clients You Will Be Surprised At What You Find Every Financial Planning Practice has Estate Horror Stories
The Will That Never Was (Found 16 years later ) • • First Holiday Without Children First Plane Trip (scared) They Typed A Will Guardian Chosen Had Died & Spouse had Remarried (They disliked the new spouse) They Did Not Have A Valid Will
Guardianship Considerations for Selecting Guardians • Same Values • The Means To Provide • Live Close By • Have Your Trust • Same Beliefs • Close To Your Age • Existing Children • Close Family
Once You Have Chosen Your Guardians • Ask Them To Consider! • Review Your Criteria With Them! • Obtain Their Assurance! • Using The Same Criteria Pick Another Set Of Guardians As Alternatives!
Last Minute Planning • Holograph Will • 1948 A Farmer Had An • • Accident He Was Impaled On A Shaft In His Field. Wrote In His Blood on Tractor Fender “in case I die in this mess I leave it all to the wife” Cecil G Harris
Choosing An Executor • Primarily required to administer and wrap up the estate • Gather up All Assets • Make all Disbursements Including CRA • Share & distribute remaining assets with beneficiaries • Be mentally capable to handle the job
Your Executor Should Be • Trustworthy • Be responsible • Be thorough • Someone that will outlive you • Be In Agreement with your wishes • Understand what is required • Have the time to focus on the task • Be someone that you can communicate with
Inform Your Executor • The executor may be held liable for mistakes • • made in settling an estate Many people become overwhelmed by the responsibility and work required Compensation Is 2. 5% of capital receipts and disbursements 2. 5% of revenue receipts If the estate takes more than a year an additional 1% on the gross for management
Always Have Backup • Using the same criteria pick an alternative executor • Never make the choice emotionally
Family Monsters That May Come Back & Haunt You! • Mother with 4 Daughters • Will was marked up with • • changes Depending on which daughter had gained or lost favour Will was contested on the grounds that the mother was mentally incompetent
The Siblings • Mother had died • Left RPP payment via Life only Annuity Guaranteed for 15 years : $42, 000 Per year X 14 years • Left Open Account $ 300, 000 • ½ of Home Worth $ 550, 000
Greed & Not Need! • The Siblings Wanted To Buy “Bill” Out Of The Home. • They Wanted To Sell The House • Their Reasoning Was They Wanted The Full Value Of The Estate Now
Through Questioning I Uncovered • Bill and Mom Had Lived Common-Law For 15 Years • The Will Stated That Bill Had A Life Interest In Mother’s Half Of The Home • Bill Was The Beneficiary Of Mothers $400, 000 Of Registered Accounts • Bill And The Siblings Didn’t Get Along Very Well
My Advice – Tread Lightly • Life interest in home and • • antaginizing Bill could bring negative result The Pension Plan Paperwork did not have spousal consent There are potential tax consequences with having a non-spouse as beneficiary to Registered Plans
They Chose Not To Listen • Bill Hired A Lawyer – Specialized in Estates • They lost their rights to the pension payments • They now pay for ½ of all home expenses • Bill intends on living in the home forever • Bill Cashed in The Registered Accounts • The siblings open account paid the taxes
If You Don’t Use A Lawyer That Specializes • 98% of Wills are boiler plate text on a word program • Look for errors • Look at spelling • Most Wills could be finalized as you wait • Have it “Explained” back to you in English
Demographics • The Same Forces That Built Your Practice May Be Taking it Away From You! • The Leading Edge Of The Boomers Will Reach 59 Next Year!
As The Population Changes • We As Financial Planners Need To. Shift From: Asset Gathering/ Accumulation • Shift To: Retirement Planning and Estate Planning
Adds Value to Your Practice • Introduce Yourself to the Next Generation • Provides Clients With Value Added Service • Introduces You to Centres of Influence
Introducing The Concept • Provide A Service That Organizes & Centralizes Your Clients Important Estate Papers • Provide A Fire Proof Box For Your Clients • Develop A Full Net Worth Statement • Ask Questions & KISS • Review Wills & PA’s • Develop The Estate Planning Team Concept
The Lawyer • Traditionally The Lawyer Comes First • That’s totally wrong! • Why should a client pay $300 -600/hr to have trusts explained? Lawyer is brought in after the initial plan is formulated.
The Accountant • Provide Useful Services • Can be called on a regular basis • Asset values and ACB’s revisions • Tax planning
The Insurance Agent • Life Insurance • It’s A Hidden Gem • Important Asset Unique to Estate Planning • May Need Insurance Based Investment Products
Other Team Members • Real Estate Evaluator • Business Evaluator • Corporate Lawyer • Family Lawyer • Doctor • Special Professionals
Your Role With The Estate Planning • Quarterback Team • Provide Net Worth Report • KISS (Keep it simple silly) • Delegate • Implement and Follow up • Review annually and update
Sometimes 50 -50 isn’t Fair • Family Cottages • Family Business • Special Needs Children • Baa Black Sheep Every family has one!
Chair Meetings • Hold Strategy Meetings Without Clients • Determine a course of action • Provide a Summary To The Team Members
Remember • Develop A Complete Net Worth (Starting Point) • Organize The Clients Papers (Billable service) • Centralize Important Papers (Fire Proof Box) • Don’t Be Afraid of The Team • You Know More Than They Do • Co-ordinate Their Efforts • Keep It Simple
Where there’s a Will there’s a Way • A Book that I wrote • That’s easy to read and understand • Organize and Simplify Your Clients Documents • Educate Your Clients – Simplicity • Duties Of An Executor • Probate • Trusts • Charities
Be There For Your Clients
Where there’s a Will there’s a Way • $30 Canadian • Ideal way to introduce • • your clients to estate planning. Ideal way to introduce yourself to the next generation Adds deep value to your practice
