Financial planner speaks out on gaps in clients’ financial-planning picture, and why wills are non-negotiable even for simple cases
While estate planning should be a core component of any individual’s financial planning puzzle, it’s something that remains woefully unaddressed by too many clients and advisors, says one financial planning professional.
“It’s a foundational part of financial planning that really needs to be looked at,” says Brenda Hiscock, a financial planner at Objective Financial Partners in Ontario. “But many clients, and even advisors, miss out on doing this.”
According to a 2023 survey report from IG Wealth Management, only a quarter of Canadians have an estate plan that lays out what should happen to their assets in the event of death or cognitive decline.
As of 2022, the Canadian population included around 7.3 million adults aged 65 years and older, including roughly 13,500 centenarians, according to Statistics Canada. And at least one estimate has it that around one fifth of Canadians will be over 65 years old by the end of this year.
Yet only 21% of Canadians polled by IG Wealth have had detailed discussions with the beneficiaries of their estate or executors of their will. And even though a will should be treated as a living document, only a third of the respondents said they update theirs after major life events like buying a first home, having a child, marriage, or a significant health change.
“The simple fact is people don't want to talk about their mortality,” Hiscock says. “But once they do the work of estate planning, everyone down to the last person always tells me what a relief it is that they did.”
One all-too-common gap, Hiscock says, involves drafting a will. While not every client is inclined to get one, she believes they’re a must for every adult given the risks and unknowns of death. Someone with life insurance, for example, would still need a will to pass on their personal possessions or, in the case of parents, name a guardian to take care of their minor children in case the worst happens.
Recent survey research from Willful and Angus Reid found that 97% of Canadian parents with minor-age children agreed that making a will is important, but just 46% actually have one. Among parents aged 45 and above, nearly three fifths (58%) have set up a will, while only 37% of parents between 18 and 34 years old have done so.
The likelihood of having a will in place appeared to also drop with income, the survey found. In that study, parents with household incomes above $100,000 were more than twice as likely to have a will than those with a household income below $50,000 (53% vs. 21%, respectively).
“Even if your situation is very simple, having a will ensures your wishes will be met under any circumstances,” Hiscock says.
As part of her practice, Hiscock works with numerous expatriate clients who own assets outside of Canada, live outside Canada, or have beneficiaries or executors that reside outside the country. Those geographical complications, she says, only adds to the challenge.
“Even when clients own assets or have beneficiaries that reside in different provinces, it creates additional complexity to the estate planning,” she says. “Many people don’t seem to be aware of that.”
For simple situations, Hiscock says online will services could help fill gaps in people’s estate planning. But for more complex cases – those involving cross-border clients or blended families, for example – she strongly recommends that people look beyond online platforms.
“In those cases, you want to be dealing with a professional,” she says. “If you're in doubt, I think it's important to speak to your financial planner to discuss the various options to determine the best path forward.”
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