Today's article is a guest submission from Janine Guenther CFA, CMT, a Portfolio Manager and Senior Wealth Family Advisor with over 30 years of industry experience. The views presented here do not necessarily represent those of Bellwether Investment Management.
In this blog, I mostly speak to my generation—the sandwich one. We’re the ones looking forward to retirement, guiding our children toward better decisions, and helping our aging parents navigate the later stages of life. In this post, I want to discuss my experiences with Wills, Powers of Attorney, and letters of wishes and how they are important regardless of age, gender, or life circumstances.
Allow me to begin with a generalization—our excellent demographers have continued to tell us that women live longer than men. Because they are statistically more likely to die earlier, most men prefer not to discuss estate planning, as they would rather not waste their time worrying about something they won't live to see.
The sad reality is that this avoidance policy isn't an issue until it is. If the person in question is responsible for household finances and passes away without leaving behind a continuity plan, it can make an already stressful time even more demanding for the family.
I've found that a transparent discussion can be unimaginably helpful. Our firm recently hosted a webinar with best-selling author Tom Deans and his book, “The Happy Inheritor,” where he discusses a similar concept at length. If you are interested in the recording, you can find it here.
In real life, I have seen so much heartache and tragedy surrounding death and incapacitation. In turn, I've adapted my services to limit the fallout as best I can. I collaborate with my clients to establish emergency contingency plans—when nobody is left wondering where the funds are, who has access to them, and how they should be used, everyone is better off for it.
Here is a short, 6-item list showing why you need some planning.
1) Wealth Distribution: You've worked hard for your wealth; you should pass it on to your heirs how you would like to. While courts have their place, I'm sure we'd rather not see them dictate how your estate is dictated—without a Will, their word is bond.
2) Family Alignment. Telling your family ahead of time about how your legacy is going to play out can allow everyone peace of mind. Fewer financial uncertainties or concerns, perhaps unironically, lead to fewer family disputes.
3) Financial Security: Coming up with a long-term financial plan that is regularly updated to keep pace with your evolving needs will give you the confidence that you’ll be able to age in the style you prefer.
4) Tax Planning: Whether you have a business that you would like to sell or pass on, having a plan that includes how that will be done can save you unnecessary tax and legal expenses. You can apply the same logic to any major assets, such as your home, art collection, or investment portfolio.
5) Healthcare Decisions: Naming someone you trust to make healthcare decisions based on your preferences and directions when you can't is preferred by most people. Physical or mental incapacitation isn't a comforting thought, but remember—it's rarely too early to start planning, but it can often be too late.
6) Digital Footprint: Who is going to shut down your social media accounts? We have all received birthday notices for people we know have passed. This untimely reminder can be very upsetting for your family, for obvious reasons. It makes sense to have someone assigned to memorialize your social media footprint as well as clean up your reward points, digital subscriptions, and information.
When should we start this process? As soon as you are an adult.
Our kids go to post-secondary schooling in another province. We had them go through the process of preparing a Will and Power of Attorney for themselves. We did this so that we could still help as their parents in the event of an injury that did not allow them to act for themselves, and, in the unlikely event of their passing, we could manage an estate. This could be viewed as drastic, but I prefer to plan for the worst and hope for the best—it has yet to fail me.
I regularly meet potential clients who have more than a million in assets without a Will, Power of Attorney, or beneficiaries named on their registered accounts. These are the “own goals” of the wealth world. Each of these goals carries the potential to lead to excessive estate taxes, hinder access to funds when the injured person is unable to transact on their own, and delay the transfer of assets upon death.
When I ask if this has been done deliberately, nearly everyone says that they would never want to have this happen to their family. Many might find it simply inconvenient to get their documents in order, which is understandable, which is why our clients can receive a free Will and basic estate plan through Bellwether Estate and Insurance Services. It's so vitally important that we're willing to cover the initial costs ourselves.
In reality, though, it takes a small amount of time and effort to get started on a Will and Power of Attorney. There are many tools and services, online and in person, that, for basic situations, can cover you. If you haven’t found the opportunity to get it sorted out, it just takes one step to get started. Your family will thank you.
In the next blog, I’ll go over how to plan for spending your savings in retirement, which may include CPP, OAS, RRIFs, and pensions. I'll also discuss how to go about making a budget that fits your plans so that you won’t fear running out of money.
