WEALTH MANAGEMENT – LEANNE KAUFMAN
By Leanne Kaufman
Estate planning conversations are difficult. We don’t want to think about our loved ones passing, and we don’t like to speak of our own potential incapacity or demise. Money, too, can be a taboo topic. It’s no wonder many families avoid these kinds of conversations altogether. (This won’t be an issue with my kids. They already hear more about all of this than they will ever care to know!)
When wishes are left unexpressed, all sorts of issues can arise. Without an estate plan, including basic documents like a Will and powers of attorney, there’s no way of ensuring that wishes will be carried out—particularly philanthropic intent. And without a conversation about what is in those documents, beneficiaries (or those who thought they would be beneficiaries) can find themselves disappointed, aggrieved, and possibly acrimonious, leading to ill feelings and poor relations at an already emotional time when their loved one dies and they understand the estate plan for the first time.
Canadians shy away from preparing their estate plans and wills
According to an RBC Royal Trust survey in 2022, 66 percent of Canadians between ages 35 and 54 do not have a will—and it’s not because people aren’t aware they need one. Indeed, more than half of those surveyed indicated that not having a will may result in their wishes being unknown, and 56 percent acknowledged that it can lead to family disharmony about inheritances.
So how do we encourage our clients to both discuss and document their wishes? It requires open dialogue with both trusted advisors, and the family or friends who are impacted.
Estate planning conversations with trusted networks
It goes without saying that a fulsome estate plan requires consultations with professionals like wealth advisors, lawyers and accountants. These are all trusted sources who can educate and offer advice to ensure estate plans are actionable and achieve the goals the clients express.
It is also imperative that clients be encouraged to make itemized lists of assets and liabilities. In addition to property, cars and investments, we recommend they also think about heirlooms, art and items that hold sentimental value, and the ever-increasing digital assets. With a visual representation, it can often be easier to imagine how to bequeath an inheritance.
Above all else, we talk about the importance of creating a Will and powers of attorney (or their provincial equivalent)—one for personal care and one for property. We know having these in place can bring peace of mind, and without them, final wishes may not be carried out as planned, particularly philanthropic goals.
Making hard conversations easier
As challenging as making an estate plan can be, speaking with friends and family about those plans can be even more difficult. We work to empower our clients to have these challenging conversations and often we say a good time to talk is when all the family is gathered together. While the holidays may feel too festive to talk about estate planning, when philanthropic intent is part of one’s estate plan, the generous spirit of the season may actually offer a natural opportunity to share these intentions with loved ones.
When someone decides to speak with their family about their estate plan, they may feel overwhelmed and unsure of what to include and what to keep private. It’s a deeply personal choice, but if there will be any surprises or anyone may be disappointed with the contents of the documents, it may ease their emotions when they have time to understand the planning well in advance. This is particularly true if a significant portion of the estate is going to philanthropic intent rather than to loved ones.
Many families may be involved in philanthropy together. When this is the case, the discussion about charitable donations will often be an extension of conversations that they’ve already had. In any case, the donor should seek to bring their family and friends into their reasoning so they understand the significance of the gift.
For many, the holidays are a time for togetherness, good will, and sharing our abundance with others. What better time for families to share their plans for long term legacies of giving with those they love.
Leanne Kaufman is President and CEO of RBC Royal Trust and writes this column for Foundation Magazine. RBC Royal Trust and RBC Wealth Management are business segments of the Royal Bank of Canada. Please click this link www.rbc.com/legal/https://www.rbc.com/legal/ for further information on the entities that are member companies of RBC Wealth Management. The Companies and the Royal Bank of Canada do not endorse or recommend any information, content or services offered on any third party website. The content in this publication is provided for general information only and is not intended to provide any advice or endorse/recommend the content contained in the publication. ®/TM Trademark(s) of Royal Bank of Canada. RBC and Royal Trust are registered trademarks of Royal Bank of Canada. Used under license. © Royal Bank of Canada 2024. All rights reserved.
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