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Estate Planning for Single Women: CHOOSE Your Estate Planning Advisor

Estate planning for the single female at any age or relationship status has some unique elements that require particular attention. As well, the now aging baby boomers represent a significant demographic cohort in the population both in terms of the absolute number of individuals and total wealth under control. Women are the future of Canadian estate planning and single women will increasingly be making most of the decisions about wealth transition.

In this series of articles, I will examine some specific areas of consideration for single females planning their estates including:

  • Do A Will!!
  • CHOOSE an Estate Planning Lawyer
  • CHOOSE Your Estate Trustee
  • Powers of Attorney are Very, Very Important
  • Planning for Your Heirs & Beneficiaries
  • Building Your Advisory Team
  • Incorporate the Long View In Your Planning

CHOOSE an Estate Planning Lawyer

Estate planning isn’t simpler just because you are single. In fact, it may be more complicated to ensure your goals and objectives are properly achieved. In Ontario, many other areas of law impact on estate planning including family, tax, corporate, cross border and trusts. Work with an estate planning lawyer who has expertise in all facets of estate planning (or is part of team that can provide those technical skills) to help you in the process. The Law Society of Ontario certifies some lawyers as Trust and Estate Specialists or seek out practitioners with additional designations such as a TEP from the Society of Trust and Estate Practitioners (STEP).  

I highlight the word “CHOOSE” in capitals for very very specific effect. This is a choice you make and it is every bit as vital as the other choices you will make in the estate planning process. Choosing is a very intentional act. It suggests you have decided what is important to you in your planning and estate process. Have you made any effort to decide what is actually important to you in an advisor? Most people don’t and simply choose based on referral or fees.

Consider my previous post “I’m single, do I really need a will?…..Yes!” – in that post, I review some of the things you my wish to achieve that will not happen if you don’t have will. Do any of those choices resonate with your planning? How will your advisor assist you in achieving those outcomes? What added value do they bring? Is that a skill or value set worth looking for in an advisor. Almost certainly the answer is…YES!

We tend to default to people we trust. Malcom Gladwell has a new book out entirely on this form of decision making. It’s useful and we should be thankful we choose on trust or nothing would ever be achieved. However, before we get to that point, before allowing trust to take over, consider having a checklist of key skills or values that must be confirmed before you engage your advisor.

Here are some questions you may wish to consider as you build your personal list of advisor assessment questions:

  • “Describe the last conference you attended that wasn’t purely technical in nature and what was the attraction to that conference?”
  • “In respect of the previous question, how have you integrated the learning from that continuing education into your estate planning practice?”
  • “In addition to your professional (legal) credentials, what other credentials or training have you obtained that has broadened your perspective and skill sets in estate planning?”
  • “What is the process you use to bring purpose into client planning?”
  • “I am worried about blind spots and biases I may have in my decision making. Please describe how you’re process helps to reduce my risk of making these mistakes?”
  • “Can you share an example with me where you engaged the rising generation in your client planning to maximize successful outcomes?”
  • “What is your process for keeping me updated on changes in the law and thought leadership in planning that may be relevant to my evolving situation?”

This is a very small possible list. There are many added questions you can insert to bring real value to your process. It is essential that you be engaged as a client and become an advocate for your own planning. I discuss this in my book under the process of the “Abundant Estate”.

We live in an age of credentials and these can help ascertain the added training (in addition to experience) that has been obtained. As noted above, some provinces and states have certification programmes for specialization in estate planning or trusts. Check the appropriate law society/bar association webpage in your area to see what lawyers have these certifications. In Ontario, estate and trust certified specialists are here. There are many other certifications including a TEP designation from the Society of Trust and Estate Practitioners (STEP).

This is a sampling for the lawyer that will draft the legal documents you need to achieve your planning goals. There are other advisors that may be in the planning circle as well, including:

  • Tax advisors to help you minimize the tax cost of the estate plan after you have identified and explored your key objectives;
  • Investment advisors and counsellors to discuss the integration of your plan goals into your financial structure;
  • Business transition advisors and Family Enterprise Advisors (FEA) to help transition family business assets and minimize conflict;
  • Insurance professionals to help you bridge the liquidity gaps created by your current situation and where your planning will take you;
  • Private and commercial bankers to assist with funding and leverage opportunities to transition assets from generation to the next;
  • Mediators and facilitators to help you succeed in family governance and decision making;
  • Conflict resolution experts to manage family or situational dynamics that are volatile.

There are other professionals that may be needed to achieve the planning outcomes. Choosing those advisors requires every bit as much intentionality as choosing the estate planning lawyer. This is why understanding your strategic goals and values from the outset is so very critical to achieve planning and advisory alignment.

In the next of this series, I take a look at CHOOSING Your Estate Trustee...more capitals….now you know why, it’s really, really important.

Chris Delaney, B.A., LL.B., B.Ed., TEP, FEA is a Professional Keynote Speaker and author of “The Naked Opus: Growing Your Family Wealth for the Long Term” (2018). His next book “Twenty Estate Planning Mistakes Everybody Makes” is due in Spring, 2020.

The scenarios created in this article are fictional and meant for illustration only. Any similarity to any person is purely a coincidence. The suggestions and considerations in this piece are intended for general information. Your specific situation will be unique and every reader should consult with their own estate planning professionals including lawyers, accountants, insurance professionals and financial advisors for advice on which they can rely to achieve their specific estate planning goals. Not intended as legal or tax advice.

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Estate Planning for Single Women

Estate Planning and the Single Woman
Fall, 2019

In the romantic novel “The Notebook”, author Nicholas Sparks chronicles an everlasting romance in which young, naive hearts grow old together. As the story concludes, the elderly couple affectionately reminisce on a lifetime spent at each other’s side. It is a storybook ending when they pass away together in the same room. Unfortunately, the reality for most married Canadian women is that they will become widowed by their fifty-sixth birthdays. In excess of 40% of Canadians over the age of sixty-five are single. The vast majority of this total, over 85%, are single because of a spouse’s death, divorce or separation. Since women generally live longer than men, the majority of these singles over the age of sixty-five will be female in the coming years.

Estate Planning is a Process….NOT an Event

It is a common myth that only married people with young children or the very wealthy need to estate plan. Moreover, the focus of single’s planning is often that they only need to create a framework for substituted decision making in the event of death or incapacity. This viewpoint is an overly narrow view of the actual process of estate planning as an event rather than an ongoing process. Traditionally, only tactical tools such as wills, powers of attorney and life insurance were considered to combat estate shrinkage caused by various taxes at death or to ensure decision-making continuity over asset control. However estate planning is a long term, strategic process that demands attention to values, vision and purpose as well as to tactical considerations about plan execution. This is ideal for female decision makers as they tend towards solutions that are longer-term and achieve broader strategic goals for their heirs or philanthropy.

Estate planning for the single female at any age or relationship status has some unique elements that require particular attention. As well, the now aging baby boomers represent a significant demographic cohort in the population both in terms of the absolute number of individuals and total wealth under control. Women are the future of Canadian estate planning and single women will increasingly be making most of the decisions about wealth transition. And it will be substantial with almost $1.5 trillion being transferred over the coming two decades.

This Series of Articles:

In this series of articles, I will examine some specific areas of consideration for single females planning their estates including:

  • I’m single, do I really need a will?……..Yes!
  • CHOOSE an Estate Planning Lawyer
  • CHOOSE Your Estate Trustee
  • Powers of Attorney are Very, Very Important
  • Planning for Your Heirs & Beneficiaries
  • Building Your Advisory Team
  • Incorporate the Long View In Your Planning

I’m single, do I really need a will?……Yes!

In 2018, an Ipsos Reid poll revealed that 50% of all adult Canadians did not have a will. Of those who did, another 15% had wills that were badly outdated. If you are an adult female you should have a will. The alternative to dying with a will is called dying intestate. An intestacy means the relevant provincial legislation will make all the important decisions for your estate. It is a common misunderstanding that the default regime is basically what most people do in their wills (if they had done one). In reality, it isn’t even close. For example, absent other planning, beneficiary designations or shared ownership, in an intestate estate distribution:

  • If you wanted to give to a charity at death they will not be considered;
  • If you wanted to care for a parent or sibling with some of the estate assets this will not likely be achieved;
  • If you have a common law or same sex partner they may not be treated as a spouse and their property and support rights may be quite limited;
  • If you have minor children you will not be able to choose and direct their guardianship;
  • If you have friends you wanted to make gifts to at death this will not happen;
  • If you had an adult step-child or grandchildren you wanted to specifically include in the estate this will likely not happen;
  • If you were concerned that loved ones and heirs would be unprepared to receive wealth or damaged by the inheritance you have lost the ability to manage that risk;
  • If you wanted privacy the estate will now be a Court case open to the public;
  • If you wanted control over beneficiary access to capital and income this will not occur as most statutory beneficiaries will receive their full entitlement when they turn eighteen;
  • If you wanted to choose the person or team to administer the estate this will not happen;
  • If you wanted to preserve some or all of the financial wealth to invest into the social, human and intellectual capital of your family in a long-term strategic manner, this will not happen

This is just a partial list of negative outcomes. It is difficult to overstate the importance of a will to a single person. Are any one of these outcomes important to you and your estate planning? If they are, consult with an estate planning lawyer to fulfil your abundant estate goals and do a will.

In my next post in this series – CHOOSE an Estate Planning Lawyer

Chris Delaney, B.A., LL.B., B.Ed., TEP, FEA is a Professional Keynote Speaker and author of “The Naked Opus: Growing Your Family Wealth for the Long Term” (2018). His next book “Twenty Estate Planning Mistakes Everybody Makes” is due in Spring, 2020.

The scenarios created in this article are fictional and meant for illustration only. Any similarity to any person is purely a coincidence. The suggestions and considerations in this piece are intended for general information. Your specific situation will be unique and every reader should consult with their own estate planning professionals including lawyers, accountants, insurance professionals and financial advisors for advice on which they can rely to achieve their specific estate planning goals. Not intended as legal or tax advice.

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Five Steps to Grow Family Wealth for the Long Term: Part 1

Long term family wealth preservation has never been more important. Low interest rates, slow wage growth, economic dislocation and disruptive innovation are making capital preservation more vital than ever. Avoiding wealth entropy is a critical imperative for the high net worth client and their advisors. Using a purposeful and long-term approach to sustaining and growing all sources of family wealth will preserve the family’s bounty for generations to come. It takes effort, a thoughtful guide and time. It will be worth every bit of time and treasure to create your own abundant estate.

 

I recently authored a two part series on Advisor.ca entitled Five Steps to Grow Family Wealth for the Long Term: Part 1

Chris Delaney, B.A., LL.B., B.Ed., TEP, FEA is the Author of “The Naked Opus: Growing Your Family Wealth for the Long Term”. He is a Professional Speaker, Lawyer and Family Wealth Strategist focussing on helping families and their advisors grow true family wealth for the long term.

He can be reached on twitter @FEAdvisor and @NakedOpus. Please also visit www.nakedopus.com for additional contact information.

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Five Steps to Growing Your Family Wealth for the Long Term: Part 2

Intergenerational wealth planning is a process, not an event. It takes time, effort and resources to construct capacity to grow and sustain wealth across generations. Process teaches the next generations to appreciate the sources of their family wealth and how it was earned and created. It is not merely a series a meetings that results in a document followed by no further interaction. It is a dynamic and intergenerational process that is constantly writing and rewriting the family wealth script.

This is fundamentally a long-term approach to the wealth as “patient capital”. It requires a long view of the sources, purpose and potential of the family wealth. Effective communication, regular family meetings, an understanding of shared family values and goals, and some system of decision-making are important requirements.

A growth-oriented mindset is a strategic mindset. Create a process designed to reveal your family’s goals and objectives and successful strategies and tactics will follow. In “The Naked Opus: Growing Your Family Wealth for the Long Term” I identify the SMRT strategic engine. After creating a family mission statement, a good process might include:

  • Success in the achievement of the mission is made possible by identifying key personal and family goals;
  • Meaning is brought to goals by setting clear objectives to break the big goals down into smaller, achievable steps;
  • Recipes for action are established when strategies are created to achieve the objectives;
  • Things that will be done to execute on the strategy are tactics.

Too often, estate planning starts and finishes with the things that will be done before any consideration has been give to what success will look like and how meaning will be brought to the plan. The cart is truly in front of the horse.

I recently published a second article in Advisor.ca entitled “Five Steps to Growing Your Family wealth for the Long Term: Part 2″. I hope you enjoy the piece.

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Four Reasons Intergenerational Wealth is Destroyed in Three Generations

I recently posted an article on Advisor.ca entitled “Four Reason Intergenerational Wealth is Destroyed in Three Generations”. Here is the link to that article.

More information is available in “The Naked Opus: Growing Your Family Wealth for the LongTerm” available in single copies or e-book at Chapters/Indigo, Amazon.ca and Amazon.com

 

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Six Things About Millennials That Could Damage Your Estate Plan

Millennials and Intergenerational Wealth Transfer

Family members who became adults around the turn of the century in 2000 are Millennials. Today, these people are fast approaching their fortieth birthdays and their parents, typically, are entering their late-60s and early-70s. Millennials are the “next” generation when it comes to intergenerational wealth planning. They are also the ascendant and rising group in family enterprise business transitions. Successful family wealth succession (or transition) demands an understanding of their disposition, needs and goals.

Millennials are often characterized by a lack of institutional loyalty or attachment. They also tend to transition and change their employment on a more frequent basis than their parents and grandparents would ever have dreamed. In fact, a recent report from Gallup Inc. suggested there were six major functional changes ahead in relation to the disruptive influences Millennials would have in the future. Understanding some of these changes will help make purposeful intergenerational wealth planning more successful.

The changes summarized in the report were:

1. They don’t just work for a paycheque – Millennials seek purpose;
2. They are pursuing personal development over job satisfaction;
3. They don’t want bosses or people that tell them what to do – they want coaches;
4. In employment, they don’t want annual reviews but instead prefer authentic and regular conversations;
5. Work is not simply a job, it is an expression of life choices and purposes;
6. Millennials are less interested in shoring up weaknesses than they are in developing their strengths.

This latter observation was identified as the most profound in the survey. The authors state “Gallup has discovered that weaknesses never develop into strengths, while strengths develop infinitely.”

Consider this conclusion in the context of your own estate planning or business continuity planning. Many people consider wills with incentive clauses to encourage the development of better behaviour around money management, relationship choices or career and education commitment. This research suggests that is the wrong approach and that, instead, you should be focussing on the strengths of the inheritor and investing in those qualities.

Investing in the strengths of a person, while being mindful of their weaknesses, is effective and purposeful estate planning. However, it is a rare estate plan that features strategies and tactics coordinated on the investment of the strengths of the family’s human capital. Yet, it is well understood that investing in the human, social and intellectual capital of the inheritor and the family in general is the greatest purpose for financial capital. It is also a key method of ensuring that financial and other sources of family wealth are able to survive into the third generation and avoid the old adage “shirtsleeves to shirtsleeves in three generations”.

I will address more of these findings in later posts. However, it is worth noting that every one of them highlights the transition from top down “do as I say” approaches to more collaborative and holistic methodologies and processes. This also has fundamental implications for all planners including philanthropic gift planners, insurance agents, private bankers, lawyers, financial advisors, family business consultants and accountants. Relationship management will be about taking the time to truly understand core values, develop mission direction and a strategic intergenerational wealth plan based on purpose.

Chris is the author of “The Naked Opus: Growing Your Family Wealth for the Long Term”. It will be available in Chapters/Indigo on August 24 and elsewhere soon after. For speaking, facilitation and more information visit www.nakedopus.com

 

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How to Avoid Shirtsleeves to Shirtsleeves in Three Generations with Family Wealth

Most estate planning virtually guarantees your family wealth will be destroyed before it can transit to the third generation of your family. The familiar adage “shirtsleeves to shirtsleeves in three generations” is as true for intergenerational family wealth transfer as it is for business families. The first generation creates wealth, the second stewards it and the third squanders it with frequently sad outcomes for the loved ones.

The causes of wealth destruction are deeply rooted in how we view our family’s true sources of wealth, the amount of effort we exert and methodology we use to plan our estates and the communication practices within our families. We also plan only with the short-term in mind and ignore the powerful, dynamic intergenerational forces that are fundamental to long-term wealth succession.

Understanding that financial wealth is a servant of other sources of family wealth is critical to developing strategic plans that will ensure family wealth survives across many generations.

The other sources of family wealth wealth include a family’s intellectual, social and human capital. Once these are identified they can be invested in and grown from one generation to the next. This purposeful investment of financial capital creates a virtuous circle of family wealth stewardship, entrepreneurship and legacy

What do we mean by intellectual, social and human capital?

It takes effort to identify these sources of family wealth is a ket step in strategic intergenerational wealth planning.

 

The Naked Opus: Growing Your Family Wealth for the Long Term suggests a five step process for growing family wealth for the long term. It’s a flexible model that can be manipulated and retooled to fit the authentic planning needs of every family.

It starts with communication and values, builds towards alignment around mission and features The Abundant Estate with the SMRT strategic engine for family wealth decision making.

Chris Delaney, B.A., LL.B., B.Ed., TEP, FEA is the Author of “The Naked Opus: Growing Your Family Wealth for the Long Term”. He is a Professional Speaker, Lawyer and Family Wealth Strategist focussing on helping families and their advisors grow true family wealth for the long term.

He can be reached on twitter @FEAdvisor and @NakedOpus. Please also visit www.nakedopus.com for additional contact information

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Grow Family Wealth: 5 Things Advisors Can Do to Succeed

 

The intergenerational wealth of a family is at risk unless an advisor understands the causes of the “shirtsleeves to shirtsleeves” experience that destroys wealth by the third generation. We will explore all of these various causes in a series of separate blogs but, for now, here are five top things that advisors can do to grow a client family’s wealth for the long term:

  1. Adopt an Abundance Mentality;
  2. Take a close look at the process you have for your clients. Try to take the client’s perspective and ask yourself “who is this process really serving, ME or the CLIENTS?
  3. Examine your circle of allied professionals and ask yourself the same question- “How do we function as a multidisciplinary team to serve our clients?” ;
  4. Identify your top 20 client relationships – take 11-20 and ask “What do I really know about these clients and what their planning goals really are? Be fierce about discovering their true motivations!!
  5. Create a strategic process intergenerational wealth planning model for your clients – start at values and goals then proceed to tactics

Let’s examine each one a little more closely.

Adopt An Abundance Mentality:

The fact is that most advisors and their clients view the world through a lens of scarcity. It’s human nature and we all do it unless we have carefully designed processes to improve our decision-making analysis. Advisors fear losing clients or the wealth of a client while clients fear losing their financial wealth more than they are able to focus on it’s abundant, long-term potential. In fact, as Daniel Kahneman and Amos Tversky suggested with Prospect Theory, most people substantially fear a loss over a similarly sized gain. Fearing loss results in stilted and tunnel-visioned planning that misses the opportunity for growth and abundance in client estate planning.

Instead of the tunnel vision of scarcity, advisors should help clients develop a decision making process that features the abundant estate potential of every financial situation. We should ask, “where are the opportunities to invest in and grow our family’s human, social and intellectual capital?”.

Whose Needs Does My Process Serve?

Checklists are an incredibly useful tool to ensure that the essential steps of a critical process are followed. They remind us of small and key steps that can easily be forgotten. However, checklists and best practices are usually prepared by the advisor and applied generically to every client. The perspective of the checklist is that of the advisor. It is often a process of ticking boxes to protect the advisor’s interests.

Ask yourself some basic checklist testing questions:

  1. What is going on that has brought the client here today?
  2. What questions would a client ask of me but which are not on this checklist?
  3. What could go wrong in this situation which isn’t revealed by the answers to the questions on my checklist?
  4. What assumptions and beliefs not revealed from the checklist, if proven incorrect, will destroy this plan?
  5. Have you dug in deep enough? Did you dig in at all? Did you ask fierce and difficult questions that tend to be uncomfortable but which create planning breakthroughs as the client’s real needs and fears are finally exposed?
  6. Did you ever veer from the checklist or best practice out of curiousity?

Remember, a good checklist is not the end of the discovery, it is just the beginning. And, a best practice for a family is only the one that is best for them.

My Multidisciplinary Team

Clients, especially the high net worth, are expecting and receiving integrated multidisciplinary experiences from their advisory teams. The rise of single and multi-family offices is a testament to the truly aligned potential of an advisory team. It works very well for everyone involved. In fact, research suggests that advisors experience increased business through a commitment to engaged team collaboration.

Building your own team or developing your skills at being a collaborative and a high functioning team member is, in part, about adopting an abundance mentality and enhancing your processes to respond to authentic client needs.

Build From Within

Your best clients are the ones you already have on board. They chose you and have stayed with you through the great moments and the trying times. Have you made any effort to discover the real reasons for their loyalty and commitment? Why did they choose you? What is your value proposition with every client you manage and advise? Is it a commodity or is it strategic?

Understanding your own goals and values is essential to building connectivity across the generations of family wealth. Clients will understand the importance of planning for their family wealth as a values-driven process if you can explain your own mission in life and work. The law of attraction suggests that referrals will be better and your multidisciplinary professional team will be deeper and stronger if your purpose is at the core of your abundant-minded business model.

Build this process out onto your clients starting with your bench. Typically, your top clients are already likely to get your most frequent and regular attention. The next tier, maybe 11-20, are still part of your pareto-efficient book analysis for future growth and value. Create a new, authentic and purposeful process for them to help with their intergenerational decision making in all aspects of their family wealth.

Build a Process for Helping Your Clients Grow Their Intergenerational Wealth

The Naked Opus: Growing Your Family Wealth for the Long Term suggests a five step process for growing family wealth for the long term. It’s a flexible model that can be manipulated and retooled to fit the authentic planning needs of every family.

It starts with communication and values, builds towards alignment around mission and features The Abundant Estate with the SMRT strategic engine for family wealth decision making.

Chris Delaney, B.A., LL.B., B.Ed., TEP, FEA is the Author of “The Naked Opus: Growing Your Family Wealth for the Long Term”. He is a Professional Speaker, Lawyer and Family Wealth Strategist focussing on helping families and their advisors grow true family wealth for the long term.

He can be reached on twitter @FEAdvisor and @NakedOpus. Please also visit www.nakedopus.com for additional contact information.

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Collaboration and Communication Are Vital:

The dynamics of intergenerational wealth planning require communication capability to effectively share values, goals and objectives. Every family communicates but often not regularly or very well. Purposeful family meetings, sometimes facilitated, will create skills in the family so that authentic strategies and effective tactics can be developed by their skilled advisors.

Professional advisors that function in a collaborative manner with other trusted advisors will enjoy a planning synergy that further enhances the long term sustainability of the wealth. Smart collaboration means an estate planning lawyer, tax advisor, insurance professional, investment professional and family wealth strategist/family enterprise advisor that can work together towards the best interests of their common client.