The Importance of Estate Planning: 5 Essential Questions for Wealth Advisors and Their Clients

Estate planning is a crucial aspect of securing your financial future and ensuring your wishes are carried out after your passing. However, recent survey results reveal that many Canadian wealth advisor clients may be underestimating the importance of maintaining an updated estate plan. In this blog post, we will discuss the significance of estate planning and provide five essential questions that wealth advisors should ask their clients to generate interest in revisiting their estate plan.

Estate planning involves creating a strategy to manage and distribute your assets after your death. It is a vital aspect of personal finance, ensuring that your wealth is transferred to your loved ones as efficiently as possible. However, in a recent series of webinars, we surveyed 1,850 Canadian wealth advisor clients. The results highlight a lack of understanding of the importance of properly maintaining an estate plan over time.

While 83% of respondents claimed to have an up-to-date will and POA, only 33% stated they had a comprehensive estate plan. However, after attending a short educational webinar on the topic, 80% of them saw the need to review their estate plan. We believe this highlights the importance of educating clients about the need for proper estate planning and ensuring that their estate plan is updated when significant changes happen in their lives or that of their heirs.

5 Questions Wealth Advisors Should Ask Clients to Generate Interest in Revisiting Their Estate Plan:

1. Have you, your spouse, your beneficiaries, or your executor experienced any significant life changes since you last updated your estate plan?

Life events, such as a change in financial circumstances, a move, a marriage, a divorce, a birth, or the death of a beneficiary, can significantly impact your estate plan. People often overlook how changes in your heirs’ situation can affect your plan.

2. Have you reviewed your beneficiary designations recently?

Beneficiary designations on insurance policies, retirement accounts, and other financial assets may override the provisions in your will. It is essential to review these designations to ensure they are consistent with your overall estate plan.

3. Are there any changes in tax laws that may affect your estate plan?

Tax laws change frequently, and these changes can impact the effectiveness of your estate plan. It is crucial to stay informed about any changes in tax laws and consult with a professional to make necessary updates to your plan.

4. Have you considered the potential impact of long-term care on your estate plan?

Long-term care expenses can significantly deplete your assets and affect your estate plan. It is essential to discuss long-term care insurance and other planning options with your wealth advisor to ensure your estate plan is prepared for this possibility.

5. Have you established a plan for digital assets?

Digital assets, such as online bank accounts, social media profiles, and cryptocurrency, are becoming increasingly important. It is essential to include these assets in your estate plan and ensure that your loved ones have access to them after your death.

Estate planning is a critical component of securing your financial future and ensuring that your loved ones are taken care of after your passing. However, many people underestimate the need to maintain their estate plan due to a lack of understanding of the factors that can impact it. By asking these five essential questions, wealth advisors can help generate interest in revisiting their clients’ estate plans and ensure they are up-to-date and effective in achieving their intended goals.