This unprecedented time of social distancing, home confinement and concern for our communities has had a positive side-effect. The phones have been ringing in the offices of legal and financial professionals who specialize in getting people’s affairs in order. The slow-motion nature of the COVID-19 crisis gave most people the time and the contemplation for considering the important things in life, including what happens at the end.
The legal community and the financial community are reporting spikes of interest in some particular departments like wills and estate planning, stock market and mutual fund investments, and tax consulting. All three are tied together in one key area: end-of-life planning.
Roberta Stewart is a partner at HSJ Lawyers in Prince George. Her areas of expertise include wills and powers of attorney so it’s her desk to which many of these inquiries are referred, coming in from all over northern BC. She said the callers are not reaching out due to worry, but more to do with prudence.
“The conversations themselves aren’t really any different than before, and maybe they’ve had COVID-19 on their minds and that’s why they picked up the phone, but whenever you talk about the arrangements for the event of your death or incapacitation, that is a very practical conversation,” Stewart said, in a news release.
No doubt COVID-19 is on the minds of the callers, even if only subliminally. HSJ experienced about a 30 per cent uptick in estate planning inquiries during the first 12 weeks of the isolation period.
There was also a noticeable rise in inquiries with Prince George investment advisor Dean Rolufs at CIBC Wood Gundy. People were interested in the latest information on how their stocks and other holdings were faring in this unprecedented market moment.
When estate planning is under consideration, so too is your personal financial picture, so Rolufs is often looped into that discussion whether it starts with a lawyer over an up-to-date will or if the first call comes through his office.
“We talk deeply about what’s going on in your life and what’s going on with your family members,” Rolufs said. “All of that affects everything else. Especially right now with Covid-19, there are fears, a lot of question marks, and they touch on sensitive subjects. If you were my client, I might well know more about you than some of your other family members, and that’s ok, that’s the way it is for good reason, our relationship has to go to those places of knowing, deep conversations, so we can truly understand the picture and design the right plan for you. We have to be really transparent about these things because if you just leave it in a state where the family doesn’t know, then all of a sudden you pass away, the person who has to deal with your estate not only has to grieve but also put up with this process. Transparency is key.”
Taxes are never anyone’s favourite topic, but they can represent a particularly nasty surprise for your beneficiaries if your affairs are not in proper order at the time of your passing or incapacitation. Miranda Paterson is a corporate tax specialist and partner at DMC Chartered Professional Accountants. She also serves on the Prince George Estate Planning Council. She has seen it happen where the easiest of planning would have spared a lot of burdensome work and a lot of money for those left behind.
“Even a simple estate can be complicated by the mistake of not doing the planning in advance,” Paterson said. “It’s not looking out for your loved ones, or all the years you’ve spent to build those assets, if you leave things unplanned and you end up in a situation like double estate tax and your beneficiaries have to pay the bill by selling off assets you intended to leave them as a legacy.”
Paterson said a few simple conversations is all it takes to ward off those potentially hefty tax consequences or to just make life easier for the people left behind who have to try to figure out your intentions. Leaving a map of your final wishes is easy to do, and one of the most critical points on that map is taxation.
Sometimes people leave a will bequeathing RRSP savings and other investments to a certain person, but on the paperwork for those accounts there is another name listed as beneficiary. Under law, the will takes second place in those instances, even if it is newer than the investment documents. Paterson said it takes a specialist to spot those mix-ups before it’s too late.
“I think people are sometimes afraid to talk to professionals and I don’t think you should be. It’s important to get the proper advice because we are here to help,” she said.
Stewart agreed that too many times she has seen administrative heartache heaped upon the grief of losing a loved one, simply because plans were not made in advance or incorrect assumptions were made about how the law allows assets to be passed from one generation to the next.
“It costs so little to see a professional and get everything in order compared to how much it can cost your estate when it gets tied up in legalities you didn’t know about or things weren’t legally clear at the time of your passing,” said Stewart. “Wills even have to be signed in a certain way in order to be legally valid. It is typically the people you love the most who end up paying the biggest price for plans that weren’t made properly or at all. Litigation costs a lot more than good planning.”
As a very rudimentary guideline, if you do not know (without googling) exactly what each of these terms means in law, you should see an estate lawyer as soon as possible: Grant of Probate, Will, Enduring Power of Attorney, Health Care and Personal Care, Representation Agreement. If you did google them, you may have received information from another Province, so again, contact an estate planning professional as soon as possible for the correct legal interpretations.
The wise advice is to not delay and do not try to tiptoe around the law by assuming an inert, unresponsive item like so-called “will kits” can do the trick.
These wills-in-a-box are sold at common retail stores but they do not usually contain the legalities for your local jurisdiction. Estate law varies widely from province to province, if the will kit is even printed in Canada. The kits certainly can’t keep up with ever-changing legislation and case-law and they cannot understand the nuances of your personal world of family dynamics, business interests, retirement arrangements, and other unique circumstances – things you may not ever realize yourself but professionals are trained to pick up. A single mistake in the way a will kit is completed could create numerous problems.
“It can mean that your final wishes are not carried out,” said Stewart. “These things are too important to leave to that kind of chance. We are here to help you design your plans so it all goes according to your intentions and things don’t get caught up in court and hidden costs and tax implications that maybe you didn’t even know about.”
Rolufs completely echoed Stewart’s concerns over not knowing the rules. He has filtered out important mistakes for a number of his past clients, enough to know that most people don’t intuitively know what they can and cannot do to pass their assets on.
“Someone might want to do something to prepare for passing but they might not know that there are rules associated with that idea that will not allow certain things,” he said. “It’s a whole discovery process. That’s the biggest part for someone in my position: the discovery of you, your intentions, and your wishes beyond the grave.”
There are also your wishes for the hopefully ample time you have left. The process of getting your affairs in order doesn’t just leave a clear map for when you pass on, it also charts a course for you yourself to follow confidently into the future. The process will clarify your available assets, put you in the best tax position, and establish a solid foundation for issues like investments and insurance. It can help you live your happiest years knowing what you have for yourself and what will become of it all.
The consequences of dying unprepared are sometimes severe for those already in grief over your passing. At the very least it can be harder than it should be for the executor of your will. Whether you begin with a call to your accountant or your lawyer or your investment advisor, the point they all stress is to make that first call to one of them and get the ball rolling, and they will all join the conversation when it’s their turn.
Each one of them underlined in the strongest terms that the process is easier than most people realize. They also stressed that instead of sad or frightening conversations, these planning sessions usually turn out to be wonderful trips down memory lane and enjoyable acts of love – perfect antidotes to the COVID-19 confinement we’ve all be experiencing together.