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Where there’s a Will there’s a Way Incorporation Estate Planning In To Your Practice By Kevin O’Brien, CFP.

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Presentation on theme: "Where there’s a Will there’s a Way Incorporation Estate Planning In To Your Practice By Kevin O’Brien, CFP."— Presentation transcript:

1 Where there’s a Will there’s a Way Incorporation Estate Planning In To Your Practice By Kevin O’Brien, CFP

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3 Before We Start Young couple on the way to the church to get married are involved in a horrific car accident. Young couple on the way to the church to get married are involved in a horrific car accident. Unfortunately neither survived the accident. Unfortunately neither survived the accident.

4 The Gates Of Heaven Both meet Saint Peter at the gates of Heaven and they ask Both meet Saint Peter at the gates of Heaven and they ask “Is it possible that we can get married in Heaven?” “Is it possible that we can get married in Heaven?”

5 He Did Not Know St Peter did not know the answer so he asks them to wait outside the gates until he can find out St Peter did not know the answer so he asks them to wait outside the gates until he can find out

6 The Couple Wait for what seems like an eternity During this time…. During this time…. They find out that they don’t have the same political views. They find out that they don’t have the same political views. They don’t agree on a number of key issues They don’t agree on a number of key issues They have some serious doubts!! They have some serious doubts!!

7 Finally Saint Peter Returns After 4 Months Of Searching I Have Found Your Answer After 4 Months Of Searching I Have Found Your Answer “Yes it is possible you Can Get Married In Heaven”!

8 The Couple Then Ask Saint Peter During the 4 months that you were gone…. During the 4 months that you were gone…. We realize we are not 100% compatible We realize we are not 100% compatible If Things Don’t Work Out Can We Get A Divorce In Heaven? If Things Don’t Work Out Can We Get A Divorce In Heaven?

9 Saint Peter’s Reaction Visibly Agitated Visibly Agitated Throws His Clip Board Throws His Clip Board Starts Pulling His Hair Starts Pulling His Hair Muttering Under His Breath. Muttering Under His Breath.

10 “It Took Me 4 Months Of Searching Heaven To Find A Priest” “It Will Take Me Forever To Find A Lawyer”!

11 Estate Planning & My Personal Experiences How I Embarked On My Career As A Financial Planner How I Embarked On My Career As A Financial Planner 1981 My Father’s Health Started to Fail 1981 My Father’s Health Started to Fail

12 When My Father Died Even Though My Father Was Sick For 5 Years We Were Not Prepared. Even Though My Father Was Sick For 5 Years We Were Not Prepared. No Discussion As To What Financial Assets He Had or Where They Were Located. No Discussion As To What Financial Assets He Had or Where They Were Located.

13 The Bank Mother –Was Not Prepared Mother –Was Not Prepared Personal Papers Disorganized Personal Papers Disorganized Had No Financial Knowledge Had No Financial Knowledge Ownership of Assets- Ownership of Assets- Only In Fathers Name Only In Fathers Name Safety Deposit Box Not Disclosed Safety Deposit Box Not Disclosed Confusion & Terminology Confusion & Terminology

14 Estate Frustration I Spent Months Trying To Understand The Statements I Spent Months Trying To Understand The Statements Nothing Had Ever Been Thrown Out. Nothing Had Ever Been Thrown Out. I Combed Through Sock Drawers, Files, Cardboard Boxes and Drawers of Papers I Combed Through Sock Drawers, Files, Cardboard Boxes and Drawers of Papers

15 In Reality I Was Performing The Duties Of An Executor I Was Performing The Duties Of An Executor I organized and Gathered All The Financial Assets Of the Estate I organized and Gathered All The Financial Assets Of the Estate I Educated Myself As Much As Possible I Educated Myself As Much As Possible

16 Notified The Bank The Bank Lawyer Lawyer Investment Companies Investment Companies Financial Advisor Financial Advisor Insurance Company Insurance Company Cancelled/Amended all Personal Contracts Cancelled/Amended all Personal Contracts

17 Despair & Realization The Bank- Gave Me The Wrong Information On Probate & Ownership The Bank- Gave Me The Wrong Information On Probate & Ownership The Lawyer Had Died- His Successor Was Not An Estate Lawyer The Lawyer Had Died- His Successor Was Not An Estate Lawyer Hired A Lawyer That Specialized in Estates Hired A Lawyer That Specialized in Estates The Financial Advisor :Was At Best A “Salesperson” The Financial Advisor :Was At Best A “Salesperson”

18 I was Determined To Help My Mother I Organized & Filed I Organized & Filed I Researched I Researched I Determined Course of Action I Determined Course of Action I Corrected The Bank- and Stood My Ground I Corrected The Bank- and Stood My Ground I Directed I Directed I Hired an Accountant I Hired an Accountant

19 And In The End It Took Me 9 Months It Took Me 9 Months I Succeeded In Finding The Right Answers I Succeeded In Finding The Right Answers Organized My Mothers Estate Organized My Mothers Estate I Hired The Right People I Hired The Right People It Cost Thousands of Dollars To Fix It Cost Thousands of Dollars To Fix

20 The Funny Part Is… The Bank informed us that my father had a safety deposit box. It Held: My Fathers Will, PA’s, Life Insurance and a Substantial Amount of Stock Certificates My Fathers Will, PA’s, Life Insurance and a Substantial Amount of Stock Certificates In My Mother’s Name. In My Mother’s Name.

21 Where Not To Keep Your Important Papers Not In A Bank Safety Deposit Box Not In A Bank Safety Deposit Box No access on weekends No access on weekends No access If not held Jointly No access If not held Jointly What An Un-necessary Burden We Put Upon Our Loved Ones What An Un-necessary Burden We Put Upon Our Loved Ones

22 The Shocker My own estate was set up wrong My own estate was set up wrong My financial paperwork was disorganized My financial paperwork was disorganized I had the wrong type of life insurance and I was under-insured I had the wrong type of life insurance and I was under-insured I had failed communicate our own situation to my spouse I had failed communicate our own situation to my spouse I actually enjoyed the work involved I actually enjoyed the work involved

23 I Went Back To School IFIC Course IFIC Course Insurance Course Insurance Course Sponsor Companies Courses Sponsor Companies Courses Sales Courses Sales Courses CFP Course CFP Course

24 You Would Think I Would Have Learned Something…..BUT May 1989 I Commenced On My Career As a Financial Planner May 1989 I Commenced On My Career As a Financial Planner Then My Older Brother Called Me Then My Older Brother Called Me Late September At 1.30am Late September At 1.30am Sales Job (commission) Sales Job (commission) No Assets No Assets No Credit (poor) No Credit (poor) No Mortgage (not Qualified) No Mortgage (not Qualified) CSV Life Insurance (cashed) CSV Life Insurance (cashed)

25 My Gut Told Me I was Doing Something Wrong I should have been more professional I should have been more professional I should have insisted that we meet immediately I should have insisted that we meet immediately I should have expressed my concern that he needed to have life insurance NOW I should have expressed my concern that he needed to have life insurance NOW I should have but I didn’t……………. I should have but I didn’t…………….

26 I Screwed Up My Brother Was Found Dead In A Hotel Room Oct 28 th (they figure he died the 26th) He Had Died On His Last Sales Trip Of An Aneurism My Brother Was Found Dead In A Hotel Room Oct 28 th (they figure he died the 26th) He Had Died On His Last Sales Trip Of An Aneurism He Was Only 47 He Was Only 47 He Left a Wife, a Son and a Financial Mess He Left a Wife, a Son and a Financial Mess

27 Let’s Talk You Should Be Initiating The Discussion You Should Be Initiating The Discussion With Your Clients With Your Clients You Will Be Surprised At What You Find You Will Be Surprised At What You Find Every Financial Planning Practice has Every Financial Planning Practice has Estate Horror Stories Estate Horror Stories

28 The Will That Never Was (Found 16 years later ) First Holiday Without Children First Holiday Without Children First Plane Trip (scared) First Plane Trip (scared) They Typed A Will They Typed A Will Guardian Chosen Had Died & Spouse had Remarried Guardian Chosen Had Died & Spouse had Remarried (They disliked the new spouse) (They disliked the new spouse) They Did Not Have A Valid Will They Did Not Have A Valid Will

29 Guardianship Considerations for Selecting Guardians Same Values Same Values The Means To Provide The Means To Provide Live Close By Live Close By Have Your Trust Have Your Trust Same Beliefs Same Beliefs Close To Your Age Close To Your Age Existing Children Existing Children Close Family Close Family

30 Once You Have Chosen Your Guardians Ask Them To Consider! Ask Them To Consider! Review Your Criteria With Them! Review Your Criteria With Them! Obtain Their Assurance! Obtain Their Assurance! Using The Same Criteria Pick Another Set Of Guardians As Alternatives! Using The Same Criteria Pick Another Set Of Guardians As Alternatives!

31 Last Minute Planning Holograph Will Holograph Will 1948 A Farmer Had An Accident He Was Impaled On A Shaft In His Field A Farmer Had An Accident He Was Impaled On A Shaft In His Field. Wrote In His Blood on Tractor Fender Wrote In His Blood on Tractor Fender “in case I die in this mess I leave it all to the wife” Cecil G Harris “in case I die in this mess I leave it all to the wife” Cecil G Harris

32 Choosing An Executor Primarily required to administer and wrap up the estate Primarily required to administer and wrap up the estate Gather up All Assets Gather up All Assets Make all Disbursements Including CRA Make all Disbursements Including CRA Share & distribute remaining assets with beneficiaries Share & distribute remaining assets with beneficiaries Be mentally capable to handle the job Be mentally capable to handle the job

33 Your Executor Should Be Trustworthy Trustworthy Be responsible Be responsible Be thorough Be thorough Someone that will outlive you Someone that will outlive you Be In Agreement with your wishes Be In Agreement with your wishes Understand what is required Understand what is required Have the time to focus on the task Have the time to focus on the task Be someone that you can communicate with Be someone that you can communicate with

34 Inform Your Executor The executor may be held liable for mistakes made in settling an estate Many people become overwhelmed by the responsibility and work required Compensation Is 2.5% of capital receipts and disbursements 2.5% of revenue receipts If the estate takes more than a year an additional 1% on the gross for management

35 Always Have Backup Using the same criteria pick an alternative executor Using the same criteria pick an alternative executor Never make the choice emotionally Never make the choice emotionally

36 Family Monsters That May Come Back & Haunt You! Mother with 4 Daughters Mother with 4 Daughters Will was marked up with changes Will was marked up with changes Depending on which daughter had gained or lost favour Depending on which daughter had gained or lost favour Will was contested on the grounds that the mother was mentally incompetent Will was contested on the grounds that the mother was mentally incompetent

37 The Siblings Mother had died Mother had died Left RPP payment via Life only Annuity Guaranteed for 15 years :$42,000 Per year X 14 years Left RPP payment via Life only Annuity Guaranteed for 15 years :$42,000 Per year X 14 years Left Open Account $ 300,000 Left Open Account $ 300,000 ½ of Home Worth $ 550,000 ½ of Home Worth $ 550,000

38 Greed & Not Need! The Siblings Wanted To Buy “Bill” Out Of The Home. The Siblings Wanted To Buy “Bill” Out Of The Home. They Wanted To Sell The House They Wanted To Sell The House Their Reasoning Was They Wanted The Full Value Of The Estate Now Their Reasoning Was They Wanted The Full Value Of The Estate Now

39 Through Questioning I Uncovered Bill and Mom Had Lived Common-Law For 15 Years Bill and Mom Had Lived Common-Law For 15 Years The Will Stated That Bill Had A Life Interest In Mother’s Half Of The Home The Will Stated That Bill Had A Life Interest In Mother’s Half Of The Home Bill Was The Beneficiary Of Mothers $400,000 Of Registered Accounts Bill Was The Beneficiary Of Mothers $400,000 Of Registered Accounts Bill And The Siblings Didn’t Get Along Very Well Bill And The Siblings Didn’t Get Along Very Well

40 My Advice – Tread Lightly Life interest in home and antaginizing Bill could bring negative result Life interest in home and antaginizing Bill could bring negative result The Pension Plan Paperwork did not have spousal consent The Pension Plan Paperwork did not have spousal consent There are potential tax consequences with having a non-spouse as beneficiary to Registered Plans There are potential tax consequences with having a non-spouse as beneficiary to Registered Plans

41 They Chose Not To Listen Bill Hired A Lawyer – Specialized in Estates Bill Hired A Lawyer – Specialized in Estates They lost their rights to the pension payments They lost their rights to the pension payments They now pay for ½ of all home expenses They now pay for ½ of all home expenses Bill intends on living in the home forever Bill intends on living in the home forever Bill Cashed in The Registered Accounts Bill Cashed in The Registered Accounts The siblings open account paid the taxes The siblings open account paid the taxes

42 If You Don’t Use A Lawyer That Specializes 98% of Wills are boiler plate text on a word program 98% of Wills are boiler plate text on a word program Look for errors Look for errors Look at spelling Look at spelling Most Wills could be finalized as you wait Most Wills could be finalized as you wait Have it “Explained” back to you in English Have it “Explained” back to you in English

43 Demographics The Same Forces That Built Your Practice May Be Taking it Away From You! The Same Forces That Built Your Practice May Be Taking it Away From You! The Leading Edge Of The Boomers Will Reach 59 Next Year! The Leading Edge Of The Boomers Will Reach 59 Next Year!

44 As The Population Changes We As Financial Planners Need To- We As Financial Planners Need To- Shift From: Shift From: Asset Gathering/ Accumulation Shift To: Shift To: Retirement Planning and Estate Planning Retirement Planning and Estate Planning

45 Adds Value to Your Practice Introduce Yourself to the Next Generation Introduce Yourself to the Next Generation Provides Clients With Value Added Service Provides Clients With Value Added Service Introduces You to Centres of Influence Introduces You to Centres of Influence

46 Introducing The Concept Provide A Service That Organizes & Centralizes Your Clients Important Estate Papers Provide A Service That Organizes & Centralizes Your Clients Important Estate Papers Provide A Fire Proof Box For Your Clients Provide A Fire Proof Box For Your Clients Develop A Full Net Worth Statement Develop A Full Net Worth Statement Ask Questions & KISS Ask Questions & KISS Review Wills & PA’s Review Wills & PA’s Develop The Estate Planning Team Concept Develop The Estate Planning Team Concept

47 The Lawyer Traditionally The Lawyer Comes First Traditionally The Lawyer Comes First That’s totally wrong! That’s totally wrong! Why should a client pay $ /hr to have trusts explained? Why should a client pay $ /hr to have trusts explained? Lawyer is brought in after the initial plan is formulated. Lawyer is brought in after the initial plan is formulated.

48 The Accountant Provide Useful Services Provide Useful Services Can be called on a regular basis Can be called on a regular basis Asset values and ACB’s revisions Asset values and ACB’s revisions Tax planning Tax planning

49 The Insurance Agent Life Insurance Life Insurance It’s A Hidden Gem It’s A Hidden Gem Important Asset Unique to Estate Planning Important Asset Unique to Estate Planning May Need Insurance Based Investment Products May Need Insurance Based Investment Products

50 Other Team Members Real Estate Evaluator Real Estate Evaluator Business Evaluator Business Evaluator Corporate Lawyer Corporate Lawyer Family Law Lawyer Family Law Lawyer Doctor Doctor Special Professionals Special Professionals

51 Your Role With The Estate Planning Team Quarterback Quarterback Provide Net Worth Report Provide Net Worth Report KISS (Keep it simple silly) KISS (Keep it simple silly) Delegate Delegate Implement and Follow up Implement and Follow up Review annually and update Review annually and update

52 Sometimes isn’t Fair Family Cottages Family Cottages Family Business Family Business Special Needs Children Special Needs Children Baa Baa Black Sheep Every family has one! Baa Baa Black Sheep Every family has one!

53 Chair Meetings Hold Strategy Meetings Without Clients Hold Strategy Meetings Without Clients Determine a course of action Determine a course of action Provide a Summary To The Team Members Provide a Summary To The Team Members

54 Remember Develop A Complete Net Worth (Starting Point) Develop A Complete Net Worth (Starting Point) Organize The Clients Papers (Billable service) Organize The Clients Papers (Billable service) Centralize Important Papers (Fire Proof Box) Centralize Important Papers (Fire Proof Box) Don’t Be Afraid of The Team Don’t Be Afraid of The Team You Know More Than They Do You Know More Than They Do Co-ordinate Their Efforts Co-ordinate Their Efforts Keep It Simple Keep It Simple

55 Where there’s a Will there’s a Way A Book that I wrote A Book that I wrote That’s easy to read and understand That’s easy to read and understand Organize and Simplify Your Clients Documents Organize and Simplify Your Clients Documents Educate Your Clients – Simplicity Educate Your Clients – Simplicity Duties Of An Executor Duties Of An Executor Probate Probate Trusts Trusts Charities Charities

56 Be There For Your Clients

57 Where there’s a Will there’s a Way $30 Canadian $30 Canadian Ideal way to introduce your clients to estate planning. Ideal way to introduce your clients to estate planning. Ideal way to introduce yourself to the next generation Ideal way to introduce yourself to the next generation Adds deep value to your practice Adds deep value to your practice


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