Clients respond positively to “The Conversation” about wills and powers of attorney

By Susan Yellin | September 14 2015 09:00AM

The topic of wills and powers of attorney can be a touchy subject at the best of times. And while some advisors find that breaking the ice on “The Conversation” can ruffle some feathers, others say their clients are generally relieved that the topic has finally been broached.

“I would suggest that the vast majority of time the investors are waiting to hear a conversation about wills and powers of attorneys. They don’t know the answers and are absolutely in awe that we would facilitate this for them,” says Bob Challis, senior financial and estate planner with Nakamun Financial Solutions in Winnipeg. “I can’t believe the traction, from a business point of view, that that creates by proactively going after The Conversation, long before The Conversation is needed.”

Surveys show that more than half of adult Canadians do not have a signed will and most of those haven’t been updated. Even fewer people have powers of attorney. Experts say most Canadians do not realize that if they die without a will, it is generally left up to provincial regulations to decide who gets what – not a spouse or a child.

Challis, who holds his TEP, in addition to his CFP and RHU designations, says his clients are asked to fill out information when they first sign up with his firm outlining, among other things, whether they have a will, where it is and who has copies of it – a best practice recommended by the Investment Industry Association of Canada (IIAC). If these tasks have not been finished, he says they’re near the top of the to-do list.

Even if clients are not of the so-called retirement age, The Conversation about wills and powers of attorney is always triggered when his clients start receiving some kind of retirement income.

At that time, Challis asks his clients to bring to their next meeting the people named as the executor of their will and their powers of attorney, often a relative. When he is asked why they need to come in, Challis says he wants to talk to them because at some point the client may need them to step in to help with their financial affairs.

“By that point, most able-bodied people have had some experience with contemporaries, seniors, siblings or a parent … and they can immediately empathize with what I’m saying.”

Often a family meeting is arranged, including the named executor and powers of attorney. Challis says he puts together a net worth distribution document of the client household in front of everyone, which then becomes the agenda for further discussions. He leads the talk by asking the executor and powers of attorney if they understand their responsibilities, creating the opportunity for discussions of an even broader range.

Untapped area

Challis says there are not many people in the marketplace filling the role of facilitating The Conversation. “It’s a huge untapped area. The referrals that we get because of that constantly blow my mind.”

Jeanette Brox, CFP and senior financial consultant with Investors Group in Toronto, has been working with families for over two decades and considers it part of her responsibilities as a financial advisor to get The Conversation moving.

Like Challis, her emphasis is on having the talk about wills and powers of attorney with the family as a whole, especially since many of her clients come to her as family groups. “I have a lot of families where we’ll all sit down together and meet with the client and family members. In my case, lots of the time, everyone is a client, so everyone is on board.”

Often times when the advisor recognizes that the health of the client might be compromising their financial health, Brox suggests to the client that it might be time to bring in someone else to help.

“I will say to the client: we have a lot of things to look after as time goes on and things are becoming more complicated…so at the next meeting, I would like to have your daughter here to go over a few things. Most people are in agreement,” she says.

Sometimes, Brox’s clients get insulted when it’s suggested it may be time to bring in the power of attorney for a meeting. “So I get the family together with the person who is thinking about power of attorney and say to them: let’s be prepared. Let’s make a list of the regular financial obligations that need to be paid – making sure you have the fixed expenses paid and allowing for other expenses.”

She said many people misunderstand the power of attorney and think it’s a will or a living will.

Challis says advisors and their clients need to know that there are various levels of authority in powers of attorney, which can vary from province to province. However, generally speaking there are four main kinds of powers of attorney:

  • General power of attorney in which case the person named can do anything of a financial nature without limitation;
  • Specific or limited power of attorney allows the person named to carry out specific duties, for example, it may allow a person to deal with paying the client’s bills, but not allow the person to deal with investments with the client’s financial advisor;
  • “Springing” power of attorney of either a general or limited power of attorney does just what it says – it springs into force on certain conditions or events;
  • Enduring power of attorney is likely to be general in scope and is in force until the client’s death, at which time the executor takes over.