Canadians are unprepared for the so-called Great Transfer of Wealth, most of whom will leave their estates to untrained relatives to decipher when they should be looking to a certified executor advisor, the Independent Financial Brokers (IFB) summit was told May 11.

Mark O’Farrell, president of the Canadian Institute of Certified Executor Advisor, said about 70 per cent of Canadians don’t have a current or valid will and haven’t given much thought to their estate. Even though many people are sitting in homes worth more than $500,000, some 85 per cent don’t think they have an estate issue to worry about.

As it now stands, some 98 per cent of Canadians appoint a family member as their executor – despite how complex and how risky this job has become, said O’Farrell. “We still see it as a DIY job that our kids can handle,” he said. “Canadians are going to need our help big time.”

But the pandemic, which has taken thousands of lives, has changed the urgency of how people think, live and communicate when it comes to their estates, he said. 

People want to ensure that their estate is “well prepared,” but exactly what those words mean to the average person varies.

Parents and older relatives who leave their estates for adult children to work through might be doing both themselves and their estates a disservice, he said. “Can you imagine a greater placement of trust and responsibility? No. Executors are the most trusted and influential people in testators’ lives.” 

Professionally trained executors, said O’Farrell, have a vested interest in facilitating discussions. They are responsible for settling estates, are trusted and influential and they want to talk to people writing up their wills. 

Manulife Private Wealth says 32 per cent of high-net-worth Canadians say they fear how their heirs will handle their inheritance, and 36 per cent say their children don't have the financial literacy to manage a potential windfall.

“This is massive, this is a very serious risk,” said O’Farrell. But he said it can be mitigated by engaging with the executors in the practice of their current advisor. These experts can reach out to their older clients and move their assets to the advisor’s practice. Then when there is the transfer to heirs, those assets will come back to the current advisor. “So it’s an incredible business plan. It’s also a great business succession plan,” he said, noting this can help the advisor build their book rather than eroding it.

The CEA designation can be used as an add-on designation for CFPs or CPAs, demonstrating specialized knowledge in this field. 

Properly trained executors care about successful estate settlement, said O’Farrell, making sure there is a financial plan and that credit cards are paid up, for example.