Category Archives: Estate Planning

Ethical Wills: An important part of a Legacy & LegacyTracker

 

The results of a 2012 Allianz Life Insurance Study may surprise you. 86% of Baby boomers (age 47-66) &  74 % of elders (age 72+) agree that family stories are the most important aspect of their legacy, ahead of personal possessions (64 % for boomers, 58% for elders) and the expectation of inheritance for financial well-being           (9% for boomers, 14% for elders).

These results do not vary greatly from their study of 2005, that indicated that family values and life lessons were indeed the most important part of legacy before financial assets. That study outlined the 4 pillars of legacy as being 1) Values and Life lessons 2) Personal Possessions of emotional value 3) Wishes and Directions to be fulfilled and 4) Financial Assets/Real Estate

An ethical will captures the non financial part of a legacy. which make for, alongside the financial assets leaving a legacy as opposed to an Inheritance. Ethical Wills are the intangible form of a legacy that can make a real difference to heirs and that’s perhaps why they are being talked about more often in recent years as part of overall wealth transfer planning. An ethical will is not legally binding or enforceable as opposed to a will or living will; it is more concerned with the sharing of principles, values , life lessons, family histories and guidelines that an individuals may want to be pass along to heirs. It can be an informal letter or a long autobiography or a book, or even a video.

A good read on the subject is by Susan Turnbull of Personal Legacy Advisors in her book, The Wealth of your Life: A step by step guide for creating your ethical will.  Ms. Turnbull’s book provides an introduction to the concept of an ethical will and lays out a 5-step path for creating a written document or recording.  Her website is also a valuable resource

From Ms. Turnbull:

“It is a heartfelt expression of what truly matters most in the client’s life….Whether a client actually creates an ethical will or not, it is a measure of value of recommending one…An ethical will opens a door for an advisor to start a bigger conversation about estate planning”

It seems reasonable that Financial Advisors who open up conversations about ethical wills may find that they are then able to better serve the next generation of their existing clients. It provides an opportunity to reach out to that next generation and reduce the risk that comes with the unprecedented intergenerational wealth transfer that has already started while doing “Good” for clients.

Overall, I think most of us understand, that we are all worth more than the money we leave behind and that’s why we have included a place for Ethical Wills inside LegacyTracker

Connect with us to find out about all of the important parts included in LegacyTracker

Here’s a sample and some additional information in the form of FAQ from John Kador’s article on Ethical Wills from wealthmanagement.org 

ethical-faq

ethical-exercises

Perfect Storm Challenges and Solutions

We think there’s a perfect storm coming in the financial services market with challenges being faced by both consumers and the providers they deal with. ….LegacyTracker can help 

Too extreme? Maybe

We’ve been collecting some evidence in the form of published surveys, research & articles for quite some time. We think all of that reading and collecting has paid off. We think there’s a lot of evidence to support the need for LegacyTracker which is our personal financial management tool . This is an ongoing list in no particular order from our growing collection of supporting surveys, articles and research. Note: George Clooney did not help with this project; he was busy filming the Perfect Storm among his many other activities.

From Digital Insight: The  88% of consumers who now pay bills and transfer funds online, 62% would like a single place to manage their complete financial picture, no matter where the information originates. Households on average have more than three financial institution relationships for wealth and savings solutions and up to six credit card accounts. LT: Legacy Tracker provides a safe & accessible place to safeguard all of the important information and documents in life

2011 US Trust Insights on Wealth Survey: A survey of wealthy Americans with $3M or more of investable assets 56% of those surveyed have not documented personal property and assets, and roughly half have not documented instructions about the distribution of personal property or assets among heirs; even though 25% acknowledge their heirs don’t understand their wishes for how to divide special possessions LT: Helps consumers safeguard their hard-earned assets & can help facilitate important conversations with family members and loved ones about estate planning or final wishes 

2008 Innovations in Retail Financial Services IG&H Consulting & Interim, Woerden:  In financial services these days, a lot of companies struggle to win in severe price competition. However, a financial institution should develop it’s business on long-lasting & customer value driven business models; price is not enough. An element could be innovation.            LT: Helps financial service providers innovate & differentiate their offerings

2011 Banking on You by Thomas Watson, Canadian Business Magazine: Canada’s biggest banks are desperately trying to find new ways to connect with customers. Increased competition has heightened the banks’ interest in offering value and quality to customers, and forced banks to form individual identities. “The ability to introduce new fees is limited, raising the importance of gaining share through better service, broader relationships with clients and growth markets” (Margaret Willis, HSBC Executive VP of Retail Banking and Wealth Management) LT: Helps financial organizations differentiate in a busy marketplace and provide a meaningful way to demonstrate customer advocacy which can deepen client relationships

2011 Canadian Life & Health Insurance Association (CLHIA) : A national online survey of 1,504 Canadians over 18 by Leger Marketing showed only 26% of Canadians think their personal and financial information would be easy to access in an emergency. 56% said their personal & financial information is “somewhat organized” while 11% said it was “not very organized”  LT: Helps users enhance their level of emergency preparedness and by safeguarding important financial legacy & information

2010 Intuit Financial Online financial management survey: Banking customers view online financial management solutions from their bank or credit union as competitive differentiators. 52% of those surveyed said they would leave their current financial institution for one that offers better money management capabilities. Nearly 50% of respondents said they’d already switched banks or credit unions recently. and one-third of them switched because their financial institution did not provide satisfactory online solutions LT: Financial institutions need to offer their customers more in the way of tools & solutions that help them manage their money –a differentiator in the marketplace

 2011 Investment Executive Magazine – Prevent Executor headaches Bank of Montreal Survey confirmed CHLIA’s figures, almost 50% of Canadians who have been appointed to be an executor of a will have experienced administrative “complications” More than 25% have experienced legal issues. “If everything is not written down and documented, the difficulty in sorting out the mess can tie up the settling of an estate (Carol Bezaire, VP of Tax & Estate Planning with Mackenzie Financial. ” Technology has made some things invisible. In their capacity as executors, in some cases, the bank has had to take possession of the deceased’s computer and hire experts to search the hard drive to find crucial information (Royal Bank Estate and Trust Services)  LT: Reduces financial risk for individuals & their loved ones of unclaimed funds for families but it also safeguards families from incurring additional grief in the form of additional delay, cost and stress in times of emergency

2013 For the Love of Money Blog  Are you finances organized? Get into the habit of organizing your finances and you’ll be in for some happy surprises. …..The truth is, we create needless work and worry for ourselves when we do not make a little effort to get financially organized. Often, the biggest leap to getting a house in order is getting over a negative mindset. A lot of people are unwilling to organize their finances because they think there is simply too much to do.  LT: We provide the place for consumers to get organized & stay organized. Simple on boarding and Simple to stay updated. Our built-in net worth tracker & alerts are intended to motivate you to stay up to date

2011 Investment Executive A New Focus on Financial Literacy by Keith Costello of CIFP     A new focus on Financial Literacy “What we have heard (The Canadian Institute of Financial Planners) is the need for unbiased but comprehensive learning materials. Consumers want content that will help them understand financial concepts in a more detailed way and that will guide their financial decisions. We should ensure that these types of materials are readily available” “there is no better marketing and brand positioning than investing in your customers”  LT: Providing tools and opportunities to enhance financial literacy will pay off for financial services providers-by way of better engagement and increased revenue opportunities and ultimately the success of their clients  

2011 Investment Executive Having the “talk” with your clients by Brent Jolly  As most clients have experienced lower investment returns over the past 5 years, it is becoming more challenging for advisors to demonstrate their value to clients. LT: Our online solution allows Advisors to offer a valuable tool to clients and their families, allowing them to safeguard financial assets and some assistance in facilitating discussions about estate planning. Advisors in effect are provided an opportunity to reach out to the next generation

 2013 21st Century PFM for a Mass Audience  Capitalizing on the power of personal finance management will first require the industry to break free of 1980s thinking about
who uses PFM and why. Today, 21% of U.S. consumers mix and match 1 or more of the 3 primary sources of PFM services:  1) desktop software, 2) bank PFM offered through online banking 2) bank PFM offered through online banking, or 3) web PFM offered through an explosively growing number of online and mobile players. That translates into 49.3 million adult users – and 191 million who use none of them.  Financial institutions are at risk of losing loyalty from PFM hungry customers.

We’re not exactly done. We’ll add to this list as we find the time. We’ve got lots more to add.

More work required on Estate Planning

New Survey: Same sad stats on Estate Planning & Wills

Different year: Same sad stats on Estate Planning & Wills 

PWC’s Employee Financial Wellness Survey tracks the financial & retirement well being of working adults across the US. For 2014, the survey included 2,100 full-time employees between the ages of 21-32(Gen Y), 33-53(Gen X) and 54-71(Baby Boomers)

With reference to Estate Planning, the survey showed that there is very little progress being made:

Overall, only 40% of employees have a will. This compares to 41% in 2013 & 37% in 2012. The % of those who have a will increases with age, only 51% of those age 55 to 64, have a will.

Here’s the breakdown:

  • Baby Boomers (59%),
  • Gen X (31%)
  • Gen Y (20%)

Of those employees who have a will,:

  • 66% say they have reviewed it and made any necessary updates within the last 5 years.
  • 34% of employees have a living will.
  • 29% have a durable power of attorney for financial matters and 30% for healthcare matters.
  • 75% indicate that their beneficiary forms are up-to-date

Read more of the survey results from PWC’s survey here 

LegacyTracker provides a simple, secure way for individuals & families to safeguard all of their important documents & information. Built in alerts & reminders …can include reminders that estate planning items are missing. LegacyTracker is a white label product perfect for Financial Service Organizations & Providers who will recognize the WIN/WIN benefit of offering a branded personal financial/estate organizing solution to their clients and account holders. LegacyTracker is also a solution that Employers or Membership based organizations can offer to their employees and members.

Connect with us for more information

Are your digital Assets worth more than your car?

It’s certainly possible…

The most recent survey results from McAfee (yes the Internet Security Organization) perhaps should be of no surprise in that our use of technology and our accumulation of all things digital is on the rise. …in a Big way. But the estimated value as of the 2013 survey may yet astound you; The average total value of our digital files in Canada is now estimated to be $32K. (The average of all countries surveyed basis is $35K )

Digital assets ? They include assets like:

  • Personal photos, videos
  • Personal records including health information, financial records, career information, personal projects/hobbies, email accounts etc.
  • Entertainment files including music, TV shows, e-books, video games, apps etc
  • Business Information which could include financial statements, customer data, accounting or payroll detail, domain names, websites, blogs,
  • Social Media sites & Personal Blogs

 How did the estimated value of our Digital Property get so high ? 

  • 88% of consumers own multiple digital devices
  • 62% of consumers own 3 or more digital devices
  • 20% of consumers own 5 or more digital devices
  • 51% of consumers spend 15 hours or more on their digital devices for personal use  each week.
  • Canadians store some 2,584 digital files on average on at least one digital device
  • 51% of the digital assets held by consumers were considered to be impossible to retrieve if lost or not backed up properly
  • 77% of Canadian consumers listed identity theft and fraud as top security concerns but 17% of those consumers do not have comprehensive security software in place on all of their digital devices (14% globally)

Security software and backup procedures are critical and should be worth the cost by now for Canadians, which the survey also notes is the primary reason given by those who don’t have any security software in place

LegacyTracker will not be able to recover your digital assets should they be compromised by a virus or security issue but it does provide protection in the way of allowing you to safely store your online Usernames & Passwords alongside instructions about your Digital Assets

Digital Estate Planning is Important …

Technology in most cases advances more quickly than law and that’s certainly the case with regards to digital asset protection and Digital Estate Plans. In the not to distant future or for some of us now, we could envision that Digital Executors will have to be considered to handle digital assets specific and separately from other assets. But at minimum today, it’s important to at least give reasonable consideration & recognition to your Digital Assets because No standard laws exist regarding digital property rights. And more unfortunately,  online service providers offer varying rules about your rights and about sharing access with another user regardless of the circumstance.

User agreements for digital accounts often will sometimes prohibit users from sharing access with another user no matter if it’s a family member, a business partner or an heir. Sad stories are in great supply about family members who can’t access or take down social media accounts of their loved ones who have passed away. it’s important to give consideration to not just providing an inventory that identifies your digital assets but also access information and some form of written permission or authorization for that access & specific instructions as to your wishes for dealing with your digital assets after your death. It’s a recent but fast growing area of concern that you should seek legal advice about.

 

 

 

 

Estate Mistakes – Ted Williams Baseball Legend

Estate Mistake: Document your final wishes & if you change those wishes – make the change formally & share the info so that information can be accessed quickly. Advanced Directives will help you outline those wishes between cremation, burial or something else as well as your medical care and end of life care

Baseball great Ted Williams by all accounts was a private person in life and it’s quite likely he wished to remain that way in death. Unfortunately, for Ted Williams, his Estate Plan also has become legend. In his will, Ted Williams said he wished to be cremated & his ashes sprinkled at sea off the coast of Florida.

However, a long-standing & bitter rivalry between his 3 children, Bobby-Jo, John Henry & Claudia made that impossible when the children from his 2nd marriage produced a grease-stained, handwritten note stating that he wished that his body be cryogenically frozen after his death. It was unclear if the handwritten note was written by Ted Williams or whether or not he had sufficient capacity to make that change to his final wishes.

His eldest daughter fought to have his body unfrozen and cremated, but gave up the fight when she ran out of money.  No one will ever know the truth behind the decisions made by or on behalf of Ted Williams-much has been written & is still being written about this particular case which was definitely not the intention of Ted Williams.

LegacyTracker helps families and individuals better prepare themselves for emergency situations that all happen to be on the rise including death, incapacity, Identity Theft, Natural and Physical Disasters. With the added feature of Alerts & Reminders, we hope LegacyTracker will help facilitate important family discussions that too many have put off, concerning estate planning and final wishes. The flexible sharing feature built into LegacyTracker allows individuals & families share any or all of their information with loved ones or Advisors. 

Estates gone Wrong – Florence Griffith Joyner (Flo Jo)

Estate Mistake: Forgetting to tell your family or loved ones where your Will is(or not doing one)

Such a great Olympic Athlete, sprinter Florence (Flo Jo) Griffith Joyner died too young at age 38 in her sleep in 1998 as a result of an epileptic seizure. She was an American track and field athlete considered to be the “fastest woman of all time” based on the world records she set in 1988 for the 100m and 200m sprints. Those records still stand.

Subsequent to her death, her husband couldn’t find her original will, and was not able to file it within the 30 days required in California…As a result, lots of family issues came about between Flo Jo’s husband and her mother, as to whether or not Flo Jo had promised her Mom that she could stay in the house for the rest of her life.

The original will was never found. A judge eventually appointed a third part to administer the estate. It took over 4 years to close her estate.

Who wants to argue and grieve at the same time?
Legacy Tracker helps families and individuals better prepare themselves for emergency situations that all happen to be on the rise including death, incapacity, Identity Theft, Natural and Physical Disasters. More generally, Legacy Tracker will also help facilitate important family discussions that many families have put off, concerning estate planning and final wishes.

Life is Complicated/Death is more so/Get Organized

When did life get so complicated with multiple everything and not enough time ?Which is why you need to Get your stuff together …

The poster above is from a 2011 article from the Wall Street Journal (Saabira Chaudhuri) The 25 Documents you need before you Die It was a good read then with a great poster and even more so a few years later. The Article talks about  the financial consequences that befalls your family and loved ones if you fail to keep all your documents and important papers in order. The author makes reference to the very large investigations & lawsuits that started around that time into the obligation of insurers to pay out unclaimed life policies to beneficiaries. I think it was what prompted Saabira to write the article since that  BILLION dollar story is still ongoing in the US, 3 years later.

The article makes reference to the $32.9B in unclaimed bank accounts and other assets. That total is now $58B. The US has had legislation since the 1930’s around unclaimed assets to tracking, reporting and actively looking for owners of unclaimed funds is common place. No such luck in Canada outside of Alberta and Quebec

LegacyTracker is built much like the cabinet you see in the poster except it’s Secure, Accessible online, Template based to reduce info that might not be included otherwise, the flexible sharing, printing, saving, more comprehensive and comes with built-in alerts & reminders and a net worth tracker…since LegacyTracker is not just about death; it’s about living as well.

Read the article from the Wall Street Journal Here

Only 2% of Advisors know how to maintain the next generation of clients

From Advisor.ca article “Adapt to Wealthy Client Needs, or else” by Dean Dispalatro October 2013

Mr Dispalatro writes in his article about some wisdom shared by Keith Sjogren, managing director of consulting at Investor Economics including what he outlined as the 3 trends impacting the wealthy. 

  1. Sluggish economic growth resulting in income being depressed and personal wealth not growing
  2. Concentration of wealth in Canada’s is growing steadily. Those with more than $1M in investible assets now control 2/3 of the country’s wealth
  3. Debt reduction is a top priority with the wealthy

All of this leads Sjogren to conclude that the wealthy need more advice; but wealth management advice not investment advice. He also suggests that more attention should be paid to those with high incomes who have not yet accumulated assets of $1M as they probably will as real estate or business interests are sold and inheritances are received 

But he also points out the demographics of wealth at play.  By 2022, more than half of wealthy people will be older than 65. & that demographic is not made up of conspicuous consumers but  capital protectors with a big focus on leaving a legacy for their children. Hence, he concludes that advisors should shift their focus from “accumulation to preservation.”

Indeed the $900 billion that is set to change hands in the next 10 years.at least half will happen in wealthy families, making estate planning a key priority offering. But the issue remains; advisors are not doing an adequate job of getting to know the families of their clients;  which as he says “is a sure-fire way to lose the next generation when wealth changes hands

Investor Economics data backs this concern up.  When assets are transferred to a widowed spouse, only 55% keep the same Advisor.  When assets are transferred to the children, a whopping 98% move to a different Advisor.

Even millionaires are procrastinating

This from a 2010 article ” Wealthy Worry about Next Generation” in Advisor.CA magazine by John Powell 

Referencing a study by RBC Wealth Management of Canadian Millionaires:

  • 58% of millionaires think their children are facing an uphill battle when it comes to managing their finances
  • 49% don’t have confidence in their children’s abilities to manage the inheritance. 
  • 67% feel it is their responsibility to preserve wealth for future generations and leave their children with a healthy legacy,
  • But, 39% have no estate plan to speak of.

Contradictory?
Tom McCullough President/CEO of Northwood Family Office chalks it up to people just being human and not wanting to face what the future might hold for them and their loved ones. 

“Estate planning is complicated. It is about the future. It is about death. They don’t want to have to make those decisions now,” he explains. “I think it is one of the most important things people need to do is to sort through their personal affairs and their estate but there are a lot of folks who don’t do it, don’t get to it or don’t know how to do it.”

Thane Stenner, Founder/Director of wealth management at Stenner Investment Partners, an independent private family office group within Richardson GMP Limited, is not surprised by RBC’s findings as it mirrors the results of his own company’s research from 2006. which highlighted the top concern of the high-net worth clients as being how their children would handle the family finances in the future.

“What is interesting is there still seems to be some procrastination taking place. That is not surprising. Most successful, wealthy families are busy. They have a lot on the go. Estate planning or issues like that are never seen to be urgent and that is one of the reasons why a lot of the times quite candidly, that estate plans are not updated and are not properly papered,” says Stenner

What are your digital assets worth?

McAfee the online security organization has commissioned a few surveys over the years that show the growing value of digital assets. Their research in 2011 (provided by MSI International) surveyed more than 3,000 consumers across 10 countries and shows varying values of digital assets.

mcafee-unprotected-digital-assets

Digital Assets? They include music and video downloads, software programs, photos, career info, personal records, email etc.

Canadians estimated their digital assets on average to be worth $47,074 which is slightly behind Americans ($54,722) and ahead of the UK ($38,360). McAfee’s study also suggested that it would take an average of some 82 hours for most of us to restore our digital assets if lost. That would be the estimate if we were alive. If we are not alive…it’s anyone’s guess if they could be restored at all. Digital assets/Digital passwords need to be backed up and shared somewhere safe

In 2013, they released a new survey specific to Canadian consumers’ attitudes towards online surfing, web security and data protection.  This survey showed Canadians placing a value of $32,000 on the digital assets stored on their devices (not sure why the decrease from the earlier study) This study showed that most of us are not taking appropriate precautions to back up and safeguard our digital assets.

Protecting online assets needs to be made more of a priority for our families and that will come from education and having a good handle on secure technology.

mcafee-digital-assets-canadMcAfee Cares is an Online Safety for Kids program which hopes to train school aged children and adults on ways to stay safe, secure and maintain good ethics in online behaviour.  You can learn more about their program here http://mcafee.com/onlinesafety.

LegacyTracker has made provisions for safeguarding your digital assets

Your Growing Digital Estate-Why we worry

This is a good article from the Student Lawyer website  The choice for aspiring lawyers (& us)

Digital Estate Planning: Is Google Your Next Estate Planner? 

This article picks up on a discussion with Jamie Hopkins who is Assistant Professor of Taxation at New York Life Center for Retirement Income about the challenges facing traditional estate planning in relation to the disposition of digital electronic assets

Google your estate planner

…”the unique nature of digital assets, coupled with the fact that many digital assets will long outlive their owners, presents new challenges to traditional estate planning techniques…”

While many people do not have an estate plan in place for the disposition of their traditional assets, even fewer have a specifically designed digital estate plan to manage their digital assets upon death. By the end of 2012, almost 30 million Facebook accounts had outlived their owners, but only three million had been memorialised [4] for their deceased owners. This leaves millions of photographs, private messages, and other digital assets stored on the deceased’s Facebook account, which is inaccessible to his or her family and friends.[5] These forgotten pages become a virtual shrine, creating ‘a pixilated Dorian Gray, colored by iPhone photos, ‘pokes’, and ‘LOLs’ — possibly for an eternity.’[6] As such, the unique nature of digital assets, coupled with the fact that many digital assets will long outlive their owners, present new challenges to traditional estate planning techniques, requiring more complex planning techniques than previously used for the disposition and management of traditional estates.

What will happen if you or one of your loved ones sets up all of their accounts online but the access information is not shared? A family already grieving is subject to even further distress. The last thing you or your family need is a time of grief is the frustration and potential financial loss because proper digital estate planning was not considered especially in light of the fact that there are unique issues that plague digital assets like ownership and transferability.

LegacyTracker does provice for digital estate planning

Life is…. complicated. Death more so. Get Organized.

Orginally published Jan 13 2013

Stop procrastinating…Get your stuff together (please)….

This is a poster published first in the Wall Street in 2011 – It’s a good one..with an article from Saabira Chaudhuri titled “The 25 documents you need before you Die”  It’s cdrtainly an attention grabber.

25 important documents article

It’s a great poster and a fascinating story which talks about the financial consequences that befalls your family and loved ones if you fail to keep all your documents and important papers in order. In the US where they track, report and actively look for owners of unclaimed funds they know that the toll is great. $33B (now $58B) approximately in unclaimed bank accounts and other assets like paid up insurance policies.

You may or may not know (maybe this is your first visit here) that Canada is not so lucky. Only 2 provinces have any real unclaimed intangible property legislation in place (Alberta & Quebec).  That’s not the way it should be but that’s the way it is right now in Canada.

That sad fact, makes it even more critical to ensure that your records are organized and shared to make sure you reduce the financial risk that comes from not being so organized. So yes. Please stop procrastinating around this topic.

Read the article from the Wall Street Jounal here