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FORUM MAGAZINE

IN THIS ISSUE

Editor's Letter – Kristin Doucet

This & That

Estate Planning – Suddenly Widowed by Deanne Gage

Estate Planning – Exit Strategy by Gary Clark

Tax & Estate Planning – Going it Alone by Jamie Golombek

Financial & Retirement Planning – PRPPs by Lynn Biscott

Succession Planning – Family Succession by James W. Kraft and Deborah Kraft

Advocis News

The Final Word by Dean Owen

Estate Planning

Suddenly Widowed

We all know the old adage about death and taxes. Seems very few clients want to think about eventualities, though. Financial advisors need to prepare the families of clients for the financial realities of when a loved one dies. Deanne Gage explains why proper planning is essential, why it's important for the spouse to be involved in financial decisions, and what advisors can do to nurture that extended relationship.

The vast majority of clients would prefer not to think about their eventual demise, or that of a loved one. This could explain why some drag their heels when it comes to updating their wills and other financial arrangements, or simply ensuring heirs know where to find important documentation.

In more traditional client relationships you may be dealing with the husband while the wife sits on the financial sidelines. You’ve asked about her involvement only to be told that “she’s not interested in this stuff.”

This may not be a problem until something happens. Let’s say the husband dies. The wife is now widowed — coping not only with a huge emotional loss but facing all kinds of financial decisions she knows nothing about. While many women of the baby boomer generation and younger are in control of their finances, older women in their 70s and 80s are often in the dark.

Surprisingly, the average widow in Canada is only 56 years old. Widows make up 45 per cent of seniors, according to Statistics Canada. How you handle a male client’s death — and treat his widow — can mean the difference between retaining the assets and losing them completely. In fact, studies show that 80 per cent of women will change advisors within 18 months of their spouse’s passing.

"The hard work for a financial advisor begins when you have to deliver on your promises and what you said you were going to do,” says Jane Blaufus, a former insurance advisor based in Burlington, Ont. “These widows are going to be the ones handling the money after the deceased is gone. If you don’t already have a trusted relationship with her, you are not [going to get] past first base.”

Blaufus knows firsthand how this can happen. She recalls inheriting a client from another advisor when the client suddenly passed away. Blaufus hadn’t had time to build a relationship with his spouse. When Blaufus ultimately delivered the life insurance cheque to the widow and other family members, “it was like the Spanish Inquisition. I was on one side of the dining room table and they were on the other, arms folded. I never heard from them again.”

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