Where there’s a Will, there’s a plan … sometimes

Transcript

Intro speaker:

Hello, and welcome to Matters Beyond Wealth with your host, Leanne Kaufman, president and CEO of RBC Royal Trust. For most of us, talking about subjects like aging, late life, and estate planning isn’t easy. That’s why we’re going to help get the conversation started on this podcast, while benefiting from the insights and expertise of some of the country’s top experts. We want to bring you information today that will help to protect you and your family in the future. Now, here’s your host, Leanne.

Leanne Kaufman:

Hello, I’m Leanne Kaufman and welcome to RBC Wealth Management Canada’s Matters Beyond Wealth.

Our aim in this series is to bring you timely topics with recognized industry experts, to help demystify the complexities of estates, estate planning, and related matters. In this, our inaugural episode, our topic is one of the basic fundamentals of estate planning: why do you need a Will?

For years now, we’ve known that a high percentage of Canadians still do not have a Will. But there are negative consequences to the people you leave behind when that happens. During the early days of Covid-19, there was a noticeable increase in the public focus on the importance of estate planning, and in the willingness of people to talk about the subject. But to better understand if that increased attention actually moved the dial on the number of Canadians who took action to get a Will, or power of attorney documentation, RBC Royal Trust recently launched a survey in conjunction with Ipsos. Somewhat surprisingly the results did not show a material increase in the number of Canadians who have put a Will in place: of the 2,000 Canadians surveyed, only 48 percent reported having a Will. Even more alarming to me anyway, 65 percent said that they don’t have a power of attorney appointed. Now, without getting into the weeds too far on this survey, there is an important difference based on the age of the respondents to the survey: in the 18–34 years of age cohort, 70 percent of them said they did not have a Will, whereas in the over 55 group, only 26 percent still did not have a Will.

To help us unpack some of this, and understand the importance of getting that 52 percent of the population to put a Will in place, I am delighted to introduce our guests today Daniel Goldgut and Arin Klug. Arin and Daniel are the Founders of Epilogue Wills—an online platform that helps people create their own Wills, powers of attorney, and other estate planning documents. Before starting Epilogue, Daniel and Arin practiced as tax and estate planning lawyers in Toronto, where they saw first-hand the difficulty that many people having finishing—and sometimes even starting—the estate planning process. Daniel and Arin believed they could use technology to make basic estate planning more accessible and affordable. They started Epilogue in 2019 with the goal of democratizing estate planning for Canadians. RBC and Epilogue Wills announced a collaboration to offer clients who need basic estate planning an affordable online option, to create a legally-binding Will.

Arin and Daniel, thanks for joining us today to talk about the importance of having a Will, and why this matters beyond wealth.

Arin Klug:

Thanks Leanne. Happy to be here.

Daniel Goldgut:

Thanks for having us.

Leanne Kaufman:

Arin, you and Daniel are both lawyers who previously practiced in the estate planning industry, and you clearly understand the importance of having legal documents in place to represent one’s wishes once they pass. And also power of attorney documents to help protect individuals while they’re still alive. Tell us about why you created Epilogue, and how those survey statistics I mentioned earlier played into your motivation?

Arin Klug:

Yeah, thanks Leanne. As shocking as some of these stats are around Will making, they actually make a lot of sense when you stop to think about it. So the idea of making a Will, that’s daunting for a lot of people. It’s something they don’t want to think about. Nobody wants to think about death. Estate planning is also something that people don’t know much about. And if you don’t know much about something, you’re sort of scared to jump into the water. It also sounds like something that’s going to be really complicated. Again, something that can stop people from even starting the process. And like you mentioned before, for most people, estate planning is something that needs to be done urgently. And I think that’s why we see this divergence between older people who are getting their Wills done and younger people who aren’t getting their Wills done. It’s not like filing your taxes. There’s no deadline that you have to get your Will done by. Add on top of that the fact that people think about making a Will going to a lawyer is something that’s expensive, could be time-consuming. And it’s really the perfect recipe for procrastination. I always say that if you were going to design a task specifically that people were going to avoid doing, it would be making a Will.

Daniel and I saw these things in practice, and we really saw technology as a part of a solution to this estate planning gap that we have in Canada. There’s so many things that we are now comfortable doing online that we only used to do with another person, think about booking a vacation. And so we see estate planning, basic estate planning, as sort of the logical extension of those things. Being able to give people a platform online where they can do things the way they’re used to doing so many other things these days, from their phones or from their computers or tablets. From the comfort of their own home, on their own timeline. Those are the things that really motivated us to build out a solution like Epilogue.

Leanne Kaufman:

So Daniel, for our listeners who think they may not have a need to create a Will. That either they’re too young or maybe they don’t have sufficient wealth to think it’s worthwhile, can you explain what happens if they don’t have one?

Daniel Goldgut:

Absolutely. And it’s something that we hear from people all the time. When Arin and I were practicing people would tell us, “I’m too young. I don’t have enough assets.” And so a lot of those people, I think, didn’t fully understand what some of the consequences are of not having a Will. There’s some big decisions that you’re making in a Will.

So the first that comes to mind is in terms of the distribution of your assets. And so if you don’t have a Will, you’ve given up the choice about who gets your stuff. So across Canada in every province there’s rules about what happens if someone dies without a Will, and the distribution of their assets just goes according to the law. And so if you don’t have a Will, it’s conceivable that people that you wouldn’t want to share in your estate are either going to share in your estate and potentially get your entire estate. So even if that number is not significant, it’s still important that it goes where you want it to go.

There’s two other things that come to mind as well. Two other key decisions that people get to make in the will making process. So one of those is naming an executor. So that’s a really important job. That person or trust company is going to be responsible for managing your affairs and carrying out your wishes. And so it’s really important that you have the right person or company in that role, even just to do some very basic things very early in the process. Making sure that bills get paid, starting to begin the process of administering the estate.

And then the third one that comes to mind is guardianship. So if you have minor children or pets, a Will is the way to let people know what your wishes are in terms of who should become the guardian of your minor children and your pets. And so even people that are young without significant assets, if you’ve got minor children or pets, this is really, really important. It ends up being a pretty big motivator. It’s one of those things that gets people to start thinking about making the Will. I think they maybe rely a little bit less on the, “I’m too young,” or, “I don’t have enough assets,” once there are children and pets in the picture. But still, as you just mentioned, it’s not moving the needle enough to get people there.

Leanne Kaufman:

Well, hopefully conversations like this might help a little bit as well. We know that online Wills, without customized advice from a lawyer bespoke to a person’s individual’s situation, are not necessarily right for everyone. And your platform recognizes that as well. Arin, can you elaborate a little bit on the situations where Epilogue does make sense and where it may not?

Arin Klug:

Yeah. And it’s a really good point and an important one for people to know when they’re starting to think about what their right solution is for them to get their Will done. One of the things that Daniel and I noticed when we were in practice is that when people had relatively simple family situations, they generally wanted to achieve the same things with their estate planning. So take, for example, the nuclear family. A couple that’s married and has kids. Very often the instructions that we would get as lawyers is, “When one of us passes, whichever one of us passes first, we want the other spouse to get all of the assets. And once we’re both gone, we want everything divided equally between the kids.” So that’s the type of relatively simple standard distribution that we saw a lot of in our practice, and that lends itself really well to a tech solution like we’ve built in Epilogue.

Once you get outside the bounds of sort of those more standard distributions, that’s when you’re going to want to speak to a lawyer to help you with your estate planning. So for example, in a blended family situation, where there’s a second marriage and kids from a prior marriage, for example, that’s a situation where you’re going to really need to balance the needs of your current spouse, as well as the needs of your children. And those more custom solutions require something more than an online platform.

Another example is one where somebody wants to treat their kids differently under the Will. They want to give more to one child and less to another child, and there’s lots of good reasons why somebody might want to do that. Let’s say they helped out one of the kids more during their lifetime, and so they want to equalize things under the Will. Somebody can certainly do that in their estate planning, but it’s that type of nuance that would necessitate them going to a lawyer, the lawyer’s going to, in that type of situation, ask very good probing questions about why the person wants to do that. The lawyer’s going to take very good notes about why the Will maker wants to treat their kids unequally. They might even put custom clauses in the Will that address that situation, and those aren’t things that somebody’s going to get from an online solution. And so when people’s situations are relatively basic, when the distribution scheme they want is relatively basic, and there aren’t a lot of complicated assets that they need to deal with, that’s when an online solution could really be a simple, cost effective way to get a Will done.

Leanne Kaufman:

Great. Thank you. We referenced earlier that the pandemic has really shone a light on retirement lifestyle, but in the context of this conversation, mortality and estate planning, we spoke about a younger cohort of Canadians and why they should get a Will, but we also still have a fairly large population of aging Canadians who don’t have an up-to-date Will. That 26 percent that I mentioned in the over 55 age group.

Daniel, given your experience in the past, can you shine a bit of light on the hazards that you’ve come across in situations where Wills were maybe not only not created, but also not kept updated, and circumstances may have changed, and that may impact the estate settlement process.

Daniel Goldgut:

Yeah, there are a lot of people when they think about Wills, they think about this one-time document that you create that is going to be in existence, and doesn’t necessarily need to be changed. And so what we saw in practice a lot and what we still see today, there’s, a lot of older Canadians who did their Will at a particular point in time when things looked a certain way, and they don’t look that way anymore.

And so a couple examples of those are naming a particular person to be your executor. And 30 years later, is that still the right person? If you’re naming your parents to be the executor, and you fast-forward and you look back at the Will and those parents are now over 80, over 90, is that still the person that would make sense to be your executor? Or is there an opportunity now to look and say, “I have adult children who are responsible, and who are more in tune with our finances, and those would be more appropriate people to be in that position.” Or a trust company, in light of the change in assets from the time when someone would’ve made their Will, to what their circumstances look like today.

Another one of those things could be the age of distribution. So when someone is making a Will, if they’ve got really young kids, they may say, “I’m comfortable that they should get their full inheritance at age 21.” And if you fast-forward 30 years, and either you know more about the children, you’ve got a better sense of at what age would be the right age for that child to get control over their full inheritance that might be something that you want to look back and change, or it could be more based on your assets. So you may have said, “I feel really comfortable with a child getting a third of my estate if that estate is going to be this amount. 21 might be a fine age for that. I feel really different if there’s a lot more wealth there now.” So that’s something that might need to be revisited.

The other ones, which is just not updating the Will to reflect what your family circumstances look like anymore. So if you made your Will at a time when you had no children, and then you had children, it’d be really important to make sure that those children were included in the Will. Or if you made your Will at a time when you were unmarried and then you get married, or you made your Will when you were married and then you subsequently got divorced. So there’s now the possibility that there are people that are very important to you that aren’t included in your Will. Or the reverse, which is there may be people who are no longer a part of your life that are still included in the Will. And so, always important.

Leanne Kaufman:

Or maybe now there’s an identified need for a trust, for example, because something has happened in the lives of one of the beneficiaries. Yeah. You’re right. There’s so many circumstances that can change, and it really does have a ripple effect on the estate plan that people are probably not going to keep top of mind on their own. Isn’t it?

This has been such a valuable conversation. I feel like we’ve just really hit barely the tip of the iceberg. So hopefully we’ll have you back and chat a little bit further on another day, but before I let you both go, a question for each of you. We’ll start with Arin, and then Daniel, maybe you can pick it up. If you just want listeners to remember one little nugget from today, what would that one thing be?

Arin Klug:

Well, aside from getting your Will done, and that’s an obvious one, now that you’ve listened to this and the importance of getting a Will, one thing I’ll add onto that is there’s this myth in estate planning that when somebody passes away, the family goes to the lawyer’s office, and the lawyer unseals the Will and reads it to everybody for the first time. Leanne, you know that’s not a thing. That doesn’t happen. But people do think their Will should be kept a secret, and I don’t think it should be. It’s important to let the people that you’ve named in the Will as executor, as guardian for your children, know that you’ve made those appointments, make sure they’re comfortable with them, make sure that if you have any wishes you tell them about this. They should see what’s in the Will, because the last thing anybody wants is that phone call after somebody’s passed away saying you’ve been named to the executor of their estate, and it’s a surprise. Or even worse, you’ve been named the guardian of their children, and it’s a surprise.

And so once you’ve made the Will, then it’s important to share the Will, the contents, your wishes with the people that you’ve assigned to those important roles.

Leanne Kaufman:

And maybe in some cases why you’ve made the choices that you have.

Arin Klug:

Absolutely.

Leanne Kaufman:

Daniel, how about you?

Daniel Goldgut:

My advice would be just start somewhere. I think there’s a lot of things like this where people procrastinate and it’s really hard to get started, because it just feels daunting. It feels like you need to be fully prepared to go all the way down this road for this long drawn out experience, and that just might not be the case. So I think it’s important for people to just start. That it can look different ways. It could be looking online, it could be calling a lawyer. But just starting the conversation somewhere, and people I think will find out it’s not as scary as they thought it was going to be, whichever path they end up going down. And there’s a lot of peace of mind waiting on the other side of it. It’s one of those things that sits on people’s to-do list for a really long time, and a weight can be lifted off your shoulders a little bit once you’ve finally gone ahead and done it, and you feel that knowledge that you’ve named an executor, you’ve named guardians, you’ve put basic planning in place. So just start. Start somewhere. That’s the advice I would give.

Leanne Kaufman:

Both of you. Great pieces of advice. Thank you so much, Arin and Daniel for joining us today, and sharing this important information about estate planning, and why a Will is something that Matters Beyond Wealth.

You can find out more about Epilogue Wills, Daniel and Arin, and the work that they’re doing on their website, epiloguewills.com. And you can follow them on their Facebook handle, @Epiloguewills, on Twitter @Epilogue_Wills, and Instagram, @Epilogue_Wills. Thanks everyone. Have a great day.

Arin Klug:

Thank you.

Daniel Goldgut:

Thank you.

Outro speaker:

Being an executor can feel overwhelming, especially during what is already a difficult and emotional time. Many people find out that they aren’t ready for what’s involved, especially given the time required, and the added stress of completing the necessary steps to successfully execute your duties. Whether you are currently in the process of settling an estate or newly appointed as an executor in a loved one’s will, RBC Royal trust can help. Available on the RBC Royal Trust website and free to use for all Canadians, Artie, the executor helper, is a set of free online tools that can help you understand the complexity of the estate you’re settling, and guide you through the tasks involved. Visit rbc.com/royaltrust to learn more.

Thank you for joining us on this episode of Matters Beyond Wealth. If you would like more information about RBC Royal Trust, please visit us at our website at rbc.com/royaltrust.