Make sure clients have a will

When a financial service advisor meets a client and collects the information needed to build a file, they must ask if the client has a will. This document is essential to establish how a person’s assets will be distributed upon their death.

The advisor must also ask whether the will is a notarial will, a holograph will or a will made in the presence of witnesses. This is important because, as notary and legal advisor Renée-Claude Boileau points out, only a notarial will takes effect upon death and is not subject to probate. “The law recognizes notaries as public officers and allows them to confer authenticity onto wills,” she explains.

However, to have legal effect, holograph wills (handwritten and signed by the testator) and wills made in the presence of witnesses must be probated by a notary or by the court. Choosing one of these two types of will, thinking it will save money, is not such a good idea. “Upon death, it will delay settlement of the estate and result in much higher costs than a notarial will,” says Boileau, who adds that notaries know all the subtleties of the law and will suitably convey a person’s wishes. In her view, it’s all the more important now as family situations have become more complex in recent years, with blended families, for example.

Boileau also warns against online will templates. “The information and forms available on the Internet are often incorrect or don’t apply to Quebec. If the will has not been prepared according to the rules, it will not be accepted.”

She also says that in response to the pandemic, the Chambre des notaires has introduced measures for receiving signatures remotely. This means people can sign a will electronically in virtual meetings with notaries. These meetings are governed by strict rules, in particular to ensure the identity of the person.

No spur-of-the-moment decisions

Financial planner Marc Binette believes it’s better to have a holograph will than no will at all. He also says estate planning is generally an ongoing process. “I ask a few questions about this every time I meet my clients—to check whether their situation has changed, for example. Estate plans need to be reviewed over the years.”

The underlying principles, however, are always the same. First, identify the client’s goals. “Be sure to ask questions to make sure you understand their objectives,” he says. “For example, when it comes to wealth transfer, you could ask the client whether they’ve looked at all the scenarios and whether they’ve thought of making a charitable donation.”

Once the goals have been established, it’s important to do a careful analysis. “If a client wishes to leave 50% of their assets to their daughter, who is a minor, you could ask at which age the client would like her to take possession of her inheritance and how: for instance by installments after she reaches the age of majority,” says Binette, adding that it’s crucial to get clients to reflect on their situation and how their decisions might impact their loved ones.

The advisor must then create the necessary conditions to meet the client’s goals, for example by altering the types of financial or insurance products, drawing up or reviewing their will or preparing a protection mandate.

During the process, it’s also important to think about taxes and put strategies in place to minimize them. If the client is a businessperson, certain questions need to be asked, for example: Does the company qualify for a capital gains exemption upon transfer? If not, appropriate measures need to be put in place.

“It’s normal to think about estate planning given the current circumstances, but we must make sure that clients don’t make spur-of-the-moment decisions and that they understand the importance of being advised on the various aspects involved,” concludes Binette.