Filling the gaps with executor planning services

By Skip Rapp

Executor's Resource


Your clients might think their estate plans are airtight. Maybe not. To find out, ask them the following:
  • Have you shared your estate plan with the family member or friend who will serve as your future executor?

  • Is that person aware of what he or she will be legally required to do?

  • Will he or she be able to find your plan and other critical instructions?
If you think your clients would answer "no" or "not sure" to any of these questions, their airtight plan may very well have a slow leak. The success of an executor in the estate settlement process is largely dependent upon his or her ability to easily find the information and instructions needed to responsibly manage all of the requisite tasks. When executors get into difficulty, it usually means that costs escalate and the transfer of assets to beneficiaries is delayed, which causes intra-family strife.

Most family member executors are completely caught off guard by the time commitment and responsibility required by the role. With your boomer clients about to be on the receiving end of what's billed to be the largest intergenerational transfer of wealth in our nation's history, it may very well be that your sleeper business strategy for 2009 and beyond should include offering an executor planning service.

Clients don't know what they don't know

The majority of boomers do not understand the implications of their choice in executor. Nor do they, as future executors for their parents or spouse, understand the responsibilities they will have, or how to best prepare. This misunderstanding can be especially crippling for clients that are planning for retirement and dealing with aging parents simultaneously.

The evidence is not anecdotal; a 2007 BMO/Ipsos Reid survey strongly supports the lack of understanding that boomers have regarding an executor's responsibilities. The survey, conducted in Canada, demonstrated a general lack of high-level knowledge surrounding estate settlement. Eighty-eight percent of respondents correctly recognized some of the more common administrative tasks involved, including "pay the bills, redirect all mail, cancel subscriptions... review all bank and investment statements and close accounts." However, nearly one-in-three incorrectly believed they had responsibilities relating to the ongoing care of pets or guardianship of children.

Moreover, general negativity toward the process is a common reaction. According to survey results, only a small fraction of those who have settled an estate expressed the experience as "positive" (13 percent) or "rewarding" (11 percent).

There are also misconceptions about the average amount of time it takes to settle an estate; only one-fifth of surveyed individuals thought that it could take up to one year to complete the process. The typical estate takes approximately one year to settle.

Despite the understandable lack of enthusiasm for being an executor (including the overwhelming time commitment), nearly 66 percent of those surveyed will choose a family member. More specifically, 18 percent will choose a sibling, 21 percent will choose a child, and 30 percent will choose a spouse. The decision to choose a professional, including a lawyer or a trust company, was least popular (7 percent).

Executor planning services: Your sleeper business strategy

The irrationality of the situation is quite obvious. Those unable to describe the responsibilities of an executor are recruiting their own. This huge disconnect provides advisors with the opportunity to leap ahead of the competition by providing a value-added executor planning service that meets a presently unmet need.

Here are a few ideas you can use to engage your clients:
    1) Leverage your regular client meetings. Allow 10 to 15 minutes at the end of your next regularly scheduled client meeting to discuss the topic. Your primary objective is to uncover key information that will help you better work with this client based upon his or her specific needs. Be sure to ask the following:

    • Will you be a future executor for a loved one?
    • Who have you selected as executor for your own estate?
    • What is your understanding about the estate settlement process
      and the role of an executor? Do you have any questions or concerns?
2) Hold a special meeting with your client. Based upon the knowledge assessment and the urgency of the situation, you may want to hold a special meeting with your client to dive deeper. He or she may be the future executor for a loved one who is terminally ill or has an extremely complex estate or family dynamics. See my previous article "60 minutes to a better prepared estate" for an outline to help shape your conversation.

3) Host an educational workshop for your clients and their future executors. Invite your clients and their future executors to attend a workshop that you facilitate, where you discuss what happens during the settlement process, the role of an executor and steps to best prepare for the future. You may even want to partner with an estate planning attorney to co-facilitate the session with you.

4) Incorporate educational articles on the topic of executor planning in your client newsletter. If newsletters are a regular part of your client outreach, you can use this approach to demonstrate to your clients that you understand the importance of the topic and have the knowledge to bring the right resources to bear for their situation. Write your own article based upon your past experience with helping clients, or outsource the drafting to an estate planning attorney with whom you work. It may be obvious to you, but it bears repeating. Through offering a well-thought out executor planning service, you and your client can realize value across multiple fronts. They'll have peace of mind knowing that their executor has a good grasp on the role they'll play in the future. Additionally, the costs of estate settlement may be much less because the estate was well-organized in advance.

Your ability to demonstrate value to the family as a multi-generational advisor will aide you in generating new business in the short-term through consolidations, additional product sale opportunities, and client referrals. Throughout the long-term, as the nation ushers in this unprecedented period of wealth transfer, you'll be well-positioned to retain assets and capture money on the move.

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