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National Wills Week takes place from 14 to 18 September and is an ideal time to check in with clients who need to draft or update their will and draw up an estate plan. These are some of the most important financial documents your clients will ever have. They are also the ones they often delay finalising. Address the reasons for procrastination and your clients will be more likely to complete their wills and estate plans.
Why clients delay making a will
Advisers rarely find clients who don’t think wills are important. But many they meet with don’t have either a will or an estate plan in place. Reasons for this include:
- Believing there is more time. Clients think they have many years to live and therefore lots of time to make a will and estate plan.
- Believing they don’t have enough wealth or assets to warrant a formal document or plan.
- Thinking the process is too expensive and/or complicated.
- Believing there is no need because beneficiaries have been named on policies, pensions and investments.
- Feeling uncomfortable talking about death.
We’ll address these below in more detail.
What motivates clients to make a will?
Identifying the reasons why some clients do make wills provides counterarguments for the reasons they don’t. You can use these when encouraging your clients to take action and complete their estate plans.
The Center for Retirement Research at Boston College found that the number one reason clients made a will was that they had a child or children. This was followed by the death of someone close to them and then by parents, family or friends recommending they get a will. Fourth on the list of reasons why people make a will was witnessing complications with an estate when there was no will. Getting married and having a near-death experience also spurred action to make a will.
Get your clients to take action
If your client is delaying, take time to find out why and address their concerns. When your client says:
I’ll do it another day
Around a third of respondents in the Boston College research who didn’t have wills said it was because they just hadn’t gotten around to it yet.
The reality check here is that none of us know when our life will end and for some it is sooner rather than later. In a Psychology Today article on overcoming procrastination, Dr Radu Atanasiu suggests steps to help people overcome procrastination that include:
- Helping the client identify what matters most to them
- Evaluating the pros and cons of making or not making a will and estate plan
- Considering the advice they would give to friends and family in their situation
Your clients value their loved ones and take active steps to grow and protect their wealth, otherwise they wouldn’t be your clients! Putting a will and estate plan in place is just another step they need to take, just like taking out insurance, making an investment and selecting a medical aid option.
When family matters most, making a will is a logical first step. But a will alone may not be enough. Without an estate plan, the amount clients intend to leave their families can be reduced by estate costs and taxes. Their families may also face financial pressure while they wait for the estate to be wound up.
I don’t have enough
Having a lower net worth doesn’t mean a client has less need for a will and estate plan. Property, investments and retirement savings all need to be dealt with efficiently on death and preferably not reduced in value by taxes or costs such as estate duty and capital gains tax. Delays at the offices of the Master of the High Court aside, if your client has assets of any kind, including property, they need to have a will so these can be dealt with and distributed to heirs. An estate plan that provides liquidity for estate costs and funds to cover living expenses while the estate is being wound up can help protect your clients’ assets and provide financial support for their loved ones.
I’ve already named beneficiaries
Great. Policies and pensions need beneficiaries and they can provide much-needed liquidity to loved ones. But naming a beneficiary may not always be enough. A will is needed as well, as is an estate plan.
- Pension and retirement funds have to actively ensure all dependants benefit, which takes time and possibly reduces the value of a named beneficiary’s portion if another dependant is identified.
- Life policies don’t pay proceeds to minors. Naming a minor beneficiary causes more problems and delays unless a will names a testamentary trust.
- Many discretionary investments, such as unit trust funds, form part of the estate anyway, so beneficiary nominations may not apply.
Consider a client who believes their family will be provided for by the proceeds of a policy or pension fund. But what happens if payment is delayed while the fund’s trustees complete a dependant-tracing process? Their loved ones could be left without access to those funds for months. An estate plan can help bridge this gap by providing money for day-to-day living expenses while they wait.
It’s too expensive and complicated
Drawing up a will is inexpensive, often done for free in lieu of naming the drafter as executor or at the cost of a few hundred rands. Online tools have also made estate planning simpler, from assessing a client’s needs and calculating potential estate shortfalls to putting the necessary cover and documentation in place.
However, they are technical documents that have to meet all the requirements so expert help may be necessary. Advisers who are not fiduciary professionals have access to a number of services offering the required expertise, such as the 1Life Wills and Estate Plan. Behind the screens, technology, legal and fiduciary teams have designed a system to guide advisers and clients through the process so that a valid will is drafted along with an estate plan. If circumstances warrant it, such as when there are multiple businesses, assets in multiple jurisdictions and multiple beneficiaries, experts are on hand to help in person.
I don’t want to talk about it
Many clients are not comfortable thinking or talking about death. Making a will and estate plan requires some of this but the conversation is actually more about a stable future for the family than the end of life. When the talk is about protecting loved ones and focusing on a lasting legacy, there is less discomfort.
It’s a family affair
Wills and estate plans can give families a lasting legacy of financial security, which is always top of mind for clients. It pays to remind them of this to ensure their death doesn’t leave loved ones in financial difficulties. And when the will and estate plan is in place, it’s one less thing to worry about and one more way they can care for loved ones.