High-net-worth Canadians typically have more complex financial pictures and they can benefit from private banking services, including estate planning. “Often times, a private banker is the catalyst for those conversations,” says Kim Mason, executive vice president and head at RBC Private Banking.
High-net-worth individuals may have built substantial and diverse assets over decades. They may own large non-registered investment accounts, multiple properties across different jurisdictions and businesses. For some, family dynamics or having a blended family may also add complexities to their financial decisions.
A will, on its own, may not fully address all these intricacies or ensure that allocations of assets truly reflect any intentions to treat all beneficiaries fairly after someone passes. That’s why more comprehensive planning is essential.
Ms. Mason notes that private bankers work hard to understand each client, their families and their goals, all to create strategies that are customized to their financial situations. Estate planning is an important piece of this puzzle, she says.
“An estate plan is really the overarching plan that the will sits within,” Ms. Mason explains. “It includes how you’d like the will to be executed and how you’d like family members to be engaged, and it typically includes a list of qualified professionals—like the accountant and lawyer—to be called upon to support the family.”
Many plans can fall short or lack personalization, says Tony Maiorino, vice president and head of Family Office Services at RBC, which partners with RBC Private Banking to support many high-net-worth Canadian families. “You’d be surprised how many high-net-worth individuals don’t have a fully thought-out estate plan or one that doesn’t address the many unique aspects of their wealth and family circumstances.”
Even if they do have a solid plan, another risk is it may be outdated, he adds. That can be problematic, so it’s generally recommended that estate plans be reviewed and updated, if necessary, every three-to-five years. While individuals might recognize the need, the task seems daunting.
“We often encourage clients that the planning process is about being in control of the pen that writes your final chapter, versus letting someone else do it for you,” Mr. Maiorino says.
He suggests it might start with a simple question: what do you want to happen when you’re not here? From there, private banking and integrated planning help to ensure assets are aligned with a will’s intentions.
“If the plan and the will are designed in isolation, you risk the will stating one thing while the structure of assets leads to another,” Mr. Maiorino says.
A family cottage is a good example, he explains, of how estate planning can ensure the will’s intent is carried out as planned. “We might recommend a life insurance strategy to help offset the taxes that would need to be paid, so the cottage ends up being transferred to the children versus having to be sold.”
Private banking excels in this respect, helping clients access experts who can tailor solutions that could include whole-life insurance, with the right planning advice and tax strategies to match. Clients can also benefit from concierge-like services, including appointing professionals to serve in the roles of executor and power of attorney.
“Often, individuals name family members or trusted friends, but these roles involve more work than people appreciate,” says Leanne Kaufman, president and CEO of RBC Royal Trust.
The more wealth a client has, and the more complex their family structure, the greater challenges an executor can face. Through private banking, individuals can connect with experienced professionals who can help to navigate these challenges and make sure estate plans are executed precisely.
“This is what we do every day,” Ms. Kaufman says. “Especially with large estates and complex families, hiring an independent, neutral third-party like us helps keep the waters calm.”
While the size of their estates may be significant, the goal for estate planning is the same as for anyone else: to ensure their wishes are carried out and that their loved ones are taken care of after they’re gone.
With the help of private banking, solid estate planning leaves no stone unturned. “What most people want after they pass is to be remembered fondly, while maintaining harmony across their family,” Ms. Kaufman says.
“A comprehensive estate plan helps make sure those final wishes indeed come true.”
