Excellent article on issues with Estate Planning in NZ. Click here to read.
We have blogged before on the importance of insurance advisers helping clients identify Estate Planning issues when planning insurance needs. We have seen several cases over the last few years where poor Estate Planning has affected the desired results of Insurance Plans.
We review insurance advice provided by hundreds of advisers each year and we see that most Insurance Plans (Statements or Records of Advice) include a section on Estate Planning.
The most common process we see is that the advisers asks questions of the client about their current Estate Plans; “do you have a Will/EPA/Trust?” If a client answers “yes” to a Will or EPA then most commonly the adviser moves on, without checking any details.
Not often do we see advisers asking, “What does it say?”, which is worrying because the Will is actually the persons wishes when they die, and may contain events that need funding, such as the kids being appointed a Guardian or division of property between family members, or the handling of business ownership or requirements for children from a previous relationship.
We don’t often see any questions about if the Will or EPA is current. There is a chance that if a Will hasn’t been prepared correctly, or there has been a change in relationship status, or not reviewed in the last few years, it may not be effective in the event.
Then we see in the Insurance Plans, or recommendations, with standard wording along the lines of; “If you don’t have a Will/EPA we recommend you see your Lawyer or a Trust company, if you don’t have one, we can recommend one.”
Then the insurance goes in place and Estate Planning is never mentioned again… or until claim time and by then it’s too late to check if it is correct.
We believe it is worth the effort for advisers to spend some time on this important area with clients. Clients want certainty from their Insurance Plans, and uncertain Estate Planning could jeopardise the outcomes for your clients.
Attached is our Guide on Estate Planning for Insurance Advisers. Click here to download.