Estate planning services: the ongoing value proposition

14 July 2017

Gil Gordon CFP® examines the challenges families face when tragedy strikes, and the role planners can play in helping their clients through this emotionally difficult time.

In my last article – A new approach to estate planning – I introduced the notion of a client information vault that is updated annually with clients, thereby introducing the notion of estate planning as an ongoing service to clients.

This article will focus on the reality of how well a client’s family can cope when tragedy strikes, as well as introducing two new engagement ideas to share with clients. The estate planning adviser will be proactive and build an ongoing client value proposition based around preparing and maintaining the ‘Information That Matters’ and a ‘Crisis Management Plan’ for clients.

A very bad experience

Studies1 have shown that the loss of a loved one can be the single most traumatic event in the survivor’s life. Further, there has been shown to be an increase in incidents of major depressive episodes, panic disorders and post‑traumatic stress disorder (PTSD). Most tellingly is the increased confusion and loss of higher order reasoning function associated with these events.

In short, when they lose a loved one, people are confused and commonly far less capable of making good decisions. Yet at this exact moment, the surviving partner or children are normally called upon to take charge of events and understand concepts that would be challenging for them at their very best.

In my experience, most clients are highly aware of what it feels like to experience the loss of a loved one and are genuinely worried about the burden associated with this event. The financial planner who can show how they are prepared to guide the family through this period, has a very powerful value proposition indeed, and can permanently transform their client relationship from product adviser to trusted adviser.

An ongoing value proposition

I have already spoken of a revised definition of estate planning, namely: The right information, the right guidance and the right money to the right people at the right time.

The ongoing opportunity becomes clear when we realise that modern estate planning has three elements:

  1. The legal instruments – wills, PoAs, superannuation nominations and so forth;
  2. The information that matters that is required for someone to assume control of the estate; and
  3. A crisis management plan for the family to follow once crisis has struck.

Our profession is used to being held to account for the quality of the advice we provide to clients. We educate them about pitfalls, obligations and risks, and understand the value of advice that guides clients through these difficulties.

In the case study example (see below), Myra was simply unaware of her obligations as executor. The solicitor could argue that he/she was not asked to provide this type of advice to the estate’s executor but regardless, Myra is still left out of pocket and extremely upset by the lack of support.

She would also be acutely aware of not wanting to be a burden on her own children in a similar situation and herein lies an advice opportunity.

Case study: An executor sued

John lived in Moree. A divorced exshearer and farm hand, he had two sons whom he hadn’t seen in several years. He spent most of his days in the local pub, where he worked part-time cleaning up. John’s only sister, Myra, lived in Western Australia and while they spoke once or twice a year, they were not particularly close.

Two weeks after his 67th birthday, John died of lung cancer relatively quickly. Myra was not able to be at his bedside for his passing and John’s sons arranged the funeral.

Myra received a letter from a Moree solicitor four weeks later, informing her (to her surprise) that she was the executor of John’s estate. The letter informed her that she should contact the children who were the named beneficiaries and begin the process of identifying and realising the assets of John’s estate.

Myra had no idea where to start and was not able to get away from work for a couple of weeks.

She eventually rang John’s sons, flew to Moree and began the process of collecting paperwork, superannuation information and bills. Ultimately, this process took around four and half months, most of which happened from Western Australia. In that time a local grass fire spread to the house and burned it to the ground.

Dismayed, Myra sorted through John’s paperwork to find that the house insurance had lapsed two weeks after his death.

Myra contacted the insurance company to be told that due to non-payment of the premium, the house had been uninsured for more than 90 days, so the policy had therefore lapsed and they would not pay the claim. The house had been uninhabited for more than 90 days and under the terms of the policy, the insurer would not have paid the claim, even if the premium was paid.

Myra spoke to the solicitor to discover that as executor, she was legally obliged to properly protect the assets of the estate (it is widely accepted that this means properly insuring estate property, such as houses and cars). Failing to have in place the appropriate insurance meant that she could be held legally liable for the value of the house.

Upon hearing of the fire, John’s two children sought legal advice and took action against Myra for her …failure to properly execute her duties as executor of the estate of the late John XXXX”. Myra was unable to use the other assets of the estate to settle this lawsuit, as they ‘belonged’ to the beneficiaries, not her.

As is often the case, Myra settled the matter out of court and had to borrow more than $75,000 against her own house (and contribute $25,000 from her savings) to pay her nephews’ and her own legal bills.


When you examine the obligations that fall on someone who acts with a Power of Attorney or in the role of executor, there are many such risks and opportunities to render support. However, there is a major error in assuming that clients will not value that advice until such time as the trigger event is upon them.

How to build a Crisis Management Plan

Our practice produces, via the EPFL system, a document called the Crisis Management Plan, which addresses the following questions:

  • What documents do I need to find?
  • Who do I need to call?
  • What do I need to ask them?
  • What’s important?
  • What can wait?

Typically, there are four ‘estate events’. These are:

  1. Temporary disability;
  2. Permanent disability;
  3. Terminal illness; and
  4. Death.

We therefore detail what documents are required, should one or more estate events befall the family (Table 1).

Table 1

Event Documentation required
Terminal illness Certified copy of:

• Power of Attorney (POA)

• POA’s driver licence

• POA’s birth certificate or passport

• Disabled person’s driver licence

• Disabled person’s birth certificate or passport

Death Certified copy of:

• Will

• Death certificate

• Executor’s driver licence

• Executor’s birth certificate or passport

• Deceased driver licence

• Deceased birth certificate or passport

• Domestic partner’s driver licence

• Domestic partner’s birth certificate or passport

• Marriage certificate

• Driver licence and passport or birth certificate of any beneficiaries


We recommend that advisers not only list these documents, but also provide a vault service to their clients and store certified copies of these important documents. Once clients become used to the service provided, they will come to rely upon it. I have been asked on many occasions by active clients to provide copies of passports or title deeds. They can always log into our vault software to access the documents but seem to prefer calling or emailing us directly.

Secondly, we need to provide the clients with a prioritised set of questions to raise with the relevant advisers (Table 2).

Table 2

Superannuation questions table

As an example, the question – To minimise tax, should the superannuation fund be cashed out before death? – has no correct answer. If dad is still married, the benefit typically will be paid to his spouse tax-free, but from 1 July, with the removal of anti detriment benefits, adult children will benefit greatly from asking this question very early on in the piece if their dad is unmarried.

In its simplest form, this is a simple checklist of issues but it also acts as a framework to guide an executor through one of the most intellectually difficult periods of their life. In the event of an estate dispute, this document also acts as proof the executor followed a rigorous and thorough process.

As planners, the technical skills we bring are assumed, but it’s been my experience that clients take immense comfort in knowing that we are prepared for the emotional journey that our clients will be taking.

The Crisis Management Plan has prioritised question sets for all the different ‘Estate Elements’ present in our client’s world.

Taking Action: Please email us via the website and ask for an extract of a sample Crisis Management Plan.

More engagement ideas: Two problems and more solutions

In the last article I wrote – A new approach for estate planning – I provided two scenarios that we use in our practice to illustrate the potential benefits of testamentary trusts. Here are two more.

  1. Asset protection

In many cases, if a beneficiary inherits money, they would like to use the funds to reduce or eliminate their mortgage. However, if those beneficiaries are subject to business or other financial risk, the act of repaying debt may place their inheritance at genuine risk. So, rather than passing funds directly to the children, they could be passed in trust form, which can act as a bank by taking a mortgage over the relevant property. This is known as a debt shield.

Family home unprotected

new ep slides

Protected by loan to Trust

Protected by loan to trust chart

  1. Spouse protection

Another common issue raised in our practice is the ‘blended family’, wherein the client wants to provide their spouse with a roof over their head but still pass their ‘share’ of the house and the money to the children of their first marriage.

The following graphics illustrate the problem and a possible solution.

What I want to happen

Spouse protection chart 3

What worries me

Spouse protection chart 4

A protective trust

Spouse protection chart 5

The majority of couples purchase property as Joint Tenants and this makes perfect sense, as the property passes quickly to the surviving spouse outside of the estate. However, the property then becomes exposed to the risk of the surviving spouse re-partnering and getting divorced. Severing the Joint Tenancy will automatically create a Tenants in Common ownership2, thereby making that percentage ownership an asset of the estate controlled by the will.

The will can then grant the surviving spouse a Life Interest, providing a place to live but holding the ownership of the property at a distance from any divorce risk. This strategy can be executed in a variety of ways, depending on the age of the children and family involved.

But I don’t have enough money

I sometimes hear the argument that a trust makes no sense for younger people with a small asset pool. However, in this day of universal super and default insurance, I feel this argument lacks authenticity. Certainly, once a client receives life insurance advice, it is highly probable that a substantial estate will exist, should premature death occur.

Taking Action: Please email us via the website for a copy of these graphics.

A reminder: these ideas have merit but need to form part of legal advice delivered by a qualified legal specialist. The adviser’s job is to facilitate an outcome, not provide legal advice. Specialist estate planning lawyers are very comfortable and skilled with these structures.

In closing

Please feel free to download some of the resources from our web page – – and start talking to your clients about this subject.

  2. Severing tenancy is exempt from Stamp Duty in NSW (and many other states) and there is a specific stamp duty exemption for the process. Legal and registration fees are typically only a few hundred dollars.
  • You may also be interested in