If you’ve been in the industry for some time, you’ve likely experienced the loss of a client. It may not be easy knowing what to do or say, but there are immediate steps you can take to help reduce the executor’s risk, provide value to the family, and develop long term relationships with beneficiaries. Below outlines the important role you can play in the estate administration.

Offer condolences.

Send flowers, write a card, and show support.

Meet with the executor to obtain required paperwork.

Required documents may include the death certificate, last will and testament, any codicils (if applicable), and other pertinent documents.

Review the investment accounts.

Review accounts to determine if any will pass outside of the estate by way of beneficiary designation or though joint ownership. Review the will and related documents and confer with your compliance department prior to making any changes to the accounts.

Print statements for the executor.

Be proactive and prepare statements including account values as of date of death and a summary report of income and expenses up to date of death. The executor will require these statements when preparing the T1 Terminal Return for the deceased.

Update the mailing address and contact information.

Mail may need to be redirected for the deceased’s accounts. Refer to instructions from the executor.

Review investments held within the estate with the executor.

Identify items that require immediate attention, such as rights offerings, stock options, or an upcoming shareholder vote. Help the executor determine if any changes should be made to reduce the risk of investment loss prior to estate distributions (1)(2). The following factors, among others, may be considered:

• Time horizon: although the administration of an estate can be lengthy, it will likely not surpass an entire market cycle. Most estates can be administered within two to three years with possible interim distributions occurring after a period of months. Selling investments to process a distribution during periods of volatility can reduce the total amount available for beneficiaries and expose the executor to liability.
• Estate debts and expenses: the type, amount, and timing of any anticipated outflows of the estate.
• Whether any trusts are to be established: trusts may extend the anticipated time horizon.
• Number of beneficiaries: an estate with several beneficiaries may benefit from a lower risk profile than an estate with one or two beneficiaries that are aligned in thought and risk appetite.
• Type of beneficiaries: unique beneficiaries, such as charitable organizations, will require additional considerations. Distributing appreciated stocks to a charitable beneficiary, for example, may reduce taxes payable and may be worth the risk of market volatility. Legal and tax advice should be considered.
• Beneficiary preference: although executors are exposed to potential liability, they may choose to consider the preferences of the residual beneficiaries when contemplating any changes to the investment mix.
• Types of assets held: a low-risk portfolio may require less changes than a high-risk portfolio.
• Tax impact at death: unless rollover provisions apply, most assets are deemed to have been disposed at fair market value at the time of the owner’s death.

Offer to meet with residual beneficiaries.

Beneficiaries may be unprepared to manage their inheritance. Providing guidance early and often will help to establish strong and trusted relationships.

Be aware of meaningful dates.

This may include the birthday or the anniversary of death of the loved one.

Regularly check-in with the executor.

Discuss upcoming distributions, anticipated expenses, and major milestones in the estate administration.

Losing a loved one is hard. Understanding your role and helping to navigate the complexities of an estate administration can be one small way to ease the burden on the family. If you need assistance with navigating these discussions, reach out to Guardian Estate Company. We partner with independent investment firms to provide will and estate advisory services to clients and their families. Contact us to learn more.

(1) Although the executor derives authority from the will, some investment firms require the grant of probate prior to accepting instructions to sell or change assets held by the deceased. Consider your firm’s internal policies when discussing potential investment changes with the executor.

(2) An executor can be held liable for the loss of investment value during an estate administration. It is recommended that an executor discuss their role and potential risks with a qualified estate lawyer.

The above is for general informational purposes only. It is not intended to be legal or financial advice. We accept no liability for any losses arising from use of the above information. We recommend you speak to your compliance department and seek legal advice as necessary to obtain specific guidance regarding each unique situation.