Banks big and small are teaming up with estate-planning software platforms to help clients take care of that most neglected item on the personal finance to-do list: drafting a will.
A growing number of financial institutions, including several of the big banks, some large credit unions and regional banks, are striking up partnerships with companies that help people create legal wills online for a fraction of the cost of hiring a lawyer. The arrangements often involve discounts for clients who sign up to draft a will.
While reputable online will-making software has been available for years, these partnerships are likely one sign of the financial industry’s effort to get ready for what has come to be known as “the great wealth transfer,” as the affluent generation entering retirement begins to pass on assets to their younger heirs.
“I think potentially there’s more at stake because of this wealth transfer for two reasons. Firstly, more wealth in the baby boomers and a more pressing need in the next generation – the millennials and Gen Z – needing that,” said Tim Hewson, chief executive officer of LegalWills, a web-based will-drafting service.
For bank customers, the nudge toward creating a will online often comes in the form of a price reduction on already affordable rates. For example, clients at Canadian Imperial Bank of Canada (CIBC), Bank of Nova Scotia (Scotiabank) and Alberta’s ATB Financial, get a 20-per-cent discount at Willful, another estate-planning platform where the cost of making a will starts at $99.
At OPPA Credit Union, which serves Ontario Provincial Police officers, employees and retirees, members can get a will done for $39.96 – almost $10 off the regular price – with LegalWills.
And at Meridian Credit Union, members get 20 per cent off with both LegalWills and Willful.
At Royal Bank of Canada, clients get a similar 20-per-cent discount with Epilogue Wills, another online platform where drafting a will starts at $139. RBC customers can also use the reduced rate to gift a will to a loved one, according to the bank’s website.
Completing a will online is similar to using DIY tax software. Customers click through a user-friendly interface that prompts them to answer simple questions about their circumstances and wishes. If you know who you want to name as beneficiaries of your assets; as the executor, the person in charge of distributing those assets; or as the guardian of your minor children, if you have any, the whole process can take less than half an hour.
The same websites also usually offer the option to create a power of attorney, naming someone you trust to manage your money and property, should you become incapable of doing so. You can also draft a similar document for decisions related to your health.
While the primary demographic using online will services is 30- to 40-year olds – particularly those who’ve just had children or bought a home – their popularity is also growing among seniors.
“We also have this secondary audience of boomers and retirees who either are creating their first will – they just never got around to it – or are on fixed incomes and they’re getting quoted $800 to $1,000-plus to update their will that’s been sitting in their filing cabinet for 30 years,” said Willful chief executive officer Erin Bury.
For the banks, making it easier and more affordable for customers to plan for and manage the generational transfer is also about retaining clients, Ms. Bury said.
“It’s a problem that I think is keeping most banks up at night. How do they keep assets within their banks? How do they retain clients on the wealth and financial planning side when that client passes away and family members might not have a relationship with the bank?” she said.
On its website, ATB warns clients that if they have a more complex situation – for example, if they own a business, have complicated family circumstances or hold dual citizenship – they may need more help to draft a will than a web platform can provide.
Those clients can turn to one of the company’s advisers for help in assessing whether they should turn to a lawyer to draft or update their will, said Trent Hamans, vice-president of private banking and wealth planning at ATB. The organization also provides referrals for customers who don’t have a trusted lawyer, he added.
But there are plenty of people who don’t need or want to see a lawyer to get their estate planning done, Mr. Hamans said. Online platforms have filled what was previously a “vacuum” for this group of clients.
“What these technologies do is they’ve really democratized the document generation piece for clients,” he said.
Erica Alini