What is estate planning anyway?

“Estate planning” is a nebulous phrase, appropriated by all manner of professionals and institutions.  This has made things confusing not only to the general public, but to those operating within the field. As an estate planning lawyer, I’ve found myself frequently revisiting my own definition of estate planning, trying to dovetail it within the geography of other kinds of planning, particularly services offered by the financial professions.

A hundred years ago, estate planning was arguably the sole preserve of lawyers, bundled up – at least from a lay perspective – in a few key documents: A Will, perhaps a trust, possibly a power of attorney, and some supporting material. To boot, structured planning would have been skewed toward the wealthy. 

By the 1920s, the advent of personal income taxation gave accountants a much more active role in personal finance. And in the half century or so following, investment and insurance professionals similarly evolved, and their entrepreneurial efforts further expanded the availability of wealth management expertise to the mass market. 

Today there is a very good argument to be made that the majority of estate planning is now done as an accessory to financial decision-making. Case-in-point, many Canadians’ principal wealth is in one or more registered savings plans, the remaining value of which will pass to a named beneficiary at death – and you don’t need a lawyer or a Will for that.

Of course, that’s a fairly narrow view of estate planning as strictly centring on death. In truth, it is about understanding one’s roots, relationships and responsibilities, and using that knowledge to make plans to care for oneself and for others, now and in future.  

Nonetheless, the question begs an answer: Has estate planning really just become the death footnote to a more glamorous successor, financial planning?  Certainly not.  

While a classic legal-centric view of estate planning may be past its time, the legal element – the expectation and confidence that a person’s intentions will be upheld – remains its defining characteristic. In other words, legality equals certainty.  

From that perspective, attention is drawn away from the strategies engaged and documents produced (necessary though they will be in the end) and focuses more appropriately on the analysis and advice of allied professionals engaged in open communication. Just as the person’s relationships are the foundation for the estate plan, the various advisors’ (legal, accounting and financial professionals, etc.) relationships are central to the effectiveness of its implementation.  

Ultimately, it’s really not relevant which professional leads this process, but it is critical that all available expertise is brought to bear.