Be careful whose advice you take.

Today I met with a client to do some estate planning. Recently, the client had phoned her bank to ask some questions about using an Enduring Power of Attorney. Here is what she was told: "You can use the Enduring Power of Attorney to roll the RRSP [which had designated beneficiaries] into an estate account." I was horrified.

What complete crap that advice was. Why? 

1. If there is an estate account, the owner has died and therefore the POA is no longer valid. 

2. When an RRSP has a designated beneficiary, it doesn't go to the estate. 

3. A person acting under a POA cannot change a beneficiary designation by ignoring existing designations and just placing the funds elsewhere.

4. The word "roll" suggests a tax-free or tax-deferred movement of funds from one owner to another. If an RRSP goes into an estate, it is taxable.

In other words, every single part of that person's advice was absolutely incorrect. I should probably mention that the client had spoken with someone at the bank's call centre and not a qualified financial advisor. But that is exactly who clients reach when they call the bank with questions, isn't it? It is beyond belief that person works at the call centre of a major bank, giving out false information to dozens of people a day. How have the banks not been sued already? How many unsuspecting clients have ended up in legal hot water because they acted on legal advice from people who had no idea?

I know lots of bankers and plenty of them know plenty about estates. But they are not answering calls at the call centre; they are meeting clients one-on-one to give proper financial advice.

So what is the take-away here? Simply put, ask the right people when you need advice. If you want to know how to use legal documents, ask a lawyer. If you want to know how to invest money, ask a financial advisor (including the ones at the banks). If you want to know about tax, ask a tax accountant. 

And in every case, if the information doesn't seem right to you, get a second opinion.