Davide Pisanu: The hidden costs of death are hurting us all

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When you spend enough time in management, you begin to understand the cost of everything, down to the price of each item on the office fruit plate. But even the most financially literate Canadians are completely unprepared for the most inevitable expense of all: death.

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After two years working at the intersection of the financial technology and bereavement industries, I am no less afraid of losing loved ones, but I’m now also concerned about the financial and emotional costs of the paperwork left behind. Death imposes an immense administrative burden on those in mourning. After weeks of coping with the shock and personal anguish of a death, there are months, and sometimes years, of onerous tasks for the appointed executor, most often a close relative.

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There are hard costs associated with bereavement bureaucracy. We can only estimate the significant drain on public and private resources, but it is almost certainly in the tens of billions annually. Deep reforms are needed to ensure we stop wasting people’s precious time on tasks that could easily be automated.

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The executor’s challenge

Most working professionals have yet to experience the process of settling a loved one’s estate. They should know that a clear majority of executors report the tasks as among the most difficult they’ve ever been asked to perform in any context, let alone while mourning.

In a recent poll conducted by Maru Public Opinion for ClearEstate, nearly two-thirds (63 per cent) of Canadian estate executors surveyed said experiencing the death of a parent, spouse or partner was one of the most difficult mental health challenges they have ever faced; about half (47 per cent) said it disrupted their performance at work.

With an average timeframe of 18 months, estate settlement is hard on everyone, even those who are detail-oriented or good at math. We have spoken to lawyers, accountants, former Canada Revenue Agency employees and people with PhDs, who all confess to being simply disoriented by the process.

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There has been some progress made on the issue. The pandemic inspired an online estate planning boom, which is generally positive news and will lead to fewer inefficiencies in the justice system. However, the settlement process is woefully mired in the past and has barely been reformed in a millennium.

The hard costs of estate settlement

On average, an estate can expect to pay upwards of $8,500 in fees. This includes the cost of lawyers, accountants, probate, notaries and other professionals. But that’s only if everything goes smoothly from start to finish. If any party decides to dispute the will, costs multiply, especially if the dispute leads to a protracted court battle, in itself expensive for both individuals and the government.

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If time is money, consider that it takes an average of 400 hours to deal with all tasks related to analogue estate settlement. Further, about 0.8 per cent of the population in North America dies every year, and the hidden costs related to settling those estates each year amounts to about $15-16 billion. Nearly all of that time taken away from us to settle an estate is unproductive, serving no clear purpose and creating no wealth or even tangential benefits for society at large.

Estate settlement also increases liabilities within families. Many beneficiaries inevitably get frustrated, suspecting executors aren’t moving fast enough or otherwise feel cheated when it’s the process itself draining the family resources.

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Although it is difficult to avoid being named executor of a loved one’s estate, at an organizational level businesses can reduce the impact on workforces through bereavement benefits or other wellness plans. It’s more difficult to precisely measure the toll estate settlement takes on the mental health of each survivor.

Grief can be overwhelming. If most people say losing a family member is one of life’s most difficult challenges, why during this time should anyone be expected to perform estate executorship duties that confound even highly trained professionals? In the midst of hundreds of hours of paperwork and managing difficult family dynamics, how can workers be expected to perform with any degree of focus or enthusiasm?

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The average bereavement leave for employees is inadequate — typically two to 10 days depending on jurisdiction, hardly enough to make a dent in the paperwork. Working people in mourning don’t have enough time to heal, and their employers often don’t see the toll that bereavement-induced presenteeism, or working at a reduced capacity, takes on their workforces.

Death and taxes are said to be the most inevitable features of life, but when unsuspecting Canadians in the prime of their lives are named as executors in the wake of a family death, dealing with both at once while navigating the bewildering probate process makes for one truly cruel chore.

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The enduring taboo around death makes the planning and settlement processes inevitably unappealing; we’ll never be ready for it. It’s time for governments, courts and financial institutions to take a compassionate approach and begin finding efficiencies to eliminate the hidden costs of death that are hurting us all.

Davide Pisanu is co-founder and CEO of ClearEstate, an estate settlement platform founded in 2020. Previously, he was the co-founder of the Montreal-based consultancy Juniper, senior vice-president with Cirque du Soleil and a lecturer at McGill University’s Desautels Faculty of Management.