* Boomers seen inheriting C$1 trillion in next 15 years
* Advisers look to insurance, trusts, beneficiaries to protect wealth
* Risk of losing clients upon inheritance looms large
By Andrea Hopkins
TORONTO, April 3 (Reuters) - The looming shift of money to and from the baby boomers promises to be the greatest intergenerational wealth transfer in history, and Canadian financial advisers are looking to investment and insurance strategies to help clients hold onto their money.
A Decima Research study found Canadian baby boomers are expected to inherit C$1 trillion ($906 billion) from their frugal Depression-era parents in the next 12 years, just as their own cash-strapped offspring look to them for help to get a start in life.
"Advisers like myself are typically working with the people that will receive the money and be giving the money -- the sandwich generation," said Brian Burlacoff, a certified financial planner at Sun Life Financial in Toronto.
As in most industries, baby boomers make up the bulk of clients in wealth management. With the front of the boomer wave turning 68 this year and the peak in their mid-50s, the challenge of inheriting money and planning for their own estates is becoming a top priority for clients and advisers alike, in part because advisers risk losing much of their own business if their clients' heirs take their money elsewhere.
Burlacoff and other advisers are looking to a mix of strategies, from naming beneficiaries to creating trusts to using insurance products to guard against tax and probate costs for their clients. No longer is a simple will the best way to go.
"There is a lot advisers can do way ahead of time, over the next three, five, even 10 years, to preserve the net amount of inheritance as much as possible," said Doce Tomic, chief executive of Credential Financial, a wealth management firm serving credit unions and independents.
While a will was probably the only estate planning members of the Greatest Generation bothered with, financial advisers said boomers can still take a few steps now to ensure their parents' wealth is protected before death.
The most obvious is making sure there are named beneficiaries to financial assets, which can avoid the costs and delay of probate. Moving financial assets from an unregistered bank account to a registered tax-sheltered account can also save probate taxes.
Advisers should also outline the best options for clients who want to give money to offspring but fear running out of money themselves in old age or losing control of the money to an heir.
"The gifting of assets -- passing on funds to an adult child before your death -- may become more common with the boomer generation," said Chris Buttigieg, senior manager of wealth planning strategy at BMO Financial Group.
"The risk is giving too much and not having enough left over to sustain your retirement."
Insurance products are one way to go. Mortgage insurance, which pays upon death, can ensure heirs inherit a residence debt-free. A life insurance policy, while expensive late in life, can guarantee an inheritance to a named beneficiary as long as the policy-holder can keep up the premiums until death.
Trusts, which can distribute money both before and after death, are good for bigger estates.
"A trust is something that can be used as a tool to give capital to heirs ... but the client can still live off the proceeds of assets inside the trust," said Mark Yip, investment adviser at Servus Credit Union in Leduc, Alberta.
Other popular options, like naming an heir as a co-owner of a residence, are riskier, said Ken Huggins, senior wealth adviser at Meridian Credit Union in Pickering, Ontario, because the home would then be vulnerable to creditors if the heir gets into financial trouble.
Yip believes boomers will bring another change in estate planning: the desire to give more living gifts, so that they can see the enjoyment their money brings to heirs. He said the risk is that they give too much too early, not appreciating how expensive long-term care might be in old age or ill health.
"I take a very neutral stance, because it's a delicate subject. I talk about the pros and cons and worries I have, but at the end of the day it is their money. I do offer to sit with their children as well, in hopes of educating them," Yip said.
From an adviser's point of view, one of the biggest risks is the loss of business upon the death of a client. Even if an adviser has meticulously planned the estate and managed the assets well, the heirs often take the capital elsewhere.
"In a lot of cases it doesn't matter how good of a job you've done, the kids may decide to go with whoever they deal with. All you can do is focus on looking after them and make sure the kids know you are looking after them," said Huggins.
He also dispenses with the minimum asset requirements that some advisers might use to weed out unprofitable clients, taking on adult children of current clients in order to build a relationship before inheritances happen.
"A lot of practices don't function that way, but I just end up saying, 'I'd like to deal with your kids, send them to me,'" said Huggins. "Otherwise you risk losing people altogether." ($1 = 1.1038 Canadian Dollars) (Reporting by Andrea Hopkins; Editing by Leslie Adler)