Episode 66 - Wills, AI, and Cybersecurity with Steve Parr
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Nicole 00:00:02 Hello and welcome to Your Estate Matters presented by Heritage Trust. Your Estate Matters is a podcast dedicated to everything estates, including building and preserving your legacy. If it's estate related, we'll be talking about it. We're having the conversations today that will help Canadians protect their families, their assets and their legacies tomorrow.
So Steve, thank you so much for joining us.
Steve 00:00:34 It's great to be here.
Nicole 00:00:35 You have a really interesting background. You were an entrepreneur before. You were a lawyer. You built and sold a vacation rental property. Then you went to law school and launched PA Business Law. How has that entrepreneurial background shaped how you advise clients?
Steve 00:00:49 Well, first and foremost, it means that I'm an entrepreneur. So that's the pathway that I've gone down. And actually the order in your introduction is a little bit reversed. So I actually completed law school, completed articling, I was called to the bar and then I started my vacation rental management business. So I took a bit of a detour, and I got out of law and then got back into it a couple of years later.
Steve 00:01:07 So by that point, I was in love with being an entrepreneur and with what it meant to start your own business, to run it, to basically just have the kind of freedom and autonomy that comes with business ownership. But I also very quickly understood how much risk was involved and just how difficult it was and how many, how many different possible failure angles there were to continually navigate.
Nicole 00:01:33 So now you operate it at the intersection of corporate and estate planning. Tell us how these areas are so deeply connected for business owners?
Steve 00:01:41 Yeah, absolutely. So it kind of came about organically in my own practice. I started and I did nothing but corporate for 4 or 5 years. And then gradually, of course, my clients started asking for estate planning. They started asking for wills, for powers of attorney. They started asking questions about insurance. I didn't have the answers to these questions, but I just noticed the pattern and saw that it kept coming up again and again. And it all comes down to risk.
Steve 00:02:08 It all comes down to the uncertainty of what's going to happen in the future. And we're all wondering, you know, we all don't know how long we're going to be here for, and we don't know what's in store for us economically, relationally and with our health. And so my clients started to come to me with those questions. The two areas are deeply interconnected. The stability of your business depends in many respects on your ability to embrace discomfort, of addressing an unknown future. So if you're able to project yourself into the future through the types of agreements that we work on, whether it's your will, your power of attorney or your shareholders agreement that's providing you with a level of insurance and protection that you won't be able to get otherwise.
Nicole 00:02:52 So business owners are, you know, increasing turbulent time. There's tariffs, trade uncertainty, AI disruption, rising costs, cybersecurity threats. Like what are you hearing from these clients and what's keeping them up at night?
Steve 00:03:06 I mean, what's not keeping them up at night these days? There's so much uncertainty in the environment right now politically, economically, with AI, everything.
Steve 00:03:13 And it's funny, you know, it's particularly with AI, I've noticed a couple things going on. One, there is more anxiety, but there's also more excitement. I'm seeing that a lot of business owners are up all night, but partially because they're just so excited to be retooling their businesses and learning how to incorporate agents and all these other advantages that AI is bringing to the marketplace. But that's also mixed with a fear of being left behind. They're trying to keep up. They're trying to not be overtaken by some unknown competitor or have their business, their job, their entire industry, swept up and just consumed by one of these AI giants. So that's, I would say, the biggest piece of practical uncertainty that business owners are dealing with right now. And it does make it difficult to plan for the future. But there are some certainties that we all need to plan for, so that part hasn't changed.
Nicole 00:04:08 So let's talk about the risk management fundamentals. So what are the basics? So a lot of people…they're busy.
Nicole 00:04:15 They're getting up in the morning. They're like taking care of kids. They've got aging parents. They're making payroll. What are the fundamental things that they should be putting in place regardless of industry or size for sure.
Steve 00:04:26 So I mean, the basics will just come down to the most personal level is your family. So we're talking about a will and a power of attorney and a health care representation agreement. And any goodwill should, of course, make provisions for your children. So we're talking about a guardianship plan. I often see plans that don't really go deep enough. They might name one person, but they don't really consider, okay, what are the values of this individual that I'm appointing where they live? What happens if that person's circumstances change? Is there a backup in place? And then thinking through, well, how should we provide for the children? You know, it's one thing to name a guardian, but then how do we want to provide for them financially, both when they're minors and then when they become adults.
Steve 00:05:06 Young adults and start to interact with the world. Do we want that child to be receiving everything at age 19? For most parents, the answer is no. And so we need to work around that. So the will is very important. The power of attorney and representation in agreement. Those are called incapacity planning documents. And so those documents are going to help you deal with an emergency, a situation where you're in a hospital, you don't know how long you're going to be there for. And again, you need to provide for your family and your business as well.
Nicole 00:05:33 Let's talk about the business piece. So every Canadian should have those three fundamental documents. But if you're a business owner, what are the additional fundamental things they should be thinking about?
Steve 00:05:44 I'd say insurance is probably top of the list, followed by a shareholders agreement. Those two items go hand in hand insurance, of course, just to simply provide liquidity. So we're talking about disability insurance. Your business is likely the biggest or perhaps even the only source of income in your family.
Steve 00:06:01 So if you, as the director and primary shareholder of your business, don't have disability insurance in place, then that's putting your family at risk. The other types of insurance that you would want to be looking at are key person insurance, cross-sell, buy sell insurance. So forgive the jargon, but basically that just means if you're in a cooperative business, you have other business partners, other shareholders in that entity, then you would want to have insurance in place so that if if you pass away, then there's life insurance available to enable the other surviving shareholders to buy out your stake and provide your family with the money that I was expecting to earn from your role within the business. So those pieces are very important as shareholders agreement is sort of like the document that provides the recipe for all of those different anticipated and unanticipated outcomes.
Nicole 00:06:49 So it's kind of like the will for your business, like what happens if someone dies. What happens if somebody is disabled? What happens if someone divorces? What happens if somebody becomes insolvent? What happens if they stop getting along? It's the framework of what to do.
Nicole 00:07:02 Why do you think so few businesses get organized to get an actual shareholders agreement done.
Steve 00:07:08 Well, it's tempting to blame the client, but I think we need to take some responsibility as service providers as well. You know, as lawyers, as accountants, as financial planners. These are difficult conversations to have with our clients. But really, this is one of the areas where we are in a position to provide the most and the deepest service to our client, because nobody really wants to deal with these things. The shareholders agreement or the will, the will is a little bit easier to approach because it's more straightforward in some respects. And the shareholders agreement, of course, always involves other parties. But the reality is, it's absolutely critical and it's critical for the stability of your family and unknown circumstances. So I think clients don't want to deal with it because of this perceived complexity and the sense that it's an unknown in terms of how long it's going to take and how much it's going to cost.
Steve 00:07:54 So as service providers, we can provide more clarity around it by providing more direction around what the shape of that should look like and how the different parties should be communicating, imposing some timelines and just generally just moving the process forward in an expeditious manner.
Nicole 00:08:10 So let's talk about what's new. Like those are the fundamentals. But the risk landscape in 2026 is different than even five years ago. So with all the cross-border trade and legal and structural changes, how do business owners build resilience with increasing uncertainty?
Steve 00:08:27 I mean, it does vary from industry to industry, but I would say it's about not having all of your eggs in one basket. You know, I'm a business lawyer and I work with thousands of clients. And, you know, unfortunately, yeah, I have seen the reality that some of my clients have been hit very hard by the tariffs and by the inability to sell into certain markets or to import from other markets. And that's a huge risk. Somebody that I've worked with recently who's actually not a client but a partner, he went through a whole bankruptcy proceeding as a result.
Steve 00:08:58 You know, Covid had a similar kind of effect. So this sort of uncertainty is becoming the norm. So I think the new methodology or the new way of being as an entrepreneur, is that you need to be adaptable to change more than at any other time in your life. It's even true for regulated professions like lawyers and accountants. You know, we're getting swept up in AI like everybody else, and it's rapidly changing how we practice, how we can deliver services to our clients. You need to be able to change and you need to be able to adapt. So I would say the biggest thing is just to not stick your head in the sand and to reach out to other people who can assist you with that transition.
Nicole 00:09:43 Let's talk about one really scary risk, which is cybersecurity. So anthropic even held back the mythos model because it showed so many vulnerabilities in basically all the major software that runs our business in internet systems. What should, in this very scary, uncertain time, what should business owners be thinking about in terms of trying to mitigate the risk around cyber issues?
Steve 00:10:07 Well, insurance for sure.
Steve 00:10:09 I mean, the reality is that the most brilliant minds in the world are producing these models that we can't keep up with. Like you said it yourself, Anthropic held back the release of mythos. OpenAI has similarly powerful models, and it's an arms race right now. And the average consumer or small business owner, there's no chance that they're going to be able to keep up with that. And I would think it would be naive to think that your IT provider as well, like, of course, they can take many basic steps and even advanced steps to provide protection for your business, but you need insurance and you need to make sure that you're paying careful attention to the policy exclusions on that. Because every type of cyber insurance is going to require you to do certain things, whether it's…not use AI in a certain way or to ensure that you have multi-factor authentication or other protocols in place that provide more security for your business.
Nicole 00:11:05 So it's funny, through the lens of being a business owner that holds conduct well over $100 million of client funds.
Nicole 00:11:13 We have active cyber security, serious issues, cyber insurance is hard to purchase, and the limits that they provide are not necessarily that high. So it's an area of increasing complexity. And, you know, given the unknowns, it's not necessarily an easy product to buy. And getting the coverage you want is not necessarily a slam dunk.
Steve 00:11:37 Yeah. Yeah, I can imagine, particularly in your line of work that that's yeah it's challenging.
Nicole 00:11:42 So let's go into AI. So as we said it's creating increasing opportunities but uncertainty. So let's talk about that like it's creating opportunities but it's also creating operational risk. Like how do you see clients dealing with that on the ground with all the change.
Steve 00:12:00 Yeah I mean with the opportunities it's endless. You know, I find that AI is very much a bit of a Rorschach for how you view the world. And of course, there's every reason to be afraid. There's absolutely every reason to be up at night and to be anxious over your job, because that's an obvious reality that is coming to bear.
Steve 00:12:21 But there's also the opportunity for innovation at a scale and a timeline that is unprecedented. And I'm seeing that inside of my own practice. I'm seeing it inside of that of my colleagues and clients and other business owners that I come in and interact with every day. Right now, we have a Web Summit on in Vancouver and what's that, a web summit? It's a big conference down in the Vancouver Convention Center, and there are thousands of entrepreneurs congregating there right now. And the energy there is unbelievable. Personally, I've never been more excited to be in business because I'm able to translate my ideas into reality without all the friction of, you know, all the things that I needed to do before, i.e. learning how to code and all these other difficult tasks that I never would have had time or, or the inclination to do so.
Nicole 00:13:11 That's interesting because that's my experience as well. It's funny, you hear some of the CEOs of these AI companies warning that, you know, in five years, maybe 50% of white collar jobs might not be there.
Nicole 00:13:22 But it seems like the reality on the ground is these are tools that are allowing smart professionals to be that much more efficient and innovative. But I don't necessarily see it as a wholesale replacement because human judgment, expertise, that empathy, that personal connection is needed as much as it ever was.
Steve 00:13:43 Well, yeah, exactly. I think the general public has caught on to the notion that AI is going to throw at you a ton of information, and it's all going to sound good, but it may not be actually what you need or even be factual. You know, obviously hallucinations are still a thing inside of AI. Maybe that'll get worked out, but what's not going to get worked out is this sycophantic nature that AI has to spit back at you what you want to hear. And people are wise to that, and we need to lean on our ability to gut check and to use our human discernment and to actually prioritize and figure out what do I actually want to create as a business owner, as a human? Those abilities are more important than ever.
Steve 00:14:28 So I don't yeah, I don't see humans going away as, as, it's just that we're going to be relying more upon visionary skills, upon discernment and, you know, frankly, more interesting attributes of what it is to be human than plugging away to a spreadsheet.
Nicole 00:14:46 So another risk is KPMG has identified supply chain resilience as the top concern for Canadian businesses. There's rising costs, inflation, labor shortages, regulatory changes. So how should we be thinking about financial resilience? You know, how can we help businesses survive shocks and financial regulatory trade and technological uncertainty.
Steve 00:15:12 Honestly, I think cash reserves, liquidity, doing whatever you can do if you're not experiencing a downturn already, shoring up your ability to weather uncertainty, I think is more important than ever. So yeah, I think just building your own financial resilience and your ability to weather those changes is what any business owner should be focusing on.
Nicole 00:15:34 Okay. So let's talk about action. So we've covered a lot of ground. So business owners are listening to this and thinking okay I need to do something.
Nicole 00:15:42 Where do they start? Like how do they do a quick audit of their risk exposure. And what are the, you know, 2 or 3 things they could do in the next month that could move the needle in terms of mitigating their risk?
Steve 00:15:54 Well, it's funny you mentioned the term audit because I actually have a business owner audit that I'd be happy to share with your audience if you'd like. And so as a business owner, you can go through this audit that takes no more than five minutes and it will produce a report for you which identifies what are the most important risks and the things that you should address first.
Nicole 00:16:09 Okay. And what kind of questions are you asking people?
Steve 00:16:11 We're asking do you have the fundamental documents in place? Do you have a will, power of attorney, representation agreement? And if you do. Have you updated those documents within the last two years? Three years? Have any fundamental changes happened in your life? So things like executor changes. Have you got tax advice on your situation? Is your minute book for your company or your companies? Are they all up to date? You have shareholders agreements in place.
Steve 00:16:34 You have insurance. Have you set up trusts for your children, things like this? Yeah.
Nicole 00:16:40 So thank you. This has been very practical and timely. What would you leave our business owner listeners with? Takeaway.
Steve 00:16:47 Yeah. I would just say don't get overwhelmed and don't give up. You know, if there are risks or concerns that are keeping you up at night, there are answers out there. There are solutions out there. And don't rely overly heavily on AI. AI is a great starting point. It's a great place to refine your thinking and the kinds of questions that you're going to ask, but ultimately lean on the professionals that are in your circle. And if you don't know somebody, then feel free to reach out. The professionals who are featured in your podcast are a great place to start.
Nicole 00:17:15 And how can people find you?
Steve 00:17:16 You can find me online at PARR Business Law, www.parrbusinesslaw.com
Nicole 00:17:24 Great. Thank you so much Steve.
Steve 00:17:25 Thank you.
Nicole 00:17:27 This podcast is for informational purposes only and should not be considered individual, legal, financial or tax advice.
Nicole 00:17:34 Make sure to consult the advisor of your choice to advise you on your own circumstances.
Nicole 00:17:41 Thank you for joining us for this episode of Your Estate Matters. If you like this podcast, make sure to follow it on your podcast platform of choice. Whether you're planning your own estate or you're acting as executor for somebody else's heritage, trust can help partner with Heritage Trust to protect your family, your assets, and your legacy. If you'd like more information about Heritage Trust, please visit our website at Heritage Trust Company.
Nicole 00:18:13 This podcast is produced by Podfather Creative.
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