A Necessary Undertaking

Helping a client with estate planning usually means a discussion of trusts, life insurance, and various gifting strategies, which ostensibly will protect the client's family and finances in the decades after his death. Yet one related topic that is rarely covered by you (or anybody else) is what can be done now to help your client's loved ones through their highest point of emotional vulnerability:

Helping a client with estate planning usually means a discussion of trusts, life insurance, and various gifting strategies, which ostensibly will protect the client's family and finances in the decades after his death.

Yet one related topic that is rarely covered by you (or anybody else) is what can be done now to help your client's loved ones through their highest point of emotional vulnerability: during the first few hours and days after the client dies.

The best way to begin this dialogue with a client is to be blunt. A question like, “If you don't make it home tonight, what would your family need to know first?” will get him thinking, and also stand as proof that you care about his family and want to be able to comfort them when they will need it the most.

The First 48 hours

Perhaps ironically, when we die we have the option of providing life to another person by donating organs. Has your client made a decision on this weighty issue, and if so, where are the instructions kept? There is more information for both of you at www.organdonor.gov.

Shortly after word of your client's death gets out, those who knew and cared about him will begin wondering, “When's the funeral?” He can ensure that he goes out his own way by writing down what he would like for his memorial service, including the location, who he would like to speak, music to be played, pall bearers and requests for the post-service dinner.

If he seems reluctant, remind him that in absence of any instructions, what is said and done during the last party held in his honor will be beyond his control, and he'll have no chance for rebuttal.

Finally, deciding on a final resting place now will relieve your client's survivors from having to hazard a guess as to where he wants to spend eternity. Choosing cremation also requires a decree on where the ashes should end up, while opting for a traditional burial now will give him plenty of time to bargain on a casket.

Writing Things Down

Once the memorial service has been planned, in the absence of directives from your client, the next duty that the loved ones will have thrust upon them is to create an obituary.

Since this may be the primary summary of how your client is remembered (especially if it makes it on to the Internet), for posterity's sake he might want to pen a few words about his life well in advance of his death.

Once you convince your client to start writing, don't stop with the obituary. He may want to compose letters to those whom he cherished most, including appreciated qualities, stories he remembered fondly, and advice for their futures.

Then there is the matter of bequeathing personal items that aren't worth enough to be mentioned in a will, but whose sentimental value could instigate long-lasting family feuds. At best, he'll decide in advance who should get what. At a minimum he'll determine an equitable system of distribution.

Where's the Money?

To most investors and advisors, the word “diversification” means using a wide range of investments in a portfolio. But to some clients (especially those of a certain age), the term translates as putting money in six different brokerage firms, nine banks and credit unions, and burying a bucket of gold coins up at the lake place.

Since the typical client won't delineate the location of every last penny, your client should provide you, the heirs or an attorney with a detailed inventory of all assets, including investments, savings, life insurance, real estate and collectibles. And although a one-page summary is enough to get started, a better alternative is a safe box containing copies of statements, tax returns, confirmations and a name to contact at each institution.

If your client is hesitant to disgorge the whereabouts of all his wealth, he should at least make a list, and make the location of the list known to one or two confidants. As a motivator you may wish to point out that if left undiscovered by his beneficiaries, the assets may eventually become the property of his state of residence — in effect, one more “tax” triggered by his death.

The Next Step

As 78 million Baby Boomers begin to contemplate their own mortality, advisors who can tactfully initiate this discussion with clients will be greatly appreciated by both clients and their families.

It can be as simple as adding the above questions under the heading of “estate planning” in your annual client review. But if you would like resources designed specifically to help advisors address the issue, you can find out more about legacy planning on the web at www.planyourlegacy.com, or www.privatematters.com.

Keep in mind that even if the conversation goes well, it won't be fun for either one of you. But solidifying your client's final wishes now will permit his family to spend the days after his death grieving their loss, and celebrating his life. And once these issues have been addressed, the client will most likely feel a great sense of relief and gratitude.

Writer's BIO: Kevin McKinley CFP(R) is a Vice President-Private Wealth Management at Robert W. Baird & Co., and the author of the book Make Your Kid a Millionaire (Simon & Schuster). You can reach him at [email protected]

MONEY MYSTERY

Think it's silly to make your client write down where all of his assets are? A survey released last year by MainStay Investments said that when it comes to locating assets, not all families are in the know:

Older parents who say “haven't gotten around to it” is the reason they haven't talked about the location of assets with adult children: 52%

Adult children who say they would not easily be able to locate a parent's critical financial documents: 37%

Adult children who say they wouldn't know what to do or whom to contact to settle their parents' estate: 28%

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