Lisa Gray

ContactLisa Gray has been a wealth writer since 2001. She has been involved in the wealth management industry since 1988. She is the author of two bestselling books—The New Family Office and Generational Wealth Management.
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graymatter Strategies LLC

Spiffing Up Or Creating An Estate Plan May Not Be Tops On Your Clients' Spring "To-Do" Lists, But It Certainly Should Be edit
Friday, April 13, 2012 09:23

Tags: estate planning | investor behavior | niches

 

Dealing with certainty is something we rarely get to do in life. One place clients get stuck is when contemplating their own mortality. The role of a trusted advisor is to give clients the courage to do what they need to do but can’t seem to do on their own.
 
And what better time to talk about estate plans than when life is regenerating itself? Here are some thoughts on making estate-planning conversations easier and actionable.

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Whether reveiwing or creating an estate plan, the first step is to realize that this is a multi-family member conversation, not just a client-advisor-attorney-tax professional conversation.
 
A family-wide conversation about a client’s estate is an anomaly. More often, the estate gets planned and the family breaks apart after the client dies.
 
Clients may set up their estates in a way they think will prevent this. But they’re flying blind if they don’t include their heirs in the conversation before rather than after the fact.
 
Planning a spring family get together is one way to get the conversation going. It moves the focus away from the client's mortality and onto how they have made their family members' lives better.
 
When you ask how clients would like to see that benefit continue after they're gone, you get some initial insights into their estate planning needs.
 
This is more than just talking about legacy or asking how they want to be remembered. This is giving your client a truly meaningful way to enhance their heirs' lives.
 
When you get an entire family talking about these things and what they will need for their own lives, your insights are generously enriched.
 
You also risk experiencing some family psycho-drama. More often than not, that’s a risk worth taking.
 
Taking that risk empowers your client in ways neither you nor he/she ever knew possible. Bringing in a wealth consultant and/or psychologist will help.  
 
In reality, clients have very little control over how family members will utilize their inheritances. Even the most iron-clad legal structures can be circumvented if heirs try hard enough.
 
Flying blind is a mistake even with the best family relationships. Here’s a case in point.
 
A family had a vacation home in which they gathered each year. It was a special time for everyone. So the parents designed their estate to make all three of their children owners of the home after they died.
 
They didn’t consult the children; they assumed this would be a gift that the children would cherish.
 
So they set up a trust that would own the house and stipulated it was not to be sold. They thought the trust ownership of the house would eliminate any burden and offer years of further memory making.
 
After the parents died, the children viewed the gift as a burden. They wanted to sell the house and use the money to fund annual family trips which could be educational as well as fun.
 
Extending the conversation to other family members enriches the planning process and makes it easier. It results in clients knowing that what they want for their heirs has a realistic chance of happening.
 
The clients' wish in this case was to provide a way to continue the family's annual get-togethers. But their view of what that should look like didn’t match the view of their heirs.
 
Clients may initially be resistant to making the estate-planning conversation family-inclusive. But they’ll ultimately be happier if, during their lifetimes, they know that their estate-planning goals have a realistic chance of being accomplished.  

 

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