Updated Thursday, July 31, 2014 as of 1:39 PM ET
Inheritance Planning: Smart Ways to Get Clients Talking
by: Andrew Welsch
Wednesday, March 12, 2014
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Far too often high-net-worth clients fail to develop a clear plan for their assets once they are gone, creating potential conflicts and headaches for their heirs. Their children might fight over the vacation home, with one looking to sell it and the other insisting that it’s a treasured piece of patrimony. Or parents may choose to leave more assets to one child instead of another, but the children don’t find out until the parents have passed on, resulting in bitterness between siblings.

Financial advisors are in a unique position to help their clients avoid these conflicts, that is, if they can find a way to broach the subject, says Bob Mauterstock, a financial advisor and author of Can We Talk, A Financial Guide for Babyboomers Assisting Their Elderly Parents.

“The FA has an ongoing relationship with them, and probably a better relationship than any other professional,” he says.

BUILD CONFIDENCE

But advisors and clients too often shy away from having conversations about inheritance and estate planning because many people are uncomfortable thinking about end of life issues or, particularly in the case of advisors, they’re reluctant to talk about something that they feel is beyond their expertise.

“So many advisors haven’t been trained, and haven’t really done it. If I’m not confident about my abilities to have this conversation with my clients, then maybe I’ll shy away from opening that Pandora’s box,” says John Nersesian, chair of the Investment Management Consultants Association’s board of directors and a managing director for Nuveen’s wealth management unit.

He recommends advisors take a two-step approach to building up their confidence in dealing with these matters.

First, recognize that it’s an important service to your clients, he explains, and then get informed. “Take classes, read books, speak with others whether they are attorneys or other advisors who have experience dealing with this,” suggests Nersesian.

He recommends that advisors periodically introduce new services or add a new topic to the agenda when meeting with clients.

“The idea being that we are constantly broadening the relationship to add greater value,” Nersesian explains. “I think the advisor will be surprised that many of their clients will welcome this kind of guidance, and the positive impact.”

GRADUAL APPROACH

For clients hesitant to talk about inheritance and estate planning, Mauterstock recommends taking a light, gradual approach.

“When you meet with them, start asking questions about their children. Just ask them questions, like ‘do you have plans with what you want to do with your vacation home?’ See how they respond. That will lead into more of a conversation about their children and future,” he says.

If clients seem reticent or unsure about what to do with their assets after they die, Mauterstock suggests posing general questions, such as how do they want to be remembered? What would they like to bestow upon their heirs? Is there a particular charity or a cause that they’d like to support?

Once they are comfortable talking about that, Mauterstock says, then you can suggest they consider creating a detailed plan on how to portion out their assets.

Mauterstock admits that while this is not the easiest of subjects to discuss, once a plan is in place, clients and their children will have peace of mind. And for the advisor, the upside is not only happy clients, but also an opportunity to develop a relationship with clients’ heirs.

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