Today’s affluent families have many options for choosing investment advice and financial advisors. There is no lack of information, or automated computer systems, available to help them make choices. Yet, as a seasoned financial advisor, my experience is that computer systems may help guide families and their advisors through the stages of wealth accumulation and wealth preservation. However, those systems are not nearly as effective for the final (and in many ways, most important) stage of wealth transfer.

Here—when you are facing some really big life decisions—you need to rely on someone who deeply understands your situation, your values and your family structure. You need someone who is also thoroughly qualified to take action on your behalf to take on the burden of managing documents (like your estate plan) and other professional advisors (like attorneys and accountants). This is how to prevent fear of an uncertain future from piling on top of grief, creating an overwhelming situation for the ones you love. Here are my top 5 considerations for wealth transfer planning.

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"I take great pleasure in helping my clients find better and more tax efficient ways to pass their wealth on to the ones they love and the charities about which they are passionate."


My 5 Top Considerations

Over the years, I have helped carry the burden of several end-of-life situations with and for my clients. These have been very tough for me to go through. But they’ve also been a reminder to me of why I do what I do. I bring peace of mind and comfort to people who are experiencing grief over the loss of a loved one. I cannot describe how deeply satisfying this is to me.

Based on these experiences, here are my top five considerations for wealth transfer planning:

  1. Achieving Peace Of Mind As To Your Overall Plan
  2. Getting The Details Right…And Sharing Them!
  3. Defining How To Use Your Wealth And Where It Should Go
  4. Taking Care of Elders To Reduce Anxiety
  5. Building A Personal Relationship With A Trusted Advisor Well in Advance

Let’s take a closer look at each of these.


Achieving Peace Of Mind As To Your Overall Plan

Regardless of how wealthy my clients might be and how well they have lived, as they get older, many begin to worry about what will happen to them and their family. For example, many of the widows I work with have an unfounded fear of being forced to leave their own home.

To allay such concerns, I often remind them that not only do they have a wealth transfer plan, they have a great plan. This was brought home to me a few months ago when talking to a client afflicted with cancer. I went to his home to visit with him. He knew his end was near, and more than anything else, I felt compelled to spend quality time with him while I could.

We talked about his past and about how much the world had changed in the many years we had been working together. He shared with me some choices he had made that gave me cause for concern. I discovered that a Trust created on his behalf had gotten many important details completely wrong. Over the coming days, I quickly pulled together a new CPA and estate attorney, got the details worked out, met with his family to explain the specifics and put the new plan into action.

On my last visit to him, he said something that meant more than you can imagine: “Thanks for sorting all this out, Wayne. Now I can pass in peace.” This kind of peace of mind comes not just from having a plan, but from having the right details in that plan, which is what we’ll now turn to.


Getting The Details Right…And Sharing Them!

A solid wealth transfer has to get all the details right—including making sure those details are shared with and understood by those who will be managing them. For example, I recently spoke with a widow whose husband had made sure that all the proper planning was done, resulting in 4 trusts: a personal trust, a family trust, a marital trust, and a QTIP trust.

When I visited her, she said, “You know what, Wayne? I’ve got a checkbook for this, and a checkbook for that, but when I get a bill, how am I supposed to tell which of my four checkbooks I’m supposed to use? It’s just so complicated and overwhelming!”

This complicated situation—four trusts, four checkbooks, and then four tax returns—was set up both to manage logistics and to ensure their children would end up with the most possible money in the long run. But no one had thought to have a conversation ahead of time with the widow about how things would actually go! It’s critical to fully communicate the details ahead of time, especially when a husband has been the breadwinner and money manager during a marriage.

Not only must you have a plan, but you need to share that plan ahead of time and make sure it will work for everyone involved. This will relieve much anxiety, especially after a spouse has passed. This will also allow family members to focus not on financial and logistical details, but on their grieving. That is a great gift indeed. 


Defining How To Use Your Wealth And Where It Should Go

How to use your wealth, including exactly where you eventually want it to go, is a crucial detail to get right. Many people feel they already know the answer here: do what’s necessary to give all or most of their money—as much and as fairly as possible—to their children. Allow me to suggest a different approach.

First, you have to balance out what you need, want, and can afford right now with how much will be left when you have passed. Similarly, you should determine, both for now and the future, how much you want to give to your favorite charities and causes.

Finally, you want to ensure that you are giving an appropriate amount to your children. While you want to make sure they are taken care of, you don’t want to handicap them by making things too easy. Necessity creates drive and people who do not face some level of necessity can sometimes suffer from lack of drive. You don’t want that for your children.

A friend and client with Parkinson’s—with little time left—asked me about setting up a $200,000 yearly trust fund for each of his kids. I looked at him and said, “Why would you do that to them?”

This man had come from Italy to America with just a shirt on his back, then worked very hard to become a successful CEO who sat on numerous boards. Given my intimate knowledge of this man and his family, and based on the trust and understanding we had developed over many years, I was able to help guide him regarding his children.

He came to understand that much of his success came from just how hard he had worked, and that giving his children too much might diminish their work ethic and prevent them from achieving their full potential. 


Taking Care of Elders To Reduce Anxiety

A wealth transfer plan should take care of elders in two important ways. First, it should provide a financial strategy for taking care of them through their final days. That strategy should include housing, health care, travel if appropriate, in-home care if needed, and so on. But that’s not enough in my experience.

Second, the plan should address psychological burdens in whatever ways are necessary to bring peace of mind to everyone, but especially the elder. Elders need to know that when dealing with financial and logistical complexity, real help is just a phone call away to their financial advisor (or a familiar assistant). Here is why.

As people age, their mind often becomes confused and they are frustrated more easily. And when this happens, the first phone call they are likely to make is to a child – often a child who is working and dealing with their own stressful home and work life. Even if there is enough money to take care of the elder, families can still face very stressful situations if there is not a plan to reduce the anxiety of the elder.

I sometimes encounter situations where family members, and children in particular, are not fully informed about how much wealth is available to support an elderly person as their health deteriorates, possibly for several years. This situation can be addressed with effective communication and the right levels of support.

Children really benefit from knowing that mom or dad aren’t worried, frustrated, anxious, or needing to call for help all the time. This provides the children great relief and is a blessing to families who need help caring for an elderly loved one. Most families face this situation at some point.

For instance, many elderly people want to stay in their homes, which can produce substantial in-home-care annual costs, sometimes measured in the hundreds of thousands of dollars. How will a family afford that? With the right communication and the right logistical plan, these issues can be addressed effectively. I find that there are nearly always more options than people think of on their own especially if they are under duress.

When I help my clients think through their options and compare options to their financial resources, they feel better. They realize much greater peace of mind and the elders are cared for in a way that decreases their anxiety. 


Building A Personal Relationship With A Trusted Advisor Well in Advance

The old adage “dig your well before you are thirsty” never rang more true than in the context of wealth transfer planning. Everything I’ve discussed in this article is made much easier—or more difficult—based on whether you have already built a trusted long-term relationship with a financial advisor who knows you, your family, your values, and your desires. For the best plans to be made and carried out, you need a level of financial and personal intimacy with your advisor, and there simply is no such thing as instantaneous intimacy.

Suppose an elder spouse passes on and the survivor must now move forward and create a new normal. Research shows that upon the death of a loved one, our brain function can be diminished for over a year. In this situation, even if there is enough money and good planning, things can rapidly become very challenging for the elder spouse.

When they face these moments, they need to be able to turn to someone who is fully informed, empowered to act in real time, and who is committed to the best interests of everyone involved. If you have a long-term relationship with a financial advisor in place, they can take upon themselves much of the real-time logistical burdens, allowing the remaining family members to focus on grieving. 


Next Steps

Ultimately, you and your family are entirely unique, which means you need someone who can recognize, understand, and effectively plan for that uniqueness. You need someone who can help you with difficult and challenging problems without you having to ask, someone who can take responsibility to do things in a way that is in line with your family’s values. That’s what a trusted long-term relationship with a financial advisor provides, so if you don’t already have one in place, I’d invite you to consider quickly moving in that direction.


The information contained in this article is provided for informational purposes only. No illustration or content in it should be construed as a substitute for informed professional tax, legal, and/or financial advice.