How To Start the Estate Planning Talk With Clients

One of the most difficult conversations – often dubbed “the talk” – adults have to have with their parents is the one about estate planning. Same goes for advisors. To put it mildly, this is delicate subject matter and it’s a reminder of one’s own mortality.

Sensitivity and tact should not be dismissed, but that doesn’t change the fact that while the estate planning chat(s) isn’t one that all clients want to have, it’s one they need to commit to. After all, solid estate planning is part of a strong, comprehensive wealth management. As advisors know, there are myriad legal and tax complexities associated with bequeathing assets and those complexities are amplified if proactive steps aren’t taken prior to the client passing on.

Additionally, the sheer variety of clients that benefit from sound estate planning makes it important for advisors to know how to broach this subject. It affects spouses, heirs and even the heirs’ heirs.

Kicking Off the Conversation

One of the big hurdles in conquering awkward conversations is knowing where to start and that’s true when it comes to estate planning.

“The thought of leaving a legacy that can smooth the way for others is a great feeling. But your clients should understand that good intentions aren’t enough,” according to Nationwide. “Explain to them that without careful planning, a significant portion of their estate could be eaten up by taxes, tied up in probate court, or distributed to people other than their intended recipients.”

With a sound starting point, a solid framework can be established for important issues such as nailing to whom assets are directed, damping tax liabilities and swift payment of estate taxes.

From there, advisors can gain insight from clients on matters including charitable wishes (if any), debt reduction, and health and personal wishes.

“Remember, it’s not just about getting answers. It’s about making clients feel at ease, understood, and empowered. These questions are a starting point. They pave the way for a deeper, more comprehensive dialogue—ensuring clients are in control and confident about their plans for the future,” adds Nationwide.

Be Inclusive

If ever there was a subject where inclusiveness should be prioritized by an advisor, it’s estate planning. At a minimum, the client’s spouse needs to be involved and it’s certainly a good idea to have adult children participate in these meetings, particularly if both parents are of advanced age. Data confirm the benefits of being proactive on the estate planning inclusivity front.

“Reaching out to these family members can help to ensure everyone is informed about your client’s estate plans,” concludes Nationwide. “It can also help you retain assets once your main contact passes away or becomes incapacitated. Research shows that 70% of women switch their wealth relationship to a new financial institution within a year of their spouse’s death. Adult children are likely to do the same—a Cerulli Associates survey of U.S. retail investors’ attitudes toward estate planning revealed that 87% of affluent investors reported not using their parents’ financial professional.”

Related: Younger Clients More Prone to Financial Infidelity