Who Said Anything About Dying? It’s ‘Financial Housecleaning’

Ten tips to help clients “put their affairs in order” from our columnist who lightens up this grim task.

By Bryce Sanders
Bryce Sanders
Bryce Sanders

No one wants to die. As we get older, the possibility transitions into a probability and then a certainty. You have clients who are in failing health and others who skydive. In all cases, they should understand the importance of planning ahead.

“Putting your affairs in order” sounds grim. If you’ve ever taken a seven-night cruise starting on a Saturday, you notice the ship is starting to say goodbye to you on Wednesday by giving you printed copies of their debarking procedures and luggage tags! You think, “I still have three nights left. Stop rushing!”  You don’t want your friend or client to feel someone is following them around with a coffin on their shoulders.

You’ve heard the saying “Money isn’t everything, but it sure keeps the kids in touch.” How about this one: “Go first class. Your heirs will.”  Sometimes older people feel their relatives are circling around, waiting for them to die, so they can see what they will get. I recall meeting a person who actually said, “My husband’s relatives are so selfish. They insist on holding onto their money until they die, instead of giving it to us now.” You can see why some older people get upset.

As their financial advisor or their friend, you can give them some practical advice:

When was the last time they reviewed their will?

This is important for many reasons. They may have a lot more money now, thanks to the 10-plus-year bull market. Having parents or grandparents who lived through the Great Depression, they have always been careful about their spending, despite the retirement plan reviews you have provided showing they could live comfortably until age 225. Have they looked over their will recently? Would they like to add or subtract heirs?

Do they need estate planning?

  It might seem late in the day, but the estate tax threshold might be changing in the future. Changing as in going down, not up. Do they need to make preparations to preserve as much of their money as they can? Introduce them to an estate attorney. Can an existing life insurance policy be put into a life insurance trust?

Where are their insurance policies?

They paid premiums for decades. Let’s not forget about them now. They can pay off a tidy sum that can avoid probate. The heirs will like that, although you don’t need to tell them money is coming their way.

Do they have the right beneficiaries in place?

Although we tend to forget about it or just assume we did it right the first time, you want to review the beneficiary designations. This can be a good way of remembering favorite charities.

Can they afford to pay down debts?

They have plenty of assets, but owe money on credit cards. If they intend to leave a house in single name to an heir, the lucky relative can take over the mortgage after completing the proper paperwork. Reverse mortgages come under a different rule. They must be paid off upon the person’s death. Your client might want to pay off all their debts to make settling the estate easier on the executor.

Do they own collectibles or just junk?

A better way to say it might be: “One man’s collectibles are another man’s junk.”  My wife and I are collectors. We live in fear someone else is in our situation and their executor rents a dumpster and tosses everything into the trash. You need an itemized inventory. A couple we knew were retired antique dealers. He collected vintage firearms and kept a list, updating their values every year. He told his wife that when he dies she should continue the practice, increasing the values by the amount of inflation. When she would need cash, she could just sell a piece through the proper channels.

Can they designate who gets what?

People promise jewelry to favorite nieces and grandchildren. Sometimes the little tykes can be very blunt: “That’s a beautiful ring grandma. Can I have it?”  As the embarrassed parents pull the child away, the older person makes a mental note: “This piece goes to that child.” I think it was in Kevin Kwan’s book “Rich People Problems” that the heirs actually put sticky notes with their names under differ pieces of furniture, claiming the deceased was leaving those pieces to them! They need a list of who gets what regarding the hard assets.

What’s the plan for the passwords?

Imagine an older person taking their passwords to online accounts with them to their grave. Now introduce the concept of cryptocurrency, those digital assets. Imagine accounts with no paper statements. How would you even know where to start looking?

Can they consolidate securities accounts?

 You are good, but not that good. You are their advisor, but they have other accounts they haven’t told you about! Sometimes it’s accidental. I had a former client who called about 25 years after I left my role as a financial advisor at Merrill Lynch. She started the conversation with, “Remember you sold me XYZ utilities back in the 1990s? I still have the certificate, but I’ve been reinvesting the dividends since then. Where are those shares?” Of course I helped her as best I could. The moral of the story is to at least record all the account numbers, brokerage firms and contact names into a book, keeping it in a safe place.

It looks like a safe deposit box key to me.

These still exist. Imagine the heirs realizing money is missing, finding the key and wondering where the money went. I had a situation where the deceased had sold securities and “done something with the money,” as the heirs explained years later when they got in touch. They had no idea what, although they suspected he bought gold coins with the cash. I wonder if they ever found the money? These clues need to be turned into written records.

Additional Reading: Fifteen Ways to Help Older Clients 

There are logical reasons to do all these things. None of them imply they will be dying anytime soon. It’s financial housecleaning. There are several other practical steps you can think of when you put your mind to it. Add them to your list.

Bryce Sanders is president of Perceptive Business Solutions Inc. He provides HNW client acquisition training for the financial services industry. His book, “Captivating the Wealthy Investor,” is available on Amazon.




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