If your best client died, would the family be prepared for everything?

By Christopher P. Hill, RFC

Wealth and Income Group LLC and FuneralResources.com

Nobody wants to talk about death or dying. However, we know for a fact that it will happen someday, and the harsh reality is that it often happens when we expect it least. Therefore, as financial advisors, it only makes sense that we factor in a plan for this possible scenario.

So many people and financial professionals spend their entire lives attempting to create the "perfect financial plan," with the hopes and dreams of becoming financially successful and independent. However, regrettably, most people, including financial advisors, overlook or ignore the only thing we can guarantee in our lives -- some day we will die.

For more than 23 years, I have been working hard for my family and clients to help them coordinate and integrate a game plan that is specifically designed to help protect against many of life's most financially devastating events. Like most financial advisors, I accomplish this using products and strategies that add a much-needed layer of financial protection, such as car and home insurance, umbrella policies, disability insurance, health insurance, life insurance, long term care, wills and trusts, business insurance, annuities, etc.

Losing a loved one changed my life -- and my Web site -- forever

But for me, on Thanksgiving Day of 2008, everything suddenly changed. Just when I thought my family and clients were properly insulated against all of life's most dangerous and/or unexpected events, I lost my mother to cancer.

Ironically, during the two year period before my mother passed, I was actually creating and building a funeral planning Web site on the Internet. And up until the point when my mother passed, I had spent countless hours researching, reading, performing surveys, writing numerous articles, analyzing the competition, and developing the design and technology of this Web site, and trying to do everything possible to learn more about the funeral industry.

Looking back, I would have confidently described myself as "mostly experienced and well-educated" when it came to funeral planning and end-of-life planning matters. However, it took that dark day in 2008 for me to learn two extremely valuable lessons:
    1. Regardless of all the research I had done, like most families who lose a loved one, I had no idea what to do next.

    2. I began to recognize the true purpose and value of leaving behind a smart and comprehensive end-of-life plan.
The reality is that just about everyone agrees these products and strategies mentioned above (life insurance, wills and trusts, etc.) are critical components of a sound financial plan. We all know that not only are we going to die one day, but we also acknowledge that there is a possibility that anyone's life could actually end abruptly and unexpectedly.

The financial planning industry is overlooking something

When you take a look at the financial industry as it stands today, I think it is fair to say that a large part of a financial advisor's job is to create a game plan for something that might (or might not) happen. In other words, the financial planning industry has repeatedly trained and conditioned financial advisors to always revert back to the philosophy of making sure we "plan for the worst, and hope for the best."

Heck, you could really even go so far as to say that one of the main roles of a financial advisor is to be the one to say, "I told you so!" To use an example, let's assume that an unexpected event occurred with one of our clients that caused significant financial damage. Assuming we had properly "planned for the worst," we can now say something like:

"Don't worry Mr./Mrs. Client. Do you remember that backup plan that I strongly recommended we build together? You know, the plan which we both agreed could actually happen, and that I told you was specifically designed for this type of circumstance? Well, the good news is this plan we've implemented is now here to help you and your family by reducing or eliminating as much financial and emotional pressure as possible. So don't worry, everything is going to be OK."

Now let's take this one step further from another angle. In some situations, financial advisors can actually be held liable if they fail to discuss or recommend a protective product or strategy. For example, let's assume a financial advisor fails to bring up the topic of life insurance for a young couple with two young children, where the mother is a homemaker. If the financial advisor completely neglected to discuss or recommend life insurance as a suitable product and protective strategy, and if an unexpected event were to occur causing the husband to die, the surviving spouse could likely have a good case for a lawsuit. Another example could be failing to discuss long term care with a widowed woman, say, age 60. In fact, I have actually read about several cases where the family members have filed suit against a financial advisor for neglecting to discuss or recommend long term care. As a result, the large costs associated with assisted living facilities depleted the children's inheritance monies.

We can guarantee a large loss will occur and plan now

Finally, let's analyze the situation that exists today as it relates to financial advisors and end-of-life planning. Unlike many other financial planning scenarios, a financial advisor could perceivably -- and legally --say the following to a client with regards to end-of-life planning.

"Mr./Mrs. Client, I can guarantee you with verifiable certainty that one of the most tragic events you can imagine will happen to you at some point in the future. And the news gets worse. Although I don't know exactly when this tragedy will occur, I do know two things for certain. First, this horrible event could happen at any moment. And second, the older you get, the higher the probability that this awful experience is guaranteed to happen. And Mr./Mrs. Client, as much as I hate to admit it, there is even more bad news. I can also tell you that the odds are extremely high that an event as tragic as this will also add severe emotional and financial pressures to your family, and these pressures will begin to affect you and your family almost immediately after this tragic loss. Now Mr./Mrs. Client, since we know this financially and emotionally damaging event will happen at some point in your future, we need to begin building a plan to minimize these financial and emotional hardship right now. Let's get started."

That will never happen to you ... right?

The fact of the matter is that, although this might be an extremely unlikely conversation, it proves a very important point. Each of these statements are 100 percent accurate, guaranteed, and can be proven to be true. I am fully confident that there would be no lawsuits filed if that conversation actually took place regarding end-of-life planning.

So, if we are talking about the fact that Mr./Mrs. Client will die and, therefore, need to create an end-of-life plan to help guard against future financial and emotional pressures, why is it that this type of financial planning strategy is mostly misunderstood, overlooked, or simply ignored?

Every time a financial advisor sits down to help build a "big picture" financial plan, they should be aware of the fact that their client will be experiencing a guaranteed tragic event at some point in their financial future. Since the financial planning industry does not currently strongly advocate or mandate that every financial plan should include an end-of-life plan, isn't the industry using the mindset we've all been trained to oppose, which is, "Yes, I know this can and does happen, but it will never happen to me."

My inspiration to make a difference

The sad truth is that, although losing my mother was the worst experience of my life, it has evolved into a valuable lesson and tremendous inspiration for me going forward. I've been there, and I know what families go through. I know the questions they have, the details they need to think about, and the emotional decisions and large expenses involved.

Now, more than ever, I firmly believe that end-of-life planning needs to be a standard and routine part of a comprehensive financial plan. And I am making it a personal mission to change the way the funeral planning industry views and incorporates this piece, as it relates to an overall financial plan.

So after much debate, I decided I would proceed forward with my funeral-related Web site, but only if I could make a difference. So, I went back to the drawing board, and all of a sudden, I realized exactly what was missing. I recognized that this Web site could serve as a great opportunity for me. Why? Well, not only could I create a state-of-the-art resource center for funeral planning, but I could also use this as a medium to loudly send my message about the importance of adding end-of-life planning as an integral part of a comprehensive financial plan.

Funeral planning need financial help, and vice versa

Everyone knows that the funeral director's job is one of the most highly-respected forms of public service. However, it's one of the toughest jobs, too. Just about all of the services they provide involve challenging situations such as coping with emotional loss, grief counseling and bereavement, working through the funeral expenses and family budgets, helping plan the funeral or burial, performing or assisting with the memorial service, preparing the deceased, coordinating with multiple family members, working with many different religions and churches, and much more.

Given the fact that a funeral directors job is so challenging, if financial advisors begin implementing end-of-life planning as a common part of a family's financial plan, this will help the funeral directors by making a difficult situation a little bit easier.

My sincere hope is that I can help make a difference through increased awareness, education, and training within the financial planning industry. As financial advisors become more educated and begin to experience the true value and advantages through helping our clients build a smart end-of-life-plan, this will create another opportunity, since they will be forced to start working closely (and regularly) with their local funeral directors. This can open up many wonderful new family opportunities for both industries.

A win-win-win situation is shining upon us

End-of-life planning has several key benefits. First, it emphasizes the value derived by working with a credible financial or funeral professional. Second, it strengthens the financial future of the families we both serve. And finally, end-of-life planning creates a win-win-win situation.

I hope one day my mother is very proud to see that, through her inspiration, her legacy of helping others will continue to shine and live forever.

*For further information, or to contact this author, please leave a comment and your e-mail address in the forum below.