As credible and seasoned advisors, you probably have counseled clients to have written instructions regarding the management and distribution of their estates. Of course these instructions come via well-crafted wills and trusts, and are complemented by current health-care directives and powers of attorney.  Addressing more complex situations, additional legal documents may be in place for estate tax-saving strategies, philanthropic endeavors,  special needs, and the like.  We have all experienced firsthand that properly drafted estate planning documents save money, time, angst and important family relationships.  Our role is to also make certain the proper titling and designations are in place to ensure our client’s wealth transfer intentions.

So why is the great beyond…the beyond being the execution of these legal documents… so often neglected?  Where are these thoughtfully prepared documents located?  The wills and trusts provide for the disposition of assets, but where is the composite list identifying these assets?  Has it been shared with the family?  Is there a place to find contact information for trusted advisors and insurance policy information?  Grieving family members and friends are bombarded with dozens of these questions – all requiring immediate action during times of great emotional distress.

Death is not an if, it’s a when. No one can escape death, but very few people want to be reminded of it, and even fewer to discuss it deeply. Why, as planners, do we ignore this part of the planning?  Personally, I recently experienced a moment that shook me into my own thoughts about my mortality. 

In talking to a family about their loss, I realized that I was personally uncomfortable with the thought of my own death. Some seemingly simple decisions become monumental and cause major dissension among the family members when someone dies: Did the deceased want to be buried or cremated? Who should be notified of the death? How should the obituary be written or is a death notice sufficient?  Who is responsible for the loved one’s pet? I further recognized, had I been the one to die, I would not have provided all of the answers.

If you are ill at ease with the subject of your own passing, your unease will undoubtedly be evident to your clients. Our own death is a subject that is rarely discussed in any depth in our society. Those who attend religious services find that this topic may be addressed from time-to-time–otherwise we seldom think about it, much less, discuss and memorialize it.

A tradition should start with us. As advisors we should get used to the idea that we are not only life planners, but just as essential, death planners. To begin, we can work toward simplifying and streamlining our clients’ financial situation, showing them how to organize their files and discussing with them the importance of keeping everything in one place.  Ideally, we should provide an electronic depositary for our clients to store this information, and in turn tell their executor to contact us on the client’s passing. Included should be such information as:

  • Key contact information
  • Summary of assets and liabilities
  • Summary of insurance policies
  • Location of deeds, mortgage papers and vehicle registrations
  • Information about their business and business contacts
  • Location of legal documents

Further, educate your clients on exactly what their legal documents provide and what additional information or items need to be considered.

Wills And Trusts
Stress the importance of an up-to-date will and/or trust. A will and/or trust accomplishes two main goals. First it provides for the orderly distribution of property at death and to the next generations(s), naming an executor/trustee to oversee this process. Second it provides for the elements of effective estate and income tax planning. Out-of-date wills and trusts can often create fiascos at death--following a plan that made sense 20 years ago may no longer represent the wishes of today.

Summarize a client’s will and each year remind him or her what it says. Also note that a will is not the proper place for clients to declare funeral wishes since it will likely not be probated until a time after the funeral.  Rather, leave a set of wishes and instructions for the executor.

These last wishes may include details such as burial or cremation preferences, choice of casket and pallbearers, ceremony options, memorial services, military veteran honors, and individuals to be contacted before the funeral.

Power Of Attorney
A power of attorney appoints an agent to act on your client’s behalf with regard to personal and financial matters, excluding health-care issues. A durable power of attorney remains in effect when a client becomes incapacitated; however, once he or she passes away, the power of attorney is no longer valid.

A power of attorney can be limited in the powers that it confers upon the agent. Further, certain institutions (namely, financial institutions) may require individuals to sign a specific power of attorney that operates at that institution only. However, most states now have statutory language that,  if drafted into the client’s power, must be accepted by financial institutions.  Make sure the client’s power comports with state law.

Health-care Power Of Attorney/Living Will
A health-care power of attorney appoints an agent to act on your client’s behalf with regard to health-care matters if he or she becomes incapacitated. Many health-care powers of attorney include a living will. (A living will can also be a separate document.)  A living will is a declaration of one’s wishes regarding medical treatment that sustains or prolongs life by extraordinary means. These are critical to have in place before a client is under medical care. It is very stressful for someone to execute a living will as he or she is about to undergo a serious medical procedure.

Digital Estate Planning
The use of Web site logins and passwords has skyrocketed. Digital planning around stored data is evolving with regard to executor rights, email accounts, business records, file hosting services, online financial services, social media websites, and photo storage.

Since the mid-1990s, a proliferation of Web sites and services have surfaced to assist in death planning, including: