Covid-19 has brought the subject of death, and how to deal with it, front and center for both financial advisors and their clients, according to Kelly Campbell, president of Campbell Wealth Management in Alexandria, Va.
Advisors who lose clients who are close to them have to deal with their own grief, while, at other times, they need to help clients deal with deaths in the clients’ families, Campbell said.
“The coronavirus pandemic has made death a regular discussion item around households. For the advisory industry, given the nature of the business and the average age of clientele, death is a regular course of business now,” he said. “In death, it is important for advisors to recognize they can play a crucial role in helping families and beneficiaries.”
Most of the clients of Campbell Wealth Management, which has $600 million in assets under management, are 55 or older, which is a vulnerable population for Covid-19. Campbell and his advisors do a financial plan when they bring clients on board.
“Then if something happens to a client or one of their family members, we go back into the plan to see what the options are. For instance, a surviving spouse may see a drop in income because of [a] death,” he said.
In one recent instance that the firm dealt with, a husband had a $400,000 life insurance policy that was not part of the assets being handled by the firm. The husband changed the beneficiary from his wife to his children without informing either. Upon his death, the wife found she did not have enough money to live on because she did not have the proceeds of the life insurance policy.
“We were able to get the children, who wanted the money, to disclaim the benefits and the money went to the wife,” Campbell said.
“In the beginning, we try to make sure the client has enough money to live on for at least a month, so no decisions have to be made at first,” he said. “Then we come back for a long-term plan.”
In a different kind of case, early onset Alzheimer’s disease forced a husband, who was the main bread winner, to retire, and the family could not live on what the wife made while living in the Washington, D.C., area. Campbell determined their options and the couple decided to move to a less expensive home in the South, where they already had family. They were able to reduce their living expenses in part by eliminating their mortgage.
“If a couple cannot come up with $10,000 a month to retire, which they may think they need, we try to see if we can come up with less money and reduce expenses,” which is a situation coronavirus victims can find themselves in, Campbell said. In other cases, Campbell said the firm tries to show adult children who inherit money how they can make the most of what might be an unexpected inheritances. "We put the pieces of the puzzle together,” he said.