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September 08, 2022 at 04:18 PM
Many of the best advisors tend to have relationships with their clients that can last for decades. As a result, it’s inevitable that advisors will eventually arrive at a time when a client is diagnosed with a terminal illness.
It is, of course, important for advisors to review cash flow, estate planning, insurance and other areas of clients’ portfolios with their terminal illness in mind.
But even more important is how to best communicate and interact with a client whose thoughts are consumed by their terminal illness, according to Carolyn McClanahan, a certified financial planner and physician who is founder of Life Planning Partners in Jacksonville, Florida.
After all, if an advisor isn’t aware of the strategies for working with such a client, all the best financial plans may become useless.
Also important is how to guide clients through the planning process when they don’t feel well.
Below are 13 pieces of advice that McClanahan discussed Tuesday during the Kitces.com webinar “Helping Clients Facing A Terminal Illness: Planning Strategies & Talking Points.”
1. ‘Shut up and listen.’
McClanahan suggests first asking a terminal client to tell you more about what’s going on.
“And then just shut up and listen,” she advised, noting “doctors are notorious for interrupting people, and it’s really important to just let the client say everything they’re going to say.”
When the client is done talking, “then you start asking questions,” she said. One smart thing for the advisor to say is: “Tell me how you’re handling it.”
Then ask what their treatment plan is, she added.
2. Take advantage of the ‘golden window’ to get things done.
There are “usually a couple weeks before they either have to have surgery or chemotherapy,” she said. “That’s a golden window to get very important things done.”
After all, she noted, “you don’t know if that person’s going to do well with the surgery or [if] they could die at any moment.”
Another important reason to try to get as much done during that window as possible is that the client is not yet clouded by treatment such as chemo, she pointed out.
3. Make sure to balance the client’s concerns with your concerns.
“You have to address … the concerns that they’ve shared with you,” she said. “But then you have to plant seeds about your concerns. Often there are things like the estate planning [and] tax planning that the client has no clue about, where you can save them a lot of angst and a lot of money just by being proactive throughout their illness.”
McClanahan likes to create a “triage” list of all the competing concerns, she said.
“First, you’ve got to address those client concerns and their three big concerns are usually: Do they have the finances to pay for care, especially if it’s going to be a long drawn-out illness, especially if they’re in the working phase of life and they still haven’t saved enough money,” will this decimate the family’s finances, and how will affairs be managed as the illness progresses and after death, she said.
The advisor, meanwhile, should have three top concerns: how the client can meet his or her cash flow needs, tax planning and estate plan “cleanup.”
From there, “it’s great to make sure clients have done their advanced directives,” she noted. Some people also like to do “ethical wills, where they leave their goals and dreams and have a record of their life for their family,” so that’s another potential issue to raise with clients. Last: “Have they done funeral preparations. And that’s a big area that people fight over.”
4. You may have to approach some discussions differently.
“You have to realize … that the ‘sick’ brain works differently. So when people are ill, you have to approach things in a different manner,” she explained.
This is not the time to say that clients got cancer because they smoked or agree with them that they are to blame as they beat themselves up for causing their illness, she cautioned.
“You’ve just got to tell them, ‘stop that,’” in a nice way and “be more supportive of them and say, ‘Gosh, there’s so many different things that cause this. Don’t beat yourself up. Let’s do what we can to help you move forward so that you can get through this.’”
