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Financial Planning > Trusts and Estates > Estate Planning

10 Ways to Help Clients Cope With Death

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When it comes to estate planning, it’s crucial that advisors are well versed in the best estate-planning techniques and also in how to talk to clients who have just lost or are about to lose loved ones, according to experts at Fidelity’s eMoney.

This means advisors must be not only smart about estate planning but also be equipped with “emotional intelligence,” Sasha Grabenstetter, financial planning education consultant at eMoney Advisor, said during the recent webinar “Candid Conversations: Helping Clients Prepare for the Death of a Loved One.”

“There are 25 events that require the most social readjustment” for people, including death and divorce, she pointed out. After all, “your normal everyday routines are heavily disrupted and changed by the loss of someone leaving your life.”

Here are 10 tips that she and Joe Buhrmann, senior financial planning consultant at eMoney Advisor, provided during the webinar:

1. Make sure clients have taken all the right legal actions before the death of loved ones.

It is important that advisors make sure clients have selected their beneficiaries and created wills and supplementary documents, including durable power of attorney for finances and advanced medical directives (durable power of attorney for health care and a living will), as soon as possible if they haven’t already done so, Buhrmann said.

All states have a statute of intestacy — but “it just might not be what you had intended,” he said, noting that in some states the surviving spouse automatically receives 100% of probatable assets without a will in place while, in other states, the spouse receives only 50% and surviving children receive the other 50%.

2. Make sure digital documents are available.

Clients may have previously saved important documents in three-ring binders or safes and, if they didn’t, many of the legal estate documents needed would arrive by mail, Buhrmann noted.

But “we live in a digital age and, before we even get to all your digital assets” including frequent flyer miles, “many of us have already gone green” and “opted out of paper documents.”

Therefore, it’s likely that none of the legal documents concerning somebody’s estate will be arriving by snail mail anymore; it’s probably coming via email instead, he pointed out.

“Chances are we didn’t leave our login information on a Post-It Note on the edge of the [computer] screen.”

3. Don’t be afraid to suggest ways to find help.

“If you really see a client struggling and you feel comfortable enough, you could suggest to them that they go to a local or even online support [center] to connect them with others who’ve experienced their grief or life events,” Grabenstetter said.

“And I only suggest that because I’ve experienced grief myself and actually found some help in utilizing those for some of the things I’ve experienced.”

4. Learn more about emotional intelligence.

“Having these crucial conversations with clients is about learning more about emotional intelligence,” according to Grabenstetter, who pointed to data showing 25% of a financial planner’s time is spent dealing with clients’ emotions.

“Emotional intelligence can also help you as an advisor answer accordingly when that client has that really big emotion, whether that’s happiness, sadness, or even anger,” she said. “You really don’t want to be that advisor who doesn’t acknowledge your client’s feelings. We’ve probably all been there when a client has those big emotions. We want to recognize that when it happens.”

And that’s because “financial advisors today need to be more than just financial planners,” she said. “By adding emotional intelligence into the workplace, planners can elevate financial wellness of their clients, increase the level of service by being there for your client’s emotions instead of tuning out and can potentially bring in new clients based on referrals.”

5. Having empathy is crucial.

Empathy plays a critical role in being able to speak with clients experiencing great loss, according to Grabenstetter.

“When someone is sharing an emotional situation with you, that is them being vulnerable,” she said. “In return, they are looking for empathy,” not sympathy.

“Empathy is just really listening, telling your clients how sorry you are, and leading with emotional intelligence goes a long way.”

And having empathy can help advisors’ bottom lines also, she noted, pointing to research finding a “high correlation between empathy and increased sales, and also increased performance in highly diverse teams.” She added: “Empathy improves leadership ability, and it facilitates effective communication.”

To avoid burnout, it’s important advisors have compassion and “cognitive empathy,” meaning to be able to “intellectually understand the level and significance of someone else’s emotional experience … but not experience the emotions” themselves, she explained. An “over-focus on emotional empathy can be damaging to one’s work and increase burnout.”

6. Be prepared for what to say to clients after they express their emotions.

“Advisors need to be able to handle uncomfortable emotions,” Grabenstetter said. “You’ve probably experienced this a time or two. When a client comes and displays emotions you weren’t ready for, you may have gotten them, sat with them while they calmed down. But what do you do after that display of emotions if you’re comfortable discussing the situation?”

Being able to use small statements of encouragement can help a client talk about the issues and be able to then have them express themselves, she noted. “Even just being able to repeat back the last three or four words with a different inflection can help them talk more.”

Two things it’s best not to say at this time: Jump in with a story of an experience that you had as the advisor or offer ways to fix the problem, she said.

Clients may “really get stuck on an emotion, maybe when they want to sell the house, not only for financial reasons, but because that’s where their loved one died, but their emotions are keeping them from looking at it objectively,” she said. “You can kind of explore that emotion with them.”

7. Try role-playing, especially with less-experienced advisors.

“We found that only 8% of advisors are extremely comfortable discussing the most difficult topics” with clients, Grabenstetter said. “Those 8% were the most comfortable because they had over 25 years of experience.”

“The one way to fast-track younger or more inexperienced advisors to feel more comfortable discussing these uncomfortable topics is … through role-playing,” she said. “Acting out what the conversation may be like” with a client in advance “can be helpful to practice different communication techniques, especially around finances and life events.”

8. Motivate clients to act.

“Now that you’re starting to have those [important] conversations, it’s important that there’s also some follow-through to make sure the clients actually do the things that they need to do,” Buhrmann said.

“One area that we need to be aware of from a behavioral aspect is this idea of framing bias,” he added. “Individuals can respond differently depending on how the concept or decision point is framed.”

“So for example, if I say to a client that if their estate goes through probate, it might cost their heirs up to 10% of the estate value, that may not trigger a lot of a response.”

However, he said: “If I frame that by saying, ‘Hey, Mr. and Mrs. Client, in your case, 10% of a half-million-dollar estate translates to added expenses of half a million dollars that we could easily avoid with a little bit of planning.’ Now that may resonate better with the client and actually trigger a response and get them to engage.”

People are also “pre-wired to avoid loss, meaning I might respond less to a half-million-dollar gain and more to a half-million-dollar loss,” he added. “As advisors, we need to be aware of some of these behavioral biases to help our clients make better choices.”

9. Don’t overwhelm clients with too many choices.

When it comes to behavioral finance, there’s “also something called the paradox of choice, and it may be a phrase that you’re not familiar with, but chances are we’ve all experienced it,” Buhrmann said.

Pointing to the classic example of walking into a Baskin-Robbins ice cream shop with 31 different flavors, he said: “There’s just too many options to choose from. So what do you choose? You choose vanilla. Really? Thirty-one different flavors and I choose vanilla?”

He noted that “for many years, financial plans have been measured by the thickness of the binder or the sheer number and breadth of the findings and recommendations. Surely a plan with 27 recommendations is three times as good” as one with only nine recommendations, right?

In short, no. A client may be given 27 things to do and is paralyzed to start doing any of them because there are so many, and he or she doesn’t know where to start, he noted.

An advisor can give a client 27 things to do, he said. Just don’t give them everything at once, he noted, explaining: “We could give them three to do. Do those and we’ll give them three more. You know, similar to the snowball versus avalanche method of paying down debt.

“We could also give them some easier ones to do first so that they’re feeling a sense of accomplishment,” he said, adding the advisor can prioritize the actions, too.

10. Educate clients and dispel myths they may believe.

“Part of our job as a financial planner should be to inform and educate our clients and to break up any … myths in order to help keep [their] emotions in check,” Buhrmann said.

“In no other area of financial planning is there more emotion than when it comes to the topic of life insurance as part of your estate planning,” he noted. “Recognize that emotions can really impact that final decision making, making quick assessments versus cooler head analysis.”

He pointed to data showing eight in every 10 Americans overestimate the cost of life insurance, with most pegging it at three times the actual cost.

In reality, he explained: “The cost of life insurance depends on a lot of factors like your age, your gender, your health, your lifestyle, hobbies, the type of coverage, the amount and the term. Bottom line, though, is that our emotions and anchoring bias aren’t helping us with this decision.”


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