You can't work in this business without coming to the conclusion that families can be interesting. If families are glued together by love, trust and devotion, they seem just as often undone by anger, disagreement and resentment.
As you've probably come to realize, family squabbles take all shapes and sizes, but they are commonly fueled by one thing: money. While you can't prevent your clients from being affected by family squabbles over money, you can help them put the right safeguards in place.
Much has been made of the "Great Wealth Transfer" underway as baby boomers transfer trillions of dollars of wealth to the next generation. But what does this transfer mean for your clients, whether they are on the giving or receiving end? How can you help them navigate estate issues smoothly, while managing risk?
If your clients know what they want to happen with their estate, do they have it set up that way? Like, right now?
Time matters. It's not uncommon for people to have intentions for tomorrow that never come to fruition because people don't believe they will pass away. It isn't enough to tell your loved ones (or your financial professional) what you want to happen. Without a will, the state decides how to divide the assets belonging to an estate. If your clients are hemming and hawing, it may be time to practice a bit of tough love.
Family conversations are often easier when both spouses or partners have an active role in planning. Financial professionals report that they frequently work more closely with one member of a couple, which can create challenges if that person passes away first. Making at least one joint review meeting each year a standard practice can help ensure both partners understand the family's goals, estate plans and wealth transfer intentions before difficult decisions arise.
With blended families and second marriages, estates can become a battleground, especially if there are processes your clients didn't follow properly. For example, one situation that can lead to a contested will is an improperly signed will. Each state has laws that govern the signing of a will, including how it is signed and who can witness it.
A person can't simply make handwritten changes to a will and expect the changes to stand up in court. You need to draft a codicil, or an amendment, and you must follow the proper legal channels to draft the codicil. However, updating your will may be just as simple, according to experts.1 Amending a trust is an easier process, and your client should be able to add property to a trust (if the trust was drafted correctly).
Estate documents alone may not be enough to create a smooth transfer of wealth. A clear "transfer readiness" review can help identify gaps involving beneficiary designations, trusts, powers of attorney, healthcare directives and digital asset information. These often-overlooked details can reduce confusion, minimize probate complications and help heirs carry out a family's wishes more efficiently. Research shows that many future inheritors believe they understand what they will receive, even when important planning elements remain incomplete. Reviewing these details regularly can help align expectations and reduce future misunderstandings.
Disinheriting someone can also raise a red flag, especially if the language around it wasn't clear. If you simply fail to include someone, that person can argue that it was an oversight or a mistake, and try to contest. Also, if your client is making significant changes to a will, it may be better for him or her to revoke the will and draft a new will, versus using a series of amendments. Your client will need to use clear language that the new will revokes all previous wills. If not, it may give grounds for someone to challenge.
Honest conversations are particularly important when it comes to inheritance expectations. Too often, children think something is in place when, in fact, it's not. They may expect to inherit more, or a different percentage, than their parents intend. For their part, parents may not want to be transparent for a variety of reasons.
Perhaps they are leaving money in a trust for their children and worry it will appear to be an inheritance "with strings attached." In reality, they may simply be trying to protect those assets and ensure the money is there when their children need it. Communicating that intention can help prevent misunderstandings. When it comes to money, family and inheritance, decisions that seem clear to one person may not be clear to another.
If your clients are potential heirs, encourage them to ask questions so there are no surprises during an already difficult and emotional time. Open communication should extend beyond spouses to the next generation. While many future inheritors expect to receive some assets during a parent's lifetime, relatively few parents plan to make lifetime gifts. Discussing these intentions early can help align expectations, prevent disappointment and reduce the potential for family conflict.
It can also be beneficial to request an introduction to adult children or future executors before a transfer occurs. Doing so can help families better understand responsibilities, clarify communication expectations and reduce uncertainty. Early introductions build familiarity and can make future conversations more productive and less stressful.
Engineer continuity before assets move by scheduling regular, low-pressure reviews with your clients and their heirs. Too often, family members don't meet key advisors until after a death or major life event, when emotions are high and important decisions need to be made.
Bringing adult children, future executors or other trusted family members into the conversation earlier can help build familiarity, clarify responsibilities and create a clearer understanding of the family's plans. When everyone knows who to contact and what to expect, transitions tend to be smoother and less stressful.
Regular check-ins can also help identify life changes that may affect an estate plan and ensure documents, expectations and intentions remain aligned.
Communicate, be proactive and get it all on the table now rather than later. These conversations may feel uncomfortable, but they can save families heartache and help pave the way for a smoother transfer of wealth. Get more insights to help grow your business during the Great Wealth Transfer.
Protective refers to Protective Life Insurance Company, founded in 1907, and its affiliated companies, including Protective Life and Annuity Insurance Company.
Protective® is a registered trademark of Protective Life Insurance Company. The Protective trademarks, logos, and service marks are property of Protective Life Insurance Company and are protected by trademark and/or other proprietary rights and laws.
Life insurance and annuity products are issued by Protective Life Insurance Company, Omaha, NE, in all states except New York, where products are issued by Protective Life and Annuity Insurance Company, Birmingham, AL. Protective Life Insurance Company does not solicit business in the state of New York, nor is it authorized to do so. Variable products are distributed by affiliated broker-dealer Investment Distributors, Inc., Birmingham, AL.
Guarantees are subject to the financial strength and claims-paying ability of the issuing insurance company. Product features, availability, and issuing companies may vary by jurisdiction.
Information provided on this website is for general informational and educational purposes only and is not intended as investment, tax, or legal advice, nor should it be considered as a recommendation, endorsement, or solicitation with respect to any product or strategy. Individuals should consult their own qualified advisors regarding their specific situation.
When you visit Protective's websites, we may collect personal information from you via your browser or device, or through the use of cookies, analytics tools, and other technologies. You can exercise your privacy choices by completing a “Do not sell my personal information” request or a “Limit the use of my sensitive personal information” request. Please visit our Privacy Policy for more information about our information practices, including information about your privacy choices.
Investment and Insurance products are: NOT A DEPOSIT OR OTHER OBLIGATION OF, OR GUARANTEED BY, A BANK OR CREDIT UNION | MAY GO DOWN IN VALUE | NOT FDIC/NCUA INSURED | NOT INSURED BY ANY FEDERAL AGENCY | NOT GUARANTEED BY ANY BANK OR SAVINGS ASSOCIATION
