TORONTO – It is common for financial professionals to have badly outdated wills, said Dr. Thomas William Deans in a presentation here at the 2014 Million Dollar Round Table (MDRT) annual meeting. But what about the late Robert Kennedy, the U.S. Senator and former U.S. Attorney General who was assassinated in 1968?
Kennedy was an attorney and he did have a will, said Deans, who is a family business succession planning expert. In addition, the will did name an executor. But the executor was none other than the late President John F. Kennedy, who had been assassinated five years earlier.
“What I’d like to know is, who was advising Robert Kennedy?” said the president of Détente Financial Press, Orangeville, Ont., Canada.
“Who was his insurance professional? Did this insurance professional ever recommend convening a family meeting? Did he request copies of the will over the course of planning and funding Robert Kennedy’s estate?”
The story highlights the issues that Deans sees in today’s estate planning marketplace — namely, that roughly 125 million American and Canadian adults have no will, and that the intestacy (dying without a will) rate is roughly 50 percent. In addition, many others have wills that are sorely out of date.
This is a well-known problem in insurance and financial circles, but it is one that Deans believes insurance advisors can help address— by nudging clients to hold regular family meetings about family wealth matters, including death. In the process, insurance professionals may uncover additional opportunities for insurance solutions, he indicated.
Hold regular family meetings
“If insurance professionals can facilitate family conversations about money and its ultimate transfer, if they can help more families discover their will to will, it follows that you can shine a brighter light on the importance of insuring the future financial success of the family,” he said.
Writing a will should not be a solitary endeavor, Deans added. Rather, the drafting of a will should occur over time, “born from family conversation.” And the process should be about preparing heirs.
“When this preparation is coordinated, facilitated and presented as essential to any intergenerational plan by an advisor, this is how and where trust is earned. And where there is trust, there is less preoccupation with cost.”
If that discussion sounds a lot like what producers learn when getting their spurs in life insurance, the parallel was probably intentional.
Deans drew the lines between the two fields directly. “Life insurance is about providing for those who matter most when you cannot,” he said. “The intent of a will is the same; it’s a document designed for the benefit of others….It is the very difficult and inaccessible nature of this subject that illuminates the rare and invaluable work that an exceptional insurance professional performs.”
The big game hunters
It is rare to find advisors who can convene family meetings, he allowed, and of those who do convene meetings, only a few do so with regularity. But such advisors do exist, he said. They are “the big game hunters” who “thrive on bringing order to family chaos.”
In Europe, trusted advisors to multiple generations of the same family are sometimes called consigliere, Deans noted. These individuals have a symbiotic relationship with the family, in which “succession planning for the family facilitated by the advisor becomes succession planning for the advisor facilitated by the client.”
He suggested that life insurance professionals can play a similar role in the families of their clients. “The work of an insurance professional is by its very nature intergenerational,” he explained. “It’s someone doing something in the present for consideration of others in the future.”
It’s also a “calling,” he said. The calling is to help families “talk about death, to stare at death and to plan for death, and to use death instead of death using, abusing and dismantling families.”
Only 30 percent of family businesses survive to the second generation, he pointed out, and only 3 percent survive to the third generation. In view of that, business owners who gift an operating business are not leaving gifts, he cautioned. Many times, they leave “ticking time bombs” to members of the next generation who have no interest in running the business successfully into the future or who lack the ability to do so.
For insurance professionals who want to use family meetings to support intergenerational solutions, Deans had a few suggestions.
Begin by asking the right questions, he said. “Central to this process is an understanding that the correct answer is always in the room, and that advisors aren’t always called on to provide it, but rather to tease it out of their clients.”
In addition, try rekindling the ancient penchant for storytelling, in this case about the family’s history. “Advisors who can do this and do it well will reframe what a will is and, in doing so, make it one of the most exciting documents you and they write together,” he said.
Those who die intestate leave more questions than answers, he warned, noting that, in many cases, the frustration, anxiety and resentment left behind is not directed at those who have died. Rather, he said, it is directed at those who remain, “namely siblings, family and, increasingly, advisors who have made little effort to bring family to the table to talk, share and write wills.”
Finally, be willing to help the family address the often culturally-taboo subject of money — in particular, about relinquishing control over wealth “by talking to beneficiaries and preparing them to receive money and possessions, knowing that these gifts will release potential, not destroy it.”
Fully prepared heirs do not magically appear, Deans stressed. “They are the product of a deliberate process in which advisors play a crucial role.”
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