The Finance Of Longevity

Keeping Wealth in the Family

Bringing clients’ adult children into the estate planning discussion to strengthen and build new relationships

by Robert “Logan” Waters

Mr. Waters is an investment advisor representative with Sagemark Consulting, a division of Lincoln Financial Advisors Corp. Visit

You may have heard these industry insights before: 10,000 baby boomers retire every day in the United States. $30 trillion in assets are expected to pass from boomers to their heirs over the next four decades. 66% of adult children change advisors upon inheriting their parents’ wealth.

Wealth rarely, if ever, survives from the second to third generation.

While these facts can seem daunting or alarming, they also demonstrate that our industry is rife with opportunity for advisors to provide much-needed value to their clients and to stand out as elite financial planners. For most of us, our best clients tend to be older and, in some cases, already retired. They have had more time to accumulate wealth and enjoy the powerful effect of compounding interest on their finances. Many also have adult children who are not often engaged with us as their parents’ advisor. If anything, the simple fact that we are their parents’ financial planner could actually serve as a strike against us.

Yet the reason wealth tends to be lost from generation to generation is not because of poor investment decisions or irresponsible spending, as one might assume. Rather, the number one cause is a lack of communication among clients’ heirs about their financial goals and hopes for the future.

Let that sink in for a moment…

Too often, adult children are not a part of the conversation

The truth is that, too often, adult children are not a part of the conversation when it comes to their parents’ estate plans. In fact, many children first learn of their parents’ plans when they are reading their will after they have already passed. They are robbed of the opportunity to ask questions and fully understand the decisions their parents have made. Circumstances such as unexpected death or parents just not being certain of the right time and place to approach the conversation exacerbate the issue.

Regardless of the “why,” we have seen how a lack of communication between generations can result in catastrophe as our clients pass down the assets that they have worked so hard to accumulate. Conversations about how wealth was created, why that wealth was left behind to heirs (or not) and hopes for what will be done with the assets in the future are typically not had. Don’t our clients have more to leave behind than just wealth?

That begs the question: What can we as advisors do to help?

First, we should revisit our clients’ estate plans ourselves to better understand what matters most to our clients – their desires for their children and grandchildren, their fears and hesitations, and what exactly they would like to see happen in the future. Then, we should encourage our clients to have open, honest dialogue with their families about their wealth.
I have found these three tips useful in my own practice and hope fellow advisors will, too.

Revisit Clients’ Estate Plans

Taking a closer look at a client’s estate plan seems like a basic step in our profession, but I would venture to guess that approximately 80–90% of our clients’ plans are outdated. I can speak from experience, as I have seen this firsthand throughout my career. Think about the last time you sat down with older clients to proactively discuss in detail how their estate plan works versus their current objectives. There is no shame in admitting if it has been awhile. In fact, right now is an optimal time to be reviewing and reassessing the best strategies to help our clients pass along their wealth. Record stock market highs, low interest rates, as well as huge estate and gift tax exemptions coupled with substantially lower income tax rates provide the backdrop for considerable potential changes to most clients’ estate plans. 

I encourage advisors to reach out to their clients and suggest a review of their documents, given all that has changed over the last few years. This gesture has helped me grow my client relationships by demonstrating my value as a comprehensive advisor not just to my clients, but also to their respective families. Engage with a client’s estate attorney (if you have not already done so) for support in conducting this review.

Better Understand The Ins And Outs of Each Plan

I’m not sure about you, but I want to be the first phone call from a surviving spouse or child when something bad or unexpected happens to my client. Turns out most of us financial advisors are not as involved with our clients’ estate plans as we should be...

Some advisors find themselves on the periphery of their clients’ estate plans, as opposed to being at the center of them. I often ask my colleagues if they have copies of their top clients’ plans on file and truly know how they work, and the answer is generally no. I’m not sure about you, but I want to be the first phone call from a surviving spouse or child when something bad or unexpected happens to my client. Turns out most of us financial advisors are not as involved with our clients’ estate plans as we should be. And while other professionals, like attorneys and CPAs, tend to be privier to those plans, they are traditionally not as focused on motivating their clients to review and update them — so who will? Remember to take a closer look at your clients’ documents and use the opportunity to educate them about the importance of communication with their children, which leads me to my next point.

Meet With The Family/Heirs

Over the course of my career, I have seen time and time again that there are few things most clients care more about than whether their surviving spouse, children and/or grandchildren will be financially secure upon their passing. A couple of years ago, I started asking my clients during routine financial reviews if they thought it would be beneficial for me to explain their estate plans to their children. Virtually all of them said yes, and most of them set up family meetings with me shortly thereafter.

These sessions became incredibly powerful tools, as they encouraged my clients to address generational wealth planning head-on. They felt supported and empowered in explaining to their children what was important to them, such as why they decided to build the estate plan they did, what they learned on their journey to success and how they hoped their heirs would act as good stewards of the wealth they would one day receive. These meetings also served as unique opportunities for clients to show their children how, even in adulthood, they had thoughtfully planned to protect them and set them up for future success. Hosting this interaction not only afforded me the opportunity to articulate the importance of concepts such as asset protection – but more importantly, it positioned me as a proactive and thoughtful advisor who could be there to help my clients and their children make tough decisions in tough times.

We financial advisors are fortunate to work with some amazing clients. By acting as a catalyst for meaningful family conversations, we will hopefully be able to guide our clients’ children and grandchildren toward a more secure financial future, too.