Brett Danko - Resources for Certified Financial Plannes


 

Professional Development: The Death of a Client

I wanted to discuss a question I received from an Audio Insights subscriber who asked, "What should I tell a client’s family after the death of a client or client’s spouse?"

I have never been asked this question before. It may not happen often, but odds are a client or his/her spouse will pass away over the course of our careers and we need to be prepared to address it tactfully and professionally. This situation is emotional for everyone involved and you must be sensitive as to when and how you bring up financial concerns to the client’s family. Below are some key items that need to be addressed. Think about how you would broach the subject with mourning family members. How can you approach it so the family is not overwhelmed? Is there anything that you can do on their behalf to ease the burden?

  1. Work with client’s spouse or children to gather the pertinent data for investment, tax and estate items (consider an electronic vault for certain items like estate documents, driver license, passport, burial plots, tax returns, etc.)
  2. Make sure the family pays the household bills – try not to get behind and work within a budget
  3. File life insurance claims (if applicable)
  4. If the deceased is employed, please check for any employer benefits (most notably life insurance/funeral benefits) 
  5. Contact Social Security and investigate benefits
  6. Re-title investment, savings, checking accounts and update beneficiary designations if applicable
  7. Consult a CPA to gain the step-up in basis
  8. Consult an estate attorney for estate/probate issues
  9. Avoid identity theft of the deceased (terrible, but it happens):
    • Cancel credit cards that are in the deceased name only
    • Notify the three credit bureaus
    • Cancel driver’s license and passport
    • Cancel any gym memberships, newspaper/magazine subscriptions, club memberships, etc. (check credit cards for monthly/quarterly/yearly charges)
  10. UPDATE estate plans (if applicable)

There are no "right" answers here since every client relationship (and death) is unique, but it is important that you are prepared to act professionally in the client's and family's best interest. Think through how you would approach what may be an awkward subject with a family member that you may not know. Prepare and/or update checklists or printed material that you might share. And know the laws, regulations, and responsibilities ahead of time to avoid frustrations and hassles at an already stressful time.