Compassion and empathy should be the immediate first response for a client who has experienced sudden tragedy.PeopleImages/AFP/Getty Images
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Most people will experience the death of a loved one at some point in their lives, and financial advisors can help them navigate the ensuing financial and emotional fallout of estate planning. But what if the death happens suddenly?
Heather Holjevac, certified financial planner (CFP) at Holjevac Financial Group in Mississauga, was shaped by the sudden passing of her mother-in-law 25 years ago. Newly married, Ms. Holjevac learned early on about financial upheaval from that tragedy as the family had no life insurance and her father-in-law needed to sell his house to stay afloat. She adds the family’s grief was insurmountable.
“No matter what anyone says, it takes a while to let [the tragedy] sink in,” Ms. Holjevac says. “It’s just such a shock and you’re completely numb.”
Darcie Crowe, senior wealth advisor and senior portfolio manager with Crowe Private Wealth at Canaccord Genuity Wealth Management Canada in Vancouver, says compassion and empathy should be the immediate first response for a client who has experienced sudden tragedy.
“We need to express our deep condolences and let the family know that we are here to support them in any capacity when they’re ready to begin working through the financial matters,” she says.
But Ms. Crowe acknowledges the family will often need several days or weeks to process its loss. If the deceased was a client, advisors can gather the important documents such as wills, powers of attorney for property and personal care, as well as insurance policies and have them ready for the executor and surviving family members when needed.
“We can get a head start on beginning the estate process,” she says. “This may entail processing account rollovers as we are able or taking the lead on coordinating with beneficiaries, lawyers and accountants so progress can be made behind the scenes if that is the family’s preference.”
Gathering information for the family
Ms. Crowe notes that when the grieving becomes more manageable, many surviving family members look inward at their own situations and are determined to make things easier financially for loved ones. Besides setting up wills, powers of attorney and life insurance to start, the executor needs to know where to find these documents, along with other paperwork such as tax returns, investment statements, property deeds and marriage licence, she says.
She also helps clients prepare a family emergency file, which details all the required documents they need to gather and notes for the executor on where to find everything. She suggests including contact information for all the client’s professional advisors, including lawyers and accountants.
Clients also need to consider their digital lives when they pass away, something that’s often overlooked, Ms. Crowe says. These days, most treasured photos exist online in the cloud and heirs would like access to them so they don’t lose the memories. She suggests setting legacy contacts for online accounts and having logins/passwords in the emergency file.
Family discussions about intentions are always a good idea to avoid estate squabbles in the future, she adds.
Considering the complexity of an estate
Softer issues also need to be considered in estate planning, says Mehul Gandhi, managing director and senior insurance advisor at Westmount Wealth Planning Inc. in Vancouver.
He encourages clients to imagine the state of mind of their heirs if they were to pass away suddenly. The survivors will be grieving and taking on the huge task of managing an estate. Mr. Gandhi asks clients to consider whether their estate is something one person could manage as executor or should it be multiple people.
“Depending on the complexity of the situation, it could be a lot for one person to take on,” he says. “A professional trustee might be more appropriate in that case.”
Managing an estate can take a year or more, and grieving can be even longer, Ms. Holjevac notes. She had a client who recently lost her husband. She met with the surviving spouse several times and found the client struggled to make decisions for some time.
“She was just devastated. She just didn’t know where to turn,” Ms. Holjevac says. “She felt lost because he had done everything.”
Ms. Holjevac recalls that feeling of hopelessness and uncertainty. With her mother-in-law’s sudden passing, Ms. Holjevac found herself as the new matriarch, organizing all the family events around the holidays. But she says the memory of that tragic death enables her to give more grounded, practical advice.
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