Taking the Helm When Life Takes a Turn

August 15, 2011

By Dave Polstra, CPA, CFP®, CIMA® 

Even though I’ve been in the financial advisory business for almost 30 years, I’d never received a phone call like this before. The CPA on the other end of the line was succinct and to the point; “David, I have a client who was just diagnosed with a terminal illness, and told he has six weeks to six months to live. Can you meet with him and his wife? She’s going to need your help.”

A few days later, I was pulling into their long, winding driveway in a prominent area of Atlanta. A man in his mid-50s came to the door, introduced himself and welcomed me into his home. After meeting his wife, we sat at their kitchen table to talk about life, death and money. “I’ve always managed my family’s investments,” he began, “but my wife will need some help when I’m gone. My CPA told me that your firm could help us. Please explain what you would do in a situation like ours.”

“Well, we would begin by getting a good handle on where your finances stand today. I would want to see a list of your investments, your brokerage statements, your 401(k), your wills, your income tax return, a summary of your life insurance…,” I replied. And so began a discussion and process of pulling together a financial roadmap for a couple facing a very short deadline, keeping in mind we needed to also answer one of the wife’s most important questions, one that brought tears to both of them: “Will I be able to stay in our home after he’s gone?” You see, we understand people’s concerns run deeper than whether the stock market is up or down each day; it’s about having and staying in a sound strategy to make sure our clients stay financially comfortable and their portfolios are invested appropriately.

Driving back to the office, I thought about other clients of our firm and began to reflect on the numerous couples and widows that Brightworth has served over the years. Not only do we provide people with sound financial guidance during their lifetime, in many cases we continue to provide financial wisdom to their families after they are gone.

At Brightworth, we call this process “personal succession planning.” Just as a business plans for the future with a succession plan, families need to do the same with their wealth. A coordinated, comprehensive strategy for transferring and preserving wealth, mapping out future cash flows, designing and implementing a global investment solution, reducing estate and income taxes, and providing for family or one’s favorite charities is what a personal succession plan is all about.

Personally, my wife and I just finished reviewing our own personal succession plan. Our wills and trusts needed to be changed as our children are older and one is now married. We also wanted to update our 10-year tax and cash flow projections. Regarding our investment strategy, I knew this was in top-notch shape because like our clients, we use the Brightworth Global Investment Solution.

As for the couple who was worried about the spouse having to sell their home? I was pleased to be able to report back that she could stay there. When I told this news to the couple there were more tears, just a different kind this time. What about you? Do you have a personal succession plan for your family and/or your favorite charities? Is it up to date? Don’t wait until a ticking clock forces you to get it started, or worse yet, the clock runs out.