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Use a Positive Client Experience as a Model

December 8, 2017

This time we hear from Tony D’Amico, CEO and senior advisor with Fidato Wealth in Strongsville, Ohio. He recounts using a couple’s smart decisions about estate planning as inspiration for other clients.

Earlier this year I met with a client couple to assess their estate plan. They were both still working and their asset level was already high enough that, even with their projected retirement spending, there was a very good chance there would be significant assets to leave to their only child, a young woman in her early 20s. With this in mind we started talking about whether or not a trust would be needed.

As we discussed the situation, the couple expressed concern about overwhelming their daughter with all the responsibilities that come along with the role of trustee, such as tax filings, distributions and investment management. They worried such tasks could potentially cause her a lot of stress. They had seen the beneficiaries of other families become overwhelmed trying to manage their inheritances and they didn’t want that to happen to her. They had also seen a friend spend his inheritance quickly and they didn’t want that to happen either.

As a result, they asked me to be the successor trustee, but I had to tell them I couldn’t serve in that capacity for compliance purposes. Instead, I suggested they find a corporate trustee that could fill those obligations. In the end they created a trust document that reflected their wishes, namely that if they both passed away, then the trustee would take over the work of administering the trust for their daughter. They also made sure to sit down with their daughter to explain what they did and why they did it so she knew what to expect in the future. If every client were like this, it would be incredible.

The way these clients handled their daughter’s trust situation illustrated for me how smoothly the process can — and should — go. I try to keep this experience at the front of my mind when working with other clients who are at a similar point in their lives.

It is very common for clients where both spouses are still working and who have accumulated a lot of assets to say, “We’ll think about this later. We only need a trustee if we’re both gone.” I try to get these client couples to understand that by not naming an outside trustee, they are de facto putting that responsibility on a family member — and that naming a family member as their trustee is not the best way to say “I love you.”

This experience also made it clear to me why it’s better to have these conversations when clients are approaching retirement rather than to wait until they’re in their seventies. While it can be tough to make such a conversation feel like a priority when it seems far removed from the present day, I remind them that it’s better to make decisions when their memory is sharp and their health is good.

Because I address trustee issues earlier than the norm, clients are sometimes reluctant to discuss the issue. When they are, I recall how grateful my client couple was to have the trustee situation sorted out early and thoughtfully. It’s a good motivation to encourage my other clients to do what they can now to avoid creating problems for their children down the line.