Legacy Planning Isn’t Just for Rich Clients

Oppenheimer’s Ed Harrington on How Financial Advisors Can Best Approach Legacy Planning for Clients – And Why It Isn’t Just for the Wealthy

Ed Harrington is the head of Oppenheimer’s Private Client Division, a unit that has grown substantially over the first half of this year, with much of the growth in the business over the past year driven by adding financial advisors who serve non-U.S. clients.

At the end of the day, though, it doesn’t matter whether clients live in this country or abroad. Many of their concerns are the same, he says, with legacy planning becoming increasingly top of mind on the list of client priorities.  

It’s a well-worn truth that many people don’t like to think about what happens after they are gone.  Scenarios that force individuals to confront their own mortality are seldom pleasant to contemplate.

But at the end of the day, all clients need a legacy plan no matter how much money they have. WSR sat down with Harrington to capture some of his thoughts on this topic.

WSR: Let’s start with an easy one: What does legacy planning mean to you? 

Harrington:  This is a deeply personal and emotional process that means different things to different people. But, to me, at its core, a legacy plan must answer one simple question: What does a client want, for who and what they care most about when they are gone?  

Of course, coming to grips with that question is often a complex process, with the answer likely to change with time – which is why it is critical for professionals in this space to remember that legacy planning is more than a single piece of paper or a one-time event. 

WSR: Some financial advisors believe that legacy planning is only a serious concern for their wealthier clients – true or false? 

Harrington:  Absolutely false. While the rich and famous who neglect this process often make headlines, legacy planning is for everyone, no matter how wealthy. For any client, it can start with something as simple as what to do with their assets and evolve from there. 

It doesn’t have to be a big chunk of land, a house with seven bathrooms or an investment portfolio worth eight-figures. It could be as something as simple as a baseball card collection, or anything that has emotional value to them and their family. 

Beyond that, there’s the fact that some clients live for 100 years, while others pass far too young. No one can control those factors. Still, advisors can help a client tell their life story after they’re gone and put their affairs in order before that happens. 

Oftentimes, the burden of grief is compounded by the burden of guessing and having to attend to the affairs of an estate without any concrete understanding of what the decedent’s wishes would have been. Such periods are complicated and painful – but it doesn’t have to be that way.   

WSR: How should advisors help clients start the legacy planning process? 

Harrington:  The first step is to encourage clients to spend time thinking about what they want to do with their physical assets and how they would like to represent their values. For anyone, taking the time to consider all aspects of your life can be difficult, but this brainstorming period is critical.  

What comes next depends entirely on their goals. For most people, it includes speaking with loved ones openly and honestly. Then it’s time to come up with an actionable plan with understandable directives. This eliminates much of the burden that loved ones may feel while grieving. Making this difficult period easier is an incredible gift to provide a client and their loved ones.  

WSR: How do you suggest making legacy planning a process and not an event? 

Harrington:  Ideally, revisit this process during every client meeting. At a minimum, do it annually. I find Tax Day to be a great time for this. Clients already have much of their financial information in one place then. So, adding an additional step at this point is relatively easy. It can be as simple as asking: Has anything changed in your life that needs to change in this plan?  

Keep in mind that societal, political, and legal environments have become more complex over the past 20 years or so. To help a client achieve their legacy goals, regardless of how they change over time, advisors must regularly reassess the social, political, and legal landscape.  

WSR: If you could leave readers with one thing about legacy planning, what would it be? 

Harrington:  The burden of grief should not be compounded by the burden of guessing. It’s also better to be able to approach the future with facts and clear directives. 

So, the more you can do for a client while they are still here, the easier it will be for their family to respect their wishes after they are gone. 
 
James Miller, Contributing Editor & Research Analyst, can be reached via email at ContributingEd@wealthsolutionsreport.com