Financial planning as a family affair

The CDC (Centers for Disease Control and Prevention) has raised its profile in the last two years due to the pandemic—garnering often controversial reaction. Overshadowed, however, are the data from its National Center for Health Statistics.

For instance, there were nearly 747,000 divorces in the United States in 2019, according to the CDC/NCHS. The CDC also tracks Americans becoming disabled, noting there are 61 million adults in the United States living with a disability. And in 2020, CDC reported there were 3.4 million deaths in the U.S. (nearly 351,000 from COVID-19).

“In my practice, I call it the ‘4 Ds’: divorce, disability, death, and disease,” Rashonner K. Lillie, CFP®, CRPC® and private wealth advisor /managing director with Reveal Wealth Strategies, told Advisors Magazine. “And every year for the 17 years of my career at least one of these ‘Ds’ has happened to a client — and it’s not age-dependent,” she added.

Located in Houston, Reveal Wealth Strategies is a practice of Ameriprise Financial Services, LLC.

“Not discussing unexpected life changes doesn’t make them disappear,” Lillie added.

Another alarming statistic: some 68 percent of Americans do not have a will, according to theconversation.com.

In every client review meeting, Lillie ensures clients have a Power of Attorney (POA) or trusted contact person listed on their accounts, and that beneficiaries are checked and updated as necessary. She will ask to connect to beneficiaries or power of attorneys by email, so they are aware of her relationship with the client.

“It is extremely important to have basic estate documents in force because once a life event occurs it’s either difficult, costly, or impossible to make changes to beneficiaries or decision makers,” Lillie stressed. “It is also important that loved ones are involved to ensure they agree with the choices you are making for them and can accept the responsibility.”

Lillie said she has had clients that didn’t want to be the beneficiary or power of attorney on an account their parent was leaving to them. Often, she noted, one spouse isn’t engaged financially so when the other spouse dies, they have the added burden of learning to manage finances and can make costly mistakes.

“Family financial transparency is a gift that protects relationships from turmoil and confusion,” Lillie stated.

The financially disengaged spouse situation is one also noticed frequently by Christopher Mankoff, CFP® and chief portfolio strategist at Texas-based JTL Wealth Partners.


“That situation confirms my belief that both spouses or partners should always be involved and educated when it comes to their financial health and future,” he told Advisors Magazine.

“I require both spouses or partners to attend at least one of our two review meetings conducted each year,” Mankoff said. “And if I am meeting with a potential client, I will let them know prior to our first meeting that I cannot take them on as new clients unless both agree to meet regularly during the initial planning phase.”

He maintains that including heirs in conversations is just as important as including spouses. Mankoff will first encourage clients to have a conversation with the heirs or trustees prior to establishing any type of legacy plan, but he’s ready to enable such discussions.

“It must be ensured that the client’s intentions align with the trusted person’s ability, desire, and agreement to perform such tasks as health care power of attorney, financial power of attorney, advance health care directives, designation of guardian of minor children, and administering a trust as the trustee,” Mankoff explained. “If the client has not or is hesitant to have the conversation, I always offer to setup and facilitate a meeting with all parties involved to discuss the client’s wishes and educate the heirs regarding the responsibilities of each task.”

While financial advisors have long emphasized a family-centric approach, technology and other tools can now better allow them to get client families connected and all on the same page.

Florida-based Wagner Advisory Group, for instance, is led by Cathy A. Wagner, president/founder, CFP®, and her daughter, Kelsey Wagner Stockhausen, vice president. The firm’s average client age is 55-75 and their children’s ages are from Kelsey’s generation.

“We are prioritizing meetings to engage with the families of our top clients by encouraging family meetings,” Wagner told Advisors Magazine. “With the increased use of Zoom and other technology platforms, we are able to gather the whole family efficiently to have a family meeting.”

Wagner explains that this provides clients with the opportunity to share their values and wishes for their legacy with their children.

“It allows us to develop a relationship with their heirs,” she said. “The end result is more continuity as assets pass from the parent to child, but also more open communications about what is most important to our clients and their families.”
Responding to a recent concern of younger generations, Wagner and her daughter Kelsey are factoring in the current inflationary environment.

“For millennials and Gen Z’ers, inflation is something new to them and the real purchasing power of their money has dropped significantly,” Wagner explained. “If they are saddled with excessive debt — particularly in terms of student loan debt — it may become a difficult burden to overcome,” she added.

A possible positive: “If they are just entering the workforce, they will likely earn a higher starting salary than they would have, which will be beneficial when inflation slows down to historical levels,” Wagner noted.