The Workshop

Cleaning Up The Mess

The Story

Dan and Jane Snyder are clients. Last summer they moved Dan's parents to a senior independent living community near their home. It was tough to uproot them from their small community 2 hours away, but it was necessary as both parents were in declining health. Dan's mom passed away in late February and his Dad, while still living alone, is not doing well. Dan shared that he repeatedly had asked his dad to make a list of all things financial, but his dad had yet to start this very important project. Dan requested that I visit with his dad and see what I could do.

One Saturday morning I drove to the senior community for a scheduled visit with Dan's father. I knocked on his apartment door and waited. It took quite some time for him to get to the door as walking has become increasingly difficult. He invited me in and offered me a cup of coffee. A quick view around the apartment revealed that every flat surface (tables, countertops, chairs, etc.) were covered with unopened mail, paper, newspaper, magazines, etc. A slightly closer look showed return addresses from insurance companies, banks, lawyers, wire houses, etc. The first thought that ran through my mind was, "I wonder which of these envelopes contains an unanswered premium notice from an insurance company on a policy that has been in force for many years and is about to lapse."

I sat down with Dan's dad and we spent time talking about his wife, his current life and his hopes and dreams for his children. The conversation turned to financial matters and I learned that he had not filed a tax return for 3 years! He said that he would have no trouble maintaining his current lifestyle (covering his senior community living expenses), but he truly had no idea of the value of life insurance and his investments. Further questioning revealed that he had done little to no planning for minimizing the tax consequences on the transfer of this wealth to his children. Since his wife's passing, he had not made any changes to stock held (he wasn't even sure what stocks his wife owned in her long time stock club.). Beneficiaries and ownership of life insurance policies were never addressed. In short, when it was time for this wealth to transfer, the potential for complications was significant.

Next Step: The Fix

Dan's dad agreed to allow me to "quarterback" the fix. We plowed through the stacks of envelopes and paper disposing of the unimportant. My fears were well-founded. We found:

- Unpaid bills
- Bills for services that haven't been used in years (until recently he was paying these)
- Premium notices for insurance policies that had now lapsed for non-payment
- Trust paperwork awaiting signatures and funding
- And much more!

Once we understood everything that was there, we spent time completing the ignored tax returns. Can you imagine the difficulty in addressing this with the IRS if he was not around to help? We changed ownership and beneficiaries on life insurance and securities. We made decisions about insurance policies with sufficient cash value . . . and there were many. Dan's dad wanted this life insurance to serve as a legacy for his children and grandchildren. It was not about the cash value. We completed a list for all 4 children of the various assets in the estate and their location. We bought a file cabinet and organized all paperwork. We sat down with an estate planning attorney and began the process of tax minimization. We set up automatic bill pay with the bank. In short, we took away the burden of day-to-day financial management. He still felt in control of his financial life, but the tasks were far fewer.

You can use your imagination to understand where my revenue was on this case, but that was not the starting place. Genuine concern for Dan's dad and his children is where it all began. The potential gigantic pitfalls was the family's motivation. Who would want to distribute this wealth knowing that the IRS might be knocking on their door if so many things were not resolved?

I was proud of what we did here. Dan's dad was no longer worried and overwhelmed. Dan and his siblings were no longer worried about the unknown. And by the way . . . the case did generate nice revenue. All four children became clients and the administrator for the senior living community is encouraging all independent living residents to speak with me. These facilities are not inexpensive and, as a result, most resident have cobbled together significant estates!

Marketing Idea
Our Generation and Our Parents

It occurred to me that this is not an unusual situation. My Mom is 90 years old and my friends have parents living close to the century mark. Modern medicine and science has given us the privledge of having our parents as part of our lives for many more years than past generations. The older population--persons 65 years or older--numbered 39.6 million in 2009 (the latest year for which data is available). They represented 12.9% of the U.S. population, about one in every eight Americans. By 2030, there will be about 72.1 million older persons, more than twice their number in 2000. People 65+ represented 12.4% of the population in the year 2000 but are expected to grow to be 19% of the population by 2030. These people need our help. In fact, their children, will likely need our help as well.

Tell this story in your marketing. Offer to help quarterback the "cleanup." Put together your team of a banker, attorney, financial advisor and CPA. Offer to assemble their information in your own "Estate Organizer." You will discover that this kind of support is welcome and provides you with an opportunity to dig in and understand the entire financial picture without being "that guy who wants toll sell me insurance and get my money." Then when you make a financial recommendation, it will be received with open arms.

There is a need. Fill it!!