Let’s pretend you are not here

Kevin Deamer makes a point of rehearsing what happens when the time comes for Executors to complete all the necessary paperwork.

We suggest to elderly clients that we enact an ‘IHT400 Audit and Rehearsal’ fairly early on in our relationship.

We pretend we are the Executors of the Estate and audit what exists to fill out all the HMRC forms. By intervening at this point we can deal with the gaps so that when it comes to it, families can deal with their loss knowing that everything is in order.

In most of our client relationships it’s the husband who goes first and they are the ones that manage the financial affairs and don’t always write everything down. This exercise is a great way of working with them to make sure everything is in place. It can be scary for the surviving client when they are not used to dealing with finances.

Often the husband carries information in his head or on spreadsheets that are hard to access. This helps to eliminate any nasty surprises.

I often describe the process to clients as ‘Reverse Nesting’. Just as a woman nearing the birth of a child begins to get everything ready for arrival day, buying all the right clothes and preparing the room, this is a chance to get everything ready for the less knowledgeable partner. This way we make sure everything is in order and when the time comes they can concentrate on other more important things.

Good learning point

One male client, diagnosed with terminal cancer and given nine months to live, took the time to put a little green book together for his wife.

This included everything: regular bills that needed paying, house and car insurance, plumber, boiler and even how to use the Sky TV control. He left behind detailed notes about all the day-to-day finances and running of the house. He wrote down all the dates that everything needed to happen.

I have a photocopy of this and can easily refer to it when I get a call. This was not just practical, it gave my surviving client comfort and something she could keep near to her at all times. This is now something we encourage all clients to do.

Also, when some older clients have difficulty in spending money, we spend time having a conversation about it. We ask “do you want to be the richest in the cemetery?” By demonstrating how much surplus wealth is available you can give such clients permission to have a treat, more holidays or just the ability to help others.

Just using cashflow modelling doesn’t make you a Financial Planner, asking the right questions at the right time does.