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Estate Planning: Improve Client Retention By Involving Both Spouses

As couples across the nation bask in the afterglow of celebrating their relationships on Valentine’s Day, it’s important to keep in mind that financial planning, like most things in life, is best done with involvement from both spouses.

From a financial planner’s perspective, of course, ensuring that both spouses are involved with financial planning will increase the chances that a spouse who becomes widowed will continue his or her relationship with the advisor. In many cases, estate planning can involve utilizing life insurance as a tool for replacing income after the death of a breadwinner.

Since life insurance payouts can be sizeable, a considerable amount of assets are at stake when seeking to retain widows. That’s in addition to assets already owned by clients.

With that in mind, advisors should understand a surprisingly common relationship dynamic that can be a hurdle when seeking to get involvement from both spouses in the financial planning process. In some cases, individual spouses carve out excessively rigid roles within relationships. Traditionally, of course, such roles were driven by gender.

For example, wives may have joked that their husbands couldn’t find their way to the kitchen while husbands would counter that their wives couldn’t balance a checkbook or handle other important financial documents. As Americans’ views on gender have changed over the years, however, it’s become clear that in some cases, the rigid division of labor within couples is an indirect and unhealthy way to ensure that relationships survive.

The idea is that each member of a relationship would be lost without the other member—the husband would be unable to fend for himself in the kitchen and the wife would be unable to manage her finances. With such a dynamic in place, it would be unthinkable for a spouse to sever a marriage.

In such cases, trying to involve both members of a couple in financial planning can be challenging because such efforts can appear as challenging each spouse’s efforts to foster unhealthy dependency upon each other. Advisors can respond, however, by explaining that sharing financial planning responsibilities can help spouses grow closer together.

On one hand, helping a spouse learn new skills can foster intimacy as the spouse begins to feel empowered. Such positive feelings can help the spouse feel closer to his or her significant other. It can also make the spouse feel important. After all, the process sends a message that the spouse’s feelings and desires are important and should be considered when completing an estate plan and other financial planning tasks.

Planners should also emphasize that it’s important for both members of a relationship to understand how an estate plan will work. Both spouses should know who will serve as an estate executor and where important documents, such as wills, power of attorney, and medical directives can be found. Having both spouses understand in advance what tasks must be performed after the death of their spouse, of course, makes more sense than having a widow trying to learn about the inheritance and estate management process while he or she is grieving the loss of a significant other.

Needless to say, financial planning can go a long way in helping clients obtain peace of mind in knowing that they are on track to meeting their financial goals. Advisors should therefore emphasize that both spouses participate in the financial planning process so that each member of a couple will be comfortable with actions that are being taken to reach financial goals.

In a related manner, a spouse may think he or she knows what his or her spouse desires regarding estate beneficiaries, charitable donations, levels of funding of children’s college tuition, risk tolerance when investing, and other functions. Yet in some cases, spouses may be surprised to learn that their assumptions were incorrect.

Due to the complex nature of estate planning, advisors are likely to strengthen their relationships with both members of a couple when wrestling with financial topics. The good news is that the relationships forged during the planning process will increase the likelihood that a spouse will retain the advisor’s services once the spouse becomes a widow.

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