Editor's note: To help CPAs meet the needs of older clients, the AICPA's PFP Section has chosen to focus on elder planning as a thought leadership topic. This is the fifth in a series of articles about planning for life transitions following retirement featuring prominent CPA personal financial planners that will appear throughout 2016. To read other articles in the series, visit the PFP Section's elder planning webpage.
Amy Florian was only 25 years old when her first husband, John, died in a car wreck, and she needed help investing life insurance proceeds. She found a financial adviser with a good head for numbers but no idea how to handle her grief.
"I stayed with him for some time because he knew how to invest my money, but it was always uncomfortable, always awkward," said Florian, CEO of Corgenius, a training firm that specializes in teaching professional services firms about grief and transition. "Any time I'd get emotional or start talking about John, he'd just change the subject. Just go back to the numbers, back to the business." That seemed normal to her—until she found another adviser who was both good at numbers and knew what to say under difficult circumstances.
For CPAs comfortable in the cool, rational world of numbers, addressing clients' emotional issues can be a messy, daunting business. But a growing elderly population means an increasing number of clients losing their spouses, and CPAs with strong emotional intelligence will have better relationships with their clients and get more referrals. Here are some tips for moving beyond facts and figures and offering appropriate responses to grieving clients.
- Deal with emotional matters first, financial ones second. Many CPAs wonder when and how to bring up financial issues in the wake of a client's (or client's family member's) death. Professionals experienced with grieving clients say money matters can almost always wait. Give people a chance to express their grief first and foremost, and reassure them that their financial issues will be addressed at the proper time.
"I always caution people: 'Don't make any major decisions any time soon, and don't let anybody pressure you into doing that. Don't do anything major for six months,'" said Dr. Carolyn McClanahan, a physician and financial planner who is director of financial planning for Life Planning Partners.
- Know your new client. In many situations where a client passes away, you may not have a relationship with the surviving spouse. The survivor may require a different level of involvement, explanation, analysis, review, or discussion than his or her spouse did. Learn and develop the new relationship, and adjust your approach when needed. Also, realize that your new client may be more comfortable working with a different CPA and end the professional relationship with you.
- Express empathy. A big part of knowing how to work with a grieving spouse is knowing what to say—and what not to say. Avoid pat phrases such as "I'm sorry for your loss" and "you have my sympathy," experts advised. Don't say, "I know exactly how you feel," because each person's grief is unique. McClanahan recommended a more nuanced emotional response, such as, "I so hate that this happened to you." Instead of repeating clichés, open the door to a more detailed response from your grieving client.
"What grieving people need at first is to tell their story," Florian said. "Because it's one of the ways we make it real, when we hear the words coming out of our own mouths. The best thing to do is invite the story: 'Oh, my gosh—would you like to tell me what happened, who was with you, how you found out?'"
Anyone can learn the right way to speak with grieving clients, said Florian, who is also author of the book No Longer Awkward: Communicating with Clients Through the Toughest Times of Life. "Some people have more natural proclivity to empathetic responses," she said. "Most of us are awkward and uncomfortable—not because we can't do it, or we don't have any natural proclivity, but because we don't know how." She teaches classes to help professionals address their clients' major life transitions such as death and retirement, and her book and others like it can offer guidance for CPAs, as well.
- Offer to assist clients where possible. CPAs often have an easier time with the next phase: addressing financial documents and issues, which is best left to a few weeks or months after the funeral. Experts recommend offering to help when the client is ready, and checking back periodically rather than leaving it up to the client to call.
Most of the paperwork will be handled by an attorney, and a CPA may want to coordinate with the client's attorney to make sure everything gets taken care of in a timely fashion. Keep your client updated on any discussions you have with his or her other representatives.
"I generally do offer to go with my clients to talk with the estate-planning attorney when they're ready to do that," said Gina Chironis, CPA/PFS, president and CEO of Clarity Wealth Management in Irvine, Calif. "Some people like that kind of personal touch and others don't."
Paperwork varies from state to state depending on estate tax laws and other factors. Chironis offers clients a checklist for the trust administration and settlement process that includes such items as giving notice to beneficiaries and heirs, making an inventory and appraisal of assets, and filling out a final tax return for the person who died.
CPAs also can help remind surviving spouses of their responsibility to address everyday financial matters, including paying monthly bills, assessing cash flow, updating bank accounts and insurance policies, and getting credit reports to check for outstanding debts. Dealing with such issues can be difficult for multiple reasons: The surviving spouse may have little or no experience handling the family finances, and tackling such tasks in the immediate wake of a spouse's death may be confusing or trigger painful emotions. Clients overwhelmed by their additional responsibilities may require assistance.
- Help your clients assess financial advice they receive from others. Let your clients know that they may be pressured by friends or relatives to make major financial decisions after a spouse's death, Florian said. Some of these people will be well-meaning, while others may be predatory. She recommended that CPAs offer to sit down together with clients and the advice-giver to discuss any of their financial suggestions.
For additional information and resources on addressing elder planning and life transitions after retirement, view the PFP Section's elder planning website. PFP Section members, inclusive of the CPA/PFS credential, can also access The CPA's Guide to Financing Retirement Healthcare and The CPA's Guide to Practical Retirement Planning.