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Talking about end-of-life issues means coming to terms with mortality, which can be a serious threat to our ego. But these conversations are critical to ensuring the best possible outcome for families and loved ones. Wealth Strategist Ben Rizzuto offers guidance on how to approach the subject and the details that should be covered.
As you may know, “Ego Is the Enemy” is the title of a book by Ryan Holiday. It features positive stories and cautionary tales of folks throughout history who have either overcome or been undone by their egos.
Why might our ego be our enemy? Well, consider how many times our ego has gotten us in trouble by telling us we are smarter, in better shape, or better prepared than we may actually be. In the past, the egos of many prominent individuals have led to bouts of hubris, which in turn has led to the downfall of individuals, teams, plans … even entire civilizations, empires, and financial systems. And while we can’t predict when bad things are going to happen, we can at least try keep our egos in check to ensure they don’t lead to our own downfalls.
Ego can also lead to the downfall of wealth transfer plans. Consider King Lear, who we discuss in a one of our educational investor presentations on estate planning. Ego can lead someone believed they were better prepared than they actually were or had more time than they actually did.
This is the case I think we see most often: The client who believes they’ll live forever, only to drop dead the next day. To quote Alanis Morrissette, “Isn’t it ironic … don’t you think?”
Consider the fact that 90% of people say that talking with their loved ones about end-of-life care is important, yet only 27% have actually done so.1
Why? Most likely it’s because having this conversation means admitting that our life or someone else’s is going to end. But while it may be uncomfortable, avoiding the issue can lead to a lack of organization, a lack of communication with one’s spouse and family members, and ultimately lack of clarity as to the individual’s wishes.
Getting comfortable with the end of life means being able to plan for that eventual end. Without this comfort and preparation, someone’s wealth transfer plan may be like the 70% of plans that fail.2 So how do we help our clients – or maybe ourselves – keep our egos in check and get comfortable with the end?
This may be the most difficult part of the equation, but I feel the COVID pandemic may actually provide us with an easier entry point for this conversation. No matter how the experience affected us personally, I think we can all agree that it brought greater attention to life and death.
With that in mind, consider something along these lines as a way to approach the conversation with a loved one: “I was thinking about what happened with many people affected by COVID. They weren’t as prepared as they should have been, and it made me realize we should talk about what you’d like to happen with your finances should something happen.”
Or if you’d prefer a more general start to the conversation, consider trying something direct but reassuring such as, “I know that talking about these things is never easy…” or “We’ve never talked about this before, but…”
If you have a specific example you can share from another experience or client, this always helps make the subject more concrete. Or use the stat from above (90% of people say talking with their loved ones about end-of-life care is important but 27% have actually done so).
Once that first egotistical hurdle has been overcome, many people are uncertain about the specific details that need to be communicated or clarified in these conversations. The questions below provide some ideas, and I feel they also serve to highlight how important it is to be talking about the end of life and all the financial issues that go along with it.
How would your spouse manage financially if you should die? What impact would it have on your household income and your expenses?
A main goal of this ego-minimizing exercise is to help someone get out of their head and think about their loved ones. This question helps them realize that they need to ensure their loved ones are able to take care of themselves once they’ve passed away.
Do you know who would get what if one of you dies?
This question might help someone think more deeply about what they truly want their money to stand for or how their choices might affect the recipients. It may also allow you to talk about probate, creating or updating a will, naming beneficiaries, and/or retitling assets.
Do you both know where all the important documents such as wills, bank details, insurance policies and so on are kept?
Even if someone has taken the time to plan and create wealth transfer documents, they are useless if the surviving spouse can’t find them.
Would your surviving spouse know how to manage the day-to-day finances? If not, how could he/she start to learn about them now?
This is a great question for couples as it can lead to greater joint decision-making and taking steps to improve the overall financial acumen of the couple vs. just one spouse.
However you decide to approach these conversations, the point is to remind someone that yes, unfortunately, they are going to die. And not only do they need to come to terms with it themselves and with their spouse, but also with their children and other family members.
Many times, parents won’t want to discuss these issues because they don’t want to be a burden to their children, or they don’t want to upset their relatives. While this is understandable, the best way to respond to this hesitation can be as simple as saying: “If talking about this issue now while you’re still alive is upsetting and a burden, think about how difficult it will be once you’ve died.” Because of this, it’s also important to give clients the words they’ll need to start these conversations with their families.
Some possible conversations starters:
Not only do these prompts allow someone to communicate their wishes, they also help include children in the process. Children often feel powerless when it comes to conversations around wealth transfer or end-of-life issues and being asked these questions can help put them on more equal footing with their parents.
There’s no perfect blueprint for how to start a conversation about dying. We just have to do it – however hard our ego or our gut makes it feel – and know that we will usually feel a lot better after having these difficult conversations and accepting these facts. Plus, it can help put those you love at ease and make a very emotional situation a little easier from a financial standpoint.
If you’re looking for more resources on this subject, a few websites I’ve found to be helpful include:
If you’d like more information or support to help clients develop their estate plan, explore our wealth transfer resources.
The information contained herein is for educational purposes only and should not be construed as financial, legal or tax advice. Circumstances may change over time so it may be appropriate to evaluate strategy with the assistance of a financial professional. Federal and state laws and regulations are complex and subject to change. Laws of a particular state or laws that may be applicable to a particular situation may have an impact on the applicability, accuracy, or completeness of the information provided. Janus Henderson does not have information related to and does not review or verify particular financial or tax situations, and is not liable for use of, or any position taken in reliance on, such information.
1 Source: The Conversation Project National Survey, 2013.
2 Source: FUSE Research Network and Janus Henderson Retirement Strategy Group, 2015.