The Devil in the Details: Check and double check when making client decisions

“Hi, my name is Randy and I’m a number cruncher. I admit that I can’t recommend anything to a client without running a projection. Or two. Yes, I know it slows down the sale. Yes, I know once I show them the first set of numbers that they’ll want to see another version. And another. But I can’t help myself. I’ve tried. God knows I’ve tried.”

How clients willing sign documents or divide or invest assets or make decisions in a void has always puzzled me. I’m almost certain that those piles of unsigned or unfunded estate planning documents is because those same clients have no idea what the consequences of their signatures will be. Will they have enough cash flow to maintain their lifestyle? Will the tax deduction really pay for the life insurance like the advisor promised? 


Are we too lazy or too afraid to show our clients potential outcomes and what ifs? Are we in such a hurry to implement a plan that it’s more important to skip ahead than it is to have our clients comfortable and aware and confident that they’re making good decisions?


Recently I was brought into a case where there was a proposal for a large transfer to a Grantor Charitable Lead Trust. Seemed like a good idea to reduce a very large taxable estate.  Other alternatives were less effective. They had already drafted the documents and hired the appraisers and transferred most of the targeted assets. Then I crunched the numbers. And it wasn’t good. There was so much taxable income and so little real income for the grantor, that he was essentially going bankrupt year by year. Oops. Big oops.


The number crunching intervention stopped the plan from proceeding. We were able to slow the process; re-examine the amount transferred and keep the negative cash flow manageable and acceptable.


Take the time. Slow down. Your clients don’t want to be hurried. The need to examine good ideas and understand all the consequences is vital to everyone’s success. We take for granted that our clients understand what we’re talking about and trust us to help them navigate the complexity of planning decisions.


#charitableleadtrusts #decisions #estateplanning #planning

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