When stating the obvious isn’t obvious

Saturday, 01 June 2013
Martyn Gowar reminds us of the importance of presenting a sympathetic attitude to beneficiaries

A few months ago I was faced with a case where an elderly husband had died, and his widow, who also happens to be a family friend, rang me in some distress after receiving a rude letter from a gas company regarding unpaid bills. In this case it wasn’t that the husband was trying to protect his wife. They were a strong, united and intelligent family with the greatest of mutual respect. The situation was that the husband paid all the utility bills and other major outgoings from the income from his pension and other investments, and provided a sum of money into his wife’s account for the regular expenses. With his death, this arrangement ceased.

Knowledge and intelligence

The widow told me that her husband’s financial advisor had enquired about her husband’s investments. The advisor was astonished when the widow said that she didn’t know; her husband had never discussed his investments with her and she didn’t know where to look.The advisor had assumed that the widow, being the wife of a respected professional, would have known about these things.The widow felt a mixture of guilt and stupidity. However, I reassured her that in addition to her not knowing about financial affairs, I happened to know that she was not trained as a nuclear physicist either! The fact that the widow did not have the knowledge did not mean that she did not have the intelligence to understand. I suggested that when she spoke to the financial advisor again, she should have the confidence to demand that he talk to her without acronyms, and that she should stop him whenever she felt he was lapsing into jargon (and how many of us reading this, or indeed writing it, would escape that trap?).

When we take instructions for estate planning, do we ever stop and ask how other family members will cope, and if they would know where to look for this type of information? I had a client some years ago who was at the other extreme. When he came to discuss his financial affairs he produced a complete list of all his bank accounts, shares and custody accounts, with details of where to find them, and he promised to keep it updated (and I bet he has). An isolated example of perfection, you and I might think!

The limits of security

Even if the information is there, on the computer, is there a list of user names and passwords? We are all instructed not to write them down, but apart from the fact that you cannot remember them all, if there is no access to them it is going to be a major problem, not to mention expense, for those who are left. But if the list is so securely locked away, will updates and changed passwords be recorded?

My family friend will be fine, as I know she is being looked after by a very wise member of STEP. But it is a reminder that all the fine planning advice in the world is no good if the security that it is meant to confer on the nearest and dearest is not transmitted to them in a way that gives them practical comfort. My family friend faced feeling out of control and vulnerable at the very moment she was least equipped to deal with it.

Author block
Martyn Gowar

Martyn Gowar TEP is a Partner in McDermott, Will & Emery UK LLP and Editor of the STEP Journal.

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