Many times, advisors do not understand the great potential in encouraging their clients to do estate planning. Here is a common story in my office. Just the other day, I got a call from a prospective client. His family situation is one that I have heard repeatedly over the years. With sadness and concern, he said, “I need to get my ducks in a row and do my estate planning. But the biggest problem that I have is that one of my adult children really has issues. They have really messed up.”
When we meet with clients it often becomes clear to us that often seniors are still writing checks to help out and/or bail out loved ones who are vulnerable and/or who have destructive lifestyles. It may be a child who’s been disabled either physically or mentally since birth; a child may be living at home or in some type of group home setting. It may be a child who is currently in an abusive relationship. It may be a child that’s never been able to, and likely will never be able to, handle money. It may be a child that had (or still has) an addiction.
Whatever the reason, these parents know that they have a vulnerable adult child who will need continuing care and support. This is an important place for the insurance professional to show how life insurance can be an important part of the solution. No matter how good an estate plan is designed by the attorney, at some point in time after the parents are gone, this adult child is going to continue to need money and financial support.
The role of the capable estate attorney is to be able to protect the insurance proceeds within a trust wrapper. The trust would be the rule book that governs payouts of proceeds for the needed expenses of an individual. The rule book would encourage good behavior and not fund the bad habits. That trust can include controls that help to pay for rehab or potentially keep the assets protected from an abusive spouse. There are as many ways of creating that wrapper as there are circumstances that cause a client to need to create a specific distribution lockbox for that adult child.
This is a place where you as an insurance professional can make a real difference in helping families to appropriately leverage the value of life insurance to help fund appropriate support for an adult child with substantial challenges.