Facing Your Wealth Management Fears

Humans are adaptable animals, full of resilience and surprises, but sometimes we also are very predictable. Certain traits tend to surface in all of us, no matter what task is at hand. Most of us are dysfunctional in remarkably similar ways.

Estate planning is no exception. Faced with the monumental task of figuring out what to do with their assets through their retirement and after their death, many otherwise capable people seize up like an engine full of grit. They procrastinate, they waffle, and they agonize. They figure they’ll make their initial appointment with a wealth manager some other time, when they’re not so busy.

If you recognize yourself in that description, you probably already know that inertia is not acceptable. Whether your estate is vast or modest, the worst plan is no plan at all. But how can you get started? First, identify the roadblocks you’ve set up in your path.

Patient, know thyself.

Hanging On

Mike McConnell, principal at LarsonAllen, LLP, a Minneapolis professional services firm, is no stranger to acting as an informal psychological counselor for his clients. Recently he met with a 65-year-old client who had no ownership in his family business.

“His dad was almost 90 and had promised him for 45 years that he would turn the business over to him,” he says. “The son said to me, ‘I’m ready to retire, and I don’t have the business. My son is in the business too, and he’s never going to have any ownership. Something is going to happen to my dad, we’re going to have a big family fight, and we’re going to have to sell the business.’”

An extreme example? Maybe, but it illustrates one of the most universal principles that affect estate planning. Successful people tend to identify very strongly with their careers, and somewhere deep down, they are often loath to take steps that will sever their identity from their work.

McConnell says up to 80 percent of men experience some degree of depression when they transition out of their businesses. What keeps many from initiating the process is that they sense that it will be painful.

Successful people also tend to fear that their business—their life’s work—will suffer in their absence. Not every heir is a talented leader. Not every company retains its spark after the first generation is gone. So it’s extremely difficult to give up control.

“Their fear is failure,” McConnell says. “Their fear is that somebody is not going to be prepared [to succeed them]. So I tell them, ‘I’ve sat here with farmers whose farm has been in their family for over 150 years. I understand that this may feel like I’m saying we’ve got to cut off your leg to save you, but you’ll get through it.’ That’s usually what it takes: a peer, somebody who is objective and can say, ‘You know what? You’ll feel a lot better once it’s done.’”