Michael Mendelsohn, Principal, Briddge Group

An advisor has a 35-year relationship with his client/friend.  He helped him incorporate, purchase real estate for his business, purchase other businesses, create the proper financial plans and working with the local trust company and financial advisor, integrated all of his client's business and personal assets into an efficient estate plan years earlier.  After the passing of the client, and soon his client's wife, the attorney called upon the daughter to discuss the next steps regarding the estate.  The daughter suggested they meet at her parents' home. 

Several weeks later, the family advisor entered his client's home and quickly remarked, “Gee, I never noticed your parents had such a vast collection of art and antiques.”  He then quickly asked the daughter what she wanted to do with the collection.  Having just lost both her parents, and in the midst of a divorce, she said to the family's long-standing and trusted friend, “Can you handle this?”  

Does this sound familiar? In reading the above, are you comfortable as an advisor with this scenario?

Using conventional wisdom, the advisor, now involved in “surprise” estate planning, called a local auction house that said it would “take care of everything.”  Several months later, he was pleased to see the auction results yielded more than $500,000, with one piece of furniture in particular selling for $68,000.  When he reported this to the daughter she said, “That was Mom's favorite piece!” 

We now fast forward eight months later.  It is a Monday morning.  The advisor is in a great mood, having won eight dollars from his golfing buddies over the weekend, when he is told his client's daughter is on the phone.  It seems that over the weekend her aunt called her after reading about an auction in the newspaper. The aunt said that Mom would have been so proud that her side-by-side (the piece that yielded $68,000 in the estate auction) had sold in a New York auction for $725,000. The daughter was shocked – and upset.

Are you still comfortable as the advisor in this scenario? Will her next call be to the local litigating firm? The advisory team obviously did not do their homework, which starts with the proper intake questionnaire dealing with all assets.  Listing tangible personal property under the heading of “other” will almost always result in you becoming  an involuntary curator of your client's art and antique collection.  Is this a job you want?

Michael Mendelsohn, Briddge Group

http://www.briddgeartstrategies.com/contact.html

michael@briddgegroup.com