Welcome back to “Ask an Advisor,” the advice column where real financial professionals answer questions from real people. The topic can be anything in the world of finance, from retirement to taxes to wealth management — or even advice on advising.
The job of a wealth manager is to advise clients on their finances, not their morals. But what if an investor plans to do something the advisor finds ethically objectionable — and they want the advisor’s help doing it?
This kind of dilemma is particularly common in estate planning, as clients decide who inherits what. Is it right for a father’s second family to receive more than his first? Or for a pet to receive more than a human grandchild? Either way, the advisor’s job is to advise, not to judge.
As one wealth manager in Idaho is finding out, that’s easier said than done. In his case, a client has decided to leave an inheritance for their biological children — but not for their adopted ones.
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At first glance, this choice struck the advisor as inexplicable. But were there reasons — either moral, personal or financial — that he wasn’t aware of? What should he ask his client? And as their advisor, how should he guide and inform their decision?
These are not easy questions. For help, he turned to his fellow advisors. Here’s what he wrote:
Dear advisors,
We occasionally work with clients who have both biological and adopted children, which can get complicated when it comes to estate planning. Some parents prefer to divide their assets equally between all their kids, but others leave everything to their biological children and exclude their adopted ones altogether.
My first question is, why would any parent do this? But secondly, how should a financial advisor handle this discussion? If the clients aren’t sure how to divide their assets between their biological and adopted descendants, what are some good questions to ask to help them make a decision? How would you handle it?
Sincerely,
Idunno in Idaho
And here’s what financial advisors wrote back: