GETTING PERSONAL: Estate Advisers As Surrogate Parents


By Arden Dale © 2010 Dow Jones & Company, Inc.

When the wealthy entrust their fortunes to financial advisers, family secrets and skeletons usually come with it.

An estate attorney or trustee typically becomes a de facto member of the clan, given the role of surrogate parent, or at least uncle. He may get called on to help get one family member into drug rehab, or arrange bail for another. In between, he may hold the hand of someone who needs help choosing a guardian for a child.

A trusted adviser is "going to be privvy to a lot of issues in the family," said Benjamin H. Pruett, senior vice president and associate fiduciary counsel for Bessemer Trust Co. in Washington, D.C. His firm, for example, helped to find a psychologist in California for the child of a Virginia client.

The relationship with a long-time client "can become personal, so that we want to get in there and help," said Pruett.

Patricia M. Annino, a partner and chair of the estate-planning group at law firm Prince Lobel Glovsky & Tye in Boston, Mass., once went to an apartment rental office with a long-time client, a paranoid schizophrenic, to help negotiate a lease with unusual provisions, including an escape clause if neighbors got too loud. The woman was sensitive to noise, and especially bothered if someone on the floor above her wore high heels.

Annino also helped a disabled client to navigate a car purchase, and lent another a hand to take away an elderly parent's driver's license.

There is such a thing as getting too involved in a client's personal affairs, so a trustee or attorney needs to draw professional lines clearly. For instance, an adviser may want to offer an opinion that three arrests for driving under the influence of alcohol or drugs are a sign of possible addiction, but the adviser needs to add that he isn't an expert on alcoholism.

Losing sight of their role is an occupational hazard for advisers. Said Annino: "You can't overstep your bounds and think that, as a trusted adviser, you have more power than you do."

There is the risk that an adviser--being only human, after all--may bring his own psychological baggage to the table. And even the best of advisers can have trouble sorting out the emotional and psychological complexities at work within a family.

Thomas D. Davidow, a family business consultant who worked with families in private practice as a psychologist for years, now works alongside estate planners. He said he tells them to beware of letting feelings toward one person get transferred onto others, which can wreak emotional and financial havoc.

Davidow said he recalls the case of two brothers, fiercely competitive with one another, who ended up as business partners. Trouble broke out when their father, who had always kept the more difficult of the two in line, died, and the business was being divided up. Lawyers for the warring brothers clashed venomously.

Davidow said he was able to step in as the authority figure and still the waters, tapping into feelings the brothers had toward their dead father. He had talked to the lawyers early on about how confused emotions can derail good planning, and, once trouble broke out, reminded them of this. The lawyers, he noted, had become mired in the family dynamics. They were able to step back and refocus on financial issues once he pointed this out to them, he noted.

Arden Dale is a Getting Personal columnist who writes about personal finance; she covers topics including tax and estate planning, retirement, investment strategies, and financial needs of small businesses. She can be reached at 212-416-2234 or by email at