The voice exploded out of the telephone in anger. The client, calling at 6:30 in the morning, had opened his mail to find his investments tumbling. It was the market sell-off of late 2008, and his message bristled with rage and frustration. John Parker, an advisor with IPI at Home Federal Bank in Middlesboro, Ky., was, frankly, rattled. Those were difficult months for all his clients—but this one was different. His client's wife, in her forties and mother to their two teenage children, had, at this moment of market turmoil, just learned she was dying from an aggressive form of cancer.

"My first thought was that I must have let them down, done something wrong," says Parker. On reflection, however, he realized the depth of their distress had nothing to do with him. "Life had dealt them a blow, and they needed someone to take care of their needs, not someone worried about his own ego."

While a sick and possibly dying client is one of the most difficult situations an advisor can face, sadly it's not uncommon. A dire diagnosis will drive many people into an advisor's office, whether to free up cash for treatment, finally confront the need for an estate plan or update an existing one. It can require personal skills that most advisors have never learned. For his part, Parker had taken some counseling classes in graduate school, enough to conclude, as he puts it, that "I know absolutely nothing about it, and it's best to leave it to the professionals who do know." Yet it can also present an advisor with opportunities to grow in ways that can't be counted in numbers.

One of the first challenges is simply striking the right tone. It's difficult enough to drive a conversation about a client's death in the best of times. Terry Burns, senior financial advisor of Wells Fargo Investments, had a client who was direct and matter-of-fact about his cancer, appeared healthy when they would meet for lunch, and managed to keep running three miles a day. Still, "it was always awkward talking to him about it," Burns admits, "and it was a shock when he died."

Burns found it best to "approach the talks in a business fashion." Similarly, Hendrix Niemann, senior manager of Wealth Management and Trust Services for CUNA Mutual, recommends being empathetic but at all times professional—not coldly professional, just clear and organized. "Understand your role, and that there are other people who will tend to the client's emotional needs," Niemann says. "You might even suggest that, but remember it's not your job."

In fact, doing your job in a skilled and efficient way can be a comfort in itself. "One of the biggest favors you can do as an advisor is to help your client see that there are affirmative steps he can take financially for his spouse and children," he says. "That's a huge relief for him, and gives him something to do and think about other than his illness. It's helpful on many levels."

Offer your concern, therefore, but respect that your clients may not want to cross the line dividing "business" and "personal." Keeping your tone professional will help them feel secure. "I want my clients to feel safe in my office," says Parker, "They should know I am not going to manipulate their emotions, make them lose control and embarrass themselves."

Still, how does an advisor explicitly plan for a client's death without directly acknowledging it? John Nelson, a CFP with Addison Avenue Financial Partners, makes a point of staying optimistic, and lets the client drive the conversation. "I let the client say, 'If this treatment doesn't work...'" he says. "I make a point not to use that language." Pam Malara, a financial consultant with IPI at the Bank of St. Francisville, La., and herself a breast cancer survivor, recommends a planner listen to the client. Trained as a "Reach to Recovery" volunteer, whom cancer patients can call with questions, Malara learned what not to say: Never pretend that everything will be fine, but don't ever assume the game is over. In fact, it may not be. A doctor told the sister of Nick Rowe, CFP and principal owner of Focus Capital Wealth Management in Bedford, N.H., that her brain cancer would kill her in three months. That was 13 years ago. "A lot of the techniques we talk about could backfire if the patient lives," Rowe notes. "Be aware of that."

An advisor, then, might take the lead from his client not only in words, but also in actions. And each client is unique. For example, one of John Parker's clients, a woman in her sixties with advanced brain cancer, wanted to make no changes in her investments at all. They talked frankly about her illness, and her concerns for her family's security once she died. At his suggestion, Parker met with her, her husband and grown children, not to talk about what they'd inherit, but to let them know what arrangements their mother had made.

At the same time, the couple who lashed out at Parker in the face of the wife's disease opted to completely reorganize their portfolio. They desperately needed to believe the wife would beat her cancer, and to plan any differently would be, as Parker says, "emotionally callous." Meeting with them once every two weeks for the past two years, Parker has helped them free up cash to fund experimental treatments, and managed to keep them from selling their equities until the market had somewhat rebounded. Still, he understands that her illness has upended their financial philosophy. "When something is so out of control in your life, you try to control what you can, and that was their risk exposure," he says. "They wanted to remove themselves from the equity market altogether."

As an advisor dedicated to helping her clients grow, conserve and pass on their wealth, Malara had to fight her instincts when a hard-working client, diagnosed with metastatic breast cancer, wanted to cash out her 401(k), blow the money and have fun. "I struggled with that," says Malara. The client, in her seventies, had a husband, a grown child and two grandchildren. "But for the first time in my professional life, I thought, well, why not? Go have fun!" Ultimately, the client cashed in most of her 401(k) to take some trips with friends, and left half of her assets, the stock she held as a McDonald's employee, to her grandchildren.

"You just have to respect that this is the client's life," says Rowe. "It's for them. Our job is to give this gift, to ask ourselves, 'What's the right thing for this client right now?'"

In fact, a careful advisor may have a unique opportunity to do the "right thing" for his clients at this time in their lives. In the best-case scenario, of course, the client has a long-standing estate plan, which is totally up to date. That, however, rarely happens. More often, there is no will, or the estate plan is obsolete, the executors dead and the assets mistitled. That gives an advisor whose client is facing death the chance to draw up a solid plan or to catch mistakes in an existing one just in the nick of time.

Consider Burns's experience when he first came to Wells Fargo. The CFO of a major company had recently died. According to the client's estate plan, set up by a top law firm, his assets after death would flow into trusts to fund his minor children's education and to shield his estate from double tax. Unfortunately, the client had used multiple brokers, and his primary assets were in a Goldman Sachs account with his wife as joint-tenant-with-right-of-survivorship, leaving nothing to fund the trusts. To try to correct the problem, the bank had to explain the mistake to his widow, offending her with the implication that she wasn't competent to handle the trusts herself. From then on, Burns says, he makes sure that assets are titled correctly and that he oversees all the many pieces of an estate plan.

Indeed, an advisor can effect some dramatic rescues at the eleventh hour. Sandeep Varma, wealth strategist of Advanced Trustee Strategies, discovered that a couple married for 34 years, whose net worth was over $4 million, had their assets combined in an A trust, rather than segregated in an A/B trust, exposing them to double taxation. With the wife in hospice care, and only weeks or months to live, he raced an attorney over to reinstate the trust, keeping the original date but revising all the rest of it. That single move, he estimates, saved the couple about $350,000. "We were heroes," he says happily. Shockingly, the husband had been a trust officer for a major bank before he retired.

Don't be surprised if a client wants, at the last minute, to revise the distribution of assets among his heirs. "Sometimes people change their minds when death is staring them in the face," observes Focus Capital's Rowe. If changes are made, make sure that all copies of the old version are destroyed. To be safe, Burns advises clients to update their power-of-attorney documents even if they're making no changes. "Sometimes a third party won't accept the documents if they're more than a few years old," he says.

A savvy advisor can even help a dying client make some clever investment moves. Varma put a client's entire substantial IRA into a variable annuity, which locked in its initial value. In such a case, "we tend to invest aggressively, because it's all upside and no downside." As it happened, the market fell significantly in the six months before his client died, and Varma saved the client's spouse from an almost $300,000 loss.

Many clients are not aware that their credit card may have a death benefit: If the cardholder dies, all his balances will be paid. Rowe advised a client with a $20,000 credit limit to buy his wife a car. And a family may not know they can tap an accelerated death benefit on a life insurance policy to pay the upfront costs of a funeral, even when the policyholder has not yet died, if it was sold in the last 10 or 15 years.

An ailing client, of course, is likely to require cash to pay medical expenses. Planners advise not selling the asset with an especially low cost basis, such as that IBM stock bought 50 years ago, since death will give it a step-up in value. On the other hand, this is the time to take any capital losses, since the rule here is "use 'em or lose 'em." Whatever the play, says Cynthia Hewitt, managing director, Investments, and Wealth Management advisor at Bank of America, the planner should be clear, even conservative, since the client's heirs, more than ever, will be watching. The overall goals are the same as in any estate planning—minimize taxes, avoid probate and, most important, make sure that what the client wants done with his assets after death will, in fact, be done.

But there's no denying "it's really hard on the advisor," Parker says. Dealing with a terminally ill client generally takes twice as much face time and multiplies the emotional demands. At the same time, though, an advisor has the chance to serve a client in the most profound way, and may find the rewards far exceed the bottom line. "When you go through this with a client, with a spouse and children, you form a bond that's kind of unique," Parker finds. "It's almost sacred."