Brick Sturgeon remembers his "lightbulb moment." His clients were two middle-aged sisters who had inherited $500,000 from their father. Two years after his death, however, the money still sat in their father's accounts. Each time Sturgeon, a Raymond James advisor at Pinnacle Asset Management in Nashville, Tenn., spoke to them, they offered a new excuse: Their father's broker didn't return their calls, they misplaced the paperwork, they had no time. Finally, he realized the problem. The inheritance "represented finality to a great man's life," he says. "And they didn't want to acknowledge his death."

Sturgeon changed his approach, from What would you like me to do? to Here's what we're going to do. And when he did that, the sisters breathed a sigh of relief. They pooled their father's many accounts into one joint account, split it in half, and invested in a moderately conservative mix of mutual funds. They now enjoy the security of their money, plus the comfort of feeling that they are carrying out their father's wishes, Sturgeon says.

As the "greatest generation" dies off, leaving their assets to their grown baby-boomer children, what has been called "the largest transfer of wealth in human history" is now in full throttle. Two-thirds of all boomers will receive an inheritance in their lifetime, according to a recent study by the Center for Retirement Research at Boston College. But only about one-fifth of that transfer has occurred. In dollar terms, $2.4 trillion has already changed hands, with another $9.2 trillion still to go. This generational transfer is so massive that it represents 18% of total household wealth in the U.S.

Financial planners, who have been seeing this trend cross the threshold of their offices, are about to see more of it. And while clients with inheritances offer new business opportunities, they also present unique challenges. Advisors may increasingly find that their work requires knowledge of psychology and history even more than finance and economics. As Robin Arnold, vice president of Wealth Management and trust liaison officer of the Palmetto (S.C.) Citizens Federal Credit Union, puts it, "The easy part is financial."

One of the biggest challenges is that inheritors can be completely inexperienced with money. They tend to fall into one of two camps: Those who quickly spend their windfall, or those who are overly conservative and risk-averse. It is, of course, the second group that will make its way to a financial advisor. And for those clients, the process of planning can be very emotional. Their newly gained assets are inextricably linked to the loss of their loved ones. They may harbor feelings of guilt having seen their parents struggle to save and accumulate, only to now control those same assets that they feel they didn't earn.

Be prepared for a slow process. "We let them dictate the timeline if there are no immediate needs to be addressed," says Joe Jennings, investment director for the Maryland region at PNC. "We try to be the voice of reason, and watch that their emotions don't cloud their decisions."

In Arnold's experience, it may take several meetings before they fully understand what they're feeling. And even then, "the emotion doesn't come out until you probe." He counsels inheritors to do nothing for a while, and only later will he exert some gentle nudging.

To make such clients feel at ease, David Britton, senior wealth planner for Fifth Third Bank in Cincinnati, shares the experience of his own loss, the death of his father when he was 24. He wants his clients to know he can relate to them and respects their feelings, but he also recognizes that this is "an exercise in diplomacy." When the time comes to move forward, he looks for that "line between seeming too cold and keeping to an agenda."

The process takes time, say advisors, not only for emotional but also for educational reasons. The older generation that accumulated the wealth, brick by brick, had a firm sense of goals. But the inheritors are often faced with a set of decisions that, until now, they've ducked.

Derek Frosh, senior vice president, investments, at Wells Fargo Advisors, describes a typical couple in their early fifties who have only $60,000 in their retirement fund. "Their inheritance, if invested properly, could make the difference between 'welcome to Wal-Mart' and a comfortable life," he says. But the hardest part can simply be helping the inheritors set their own goals.

For that reason, Britton finds the key is bringing the client back to the time before his windfall. "First, we do the basic planning we would have done," he says. "And only afterward do we incorporate the inheritance to see how it affects those basic goals and what extra they now can do."

Frosh also goes back to basics. "It's Maslow meets finance," he says. First, his clients set aside a cash reserve and, to satisfy that behavioral urge, some money to spend. In his experience, "they'll do it anyway." For many advisors, "first things first" means paying off consumer debt.

Robin Byford, senior vice president at Stillwater National Bank in Oklahoma City had some clients who inherited an IRA and were going to take payments out over their lifetime. She suggested they pay the tax and dispense with their student loans instead. Advisors with higher net worth clients, on the other hand, will primarily have to merge two sets of investments into one. In that case, look for concentrations of assets that need to be diversified.

Unfortunately, inheritors often feel "emotionally anchored to stocks their parents held," says Byford. They feel a sense of stewardship and can be unusually risk-averse.

Kurt Carter, Byford's partner and fellow senior vice president at Stillwater National Bank, had some clients who wanted to keep inherited shares of a local gas company to pass on to their children. Carter tried to explain that today's market offers many options, that a relatively young investor could enjoy greater growth, and that "companies rarely do well for 100 years straight." His technique: Invoke a third party. "I pull out the research, and say 'Raymond James has this as a sell,'" he says.

Similarly, to encourage diversification, Brock Kidd, senior vice president of Pinnacle Financial Partners in Nashville, Tenn., has the challenge of easing his high-net-worth clients out of long-held positions and into those that have recently performed poorly. He'll cite modern portfolio theory and the work of Harry Markowitz, discuss Gary Brinson and Ibbotson research.

Sometimes, they'll diversify some but not all of the parent's investments, trimming a 20% position to a 2% one. He counters their conservatism with shock treatment by telling them the only guarantee he can make is that their investments will lose money. "It's a funny moment but makes a great impression," and drives home the point that they should expect volatility. If the client chooses not to follow his advice, he doesn't hesitate to suggest they'd be better off with a discount broker.

The inheritor's inexperience can make him not just conservative but downright suspicious. A bank-based planner has the advantage of an institutional setting, but must sometimes go beyond that to establish trust. Pinnacle's Sturgeon tells all new clients exactly how he gets paid and encourages them to interview other advisors. He even goes so far as to show them his own personal brokerage statement. "If I'm going to ask someone who just inherited money to show me all his assets and debts, why not do the same?" he says. "I am like Sy Sperling of the Hair Club. I am the typical client."

Frosh advised a couple in their early fifties who were both skeptical and scared. "I encouraged them to talk about what they'd like their retirement to look like," he says, and they no longer felt they were "being sold."

That said, an advisor can also build trust simply by suggesting the right product. For cautious inheritors who only know and feel comfortable with CDs, Chris Cravens, branch manager at Coffee Financial in Manchester, Tennessee, has found a good bridge in callable CDs. They're FDIC-insured, pay significantly more interest than other CDs, and even carry a death benefit. Another move that respects an inheritor's wariness but serves his long-term interests, Craven has found, is to roll an inherited 401K into a decedent beneficiary IRA. It avoids probate and grows tax-free during the inheritor's entire lifetime. He can even withdraw money before age 591/2 (though he'd then pay taxes) because the funds are inherited. Cravens retains the assets on his books, and the whole family as his clients.

Stillwater National's Byford suggests another rock-solid use of inherited money is to catapult an heir's retirement savings.

Occasionally, the titling of an inheritance can cause tension in a marriage and a sticky situation for an advisor. The question is: Should the inheritance of one party be deposited into the couple's joint account, or remain solely in the name of the heir? In Tennessee, for instance, an inheritance in a joint account will be returned to the heir if a couple splits up soon after, but belongs equally to the spouse with the passage of time. Do the clients realize that? Sometimes the problem solves itself, as when the spendthrift husband of a couple that Arnold, of Palmetto Citizens, was advising directed that his wife's inheritance be entirely in her control. "But it doesn't always happen like that," he says ruefully.

Advisors suggest the subject be broached head-on, but delicately. "May I have permission to speak frankly?" Sturgeon will say. "I need to ask some sensitive questions."

Partners Byford and Carter take a bolder approach: "We just say it," she reports.

But advisors working with inheritors often learn their own limits. If Isaac Newton had been a financial planner, it could have been his Fourth Law: A spender with a windfall will soon spend it, and a more frugal heir will salt it away.

Advisors can often spot the difference within minutes, yet can do little to change it. Frosh of Wells Fargo remembers a grandmother who died on a Saturday; her sole beneficiaries, a mother and son, were at the bank to withdraw her funds on Monday morning, even before they had a death certificate. And Sturgeon has the phenomenon down to a formula, literally: "The value of the inheritance divided by the heir's outstanding consumer debt will equal the number of years it takes to blow through the money." So, an heir with credit-card debt of $25,000 and a $100,000 inheritance? Four years, tops.

Still, there are moments an advisor can savor. Frosh's own mother was one who defied "the Law." A spoiled only child who became a single parent working in sales, she ran up credit card debt and depended on Dad to bail her out. But once he died, she radically changed course. She put part of her inheritance into an annuity, part into dividend-paying stocks—and became a financial advisor.

Byford had a client who loyally took care of her mother, but put off taking care of herself. The eventual inheritance allowed her to retire and finally do what she'd always wanted.

Some people make generous gifts, though Kidd of Pinnacle Financial is careful to let gift ideas come from the client. He has seen heirs make inspiring tributes to their parents. Less dramatically but more commonly, an inheritance can be what Britton calls "a sad but profitable moment." The client who drew up a financial plan five years ago but hasn't fully followed it, can use this chance to get back on track.

Every situation seems to demand skills that are both psychological and financial. In the best of cases, "you have actually helped someone with significant issues make some good choices, and can see the inheritance change his life," says Arnold.

One such client was a recently divorced woman of 61 with just $10,000 in an IRA and three children living at home, one of whom had special needs. When she inherited $125,000 from her mother, she wanted to use it well. Arnold had her pay off $12,000 in credit card debt and a $30,000 home-equity loan, spend $7,000 for a needed new roof, buy both small life-insurance and long-term care policies, invest $60,000 in a fixed annuity, and add a special-needs trust to her will. "With even a modest inheritance, you can do a lot," Arnold says. The client freed herself from burdensome monthly payments in the present and provided herself and her children some security for the future. "You get to pull in all of your expertise and experience," Arnold says, "and that's why I'm in this business."