So much can go wrong in estate planning. Financial accounts can be frozen for lengthy periods. Conflicts can arise among heirs over disbursement of property and assets. Blended families can experience trauma as tensions arise between step-siblings, step-parents, and natural heirs. Taxes can take a huge chunk of a family’s estate.
And all of these problems occur as a family is grieving the loss of a significant person in their lives.
As a financial advisor, you are on the front lines of helping families avoid estate planning disasters which will lessen the chance for survivor disputes, and allow the family to more fully heal.
Here are 5 specific ways you can help families succeed:
- Build rapport with both spouses. A death is no time for the surviving spouse to get to know you. Having a relationship with you will help the survivor feel more confident after the death of their loved one. Even if it seems a little forced at first, have both spouses involved in the estate planning process as much as possible upfront. Have candid discussions about legacy wishes, including the transfer of assets to step-children.
- Get to know the next generation. Connecting with your clients’ heirs and communicating your client’s legacy wishes is vital to avoid estate planning issues. Consider an open house or family legacy planning retreat where you gather as many of the heirs as possible to discuss wealth transfer and values. You should also explain your process so the next generation will feel more comfortable with your advice, and see you as a trustworthy guide.
- Devise a transfer plan for non-beneficiary accounts. Accounts such as trusts and IRAs with named beneficiaries transfer quite easily after a death. But gaining access to a brokerage, checking or savings account can be difficult once the custodian is notified of the death. Make sure you have a plan to re-title or transfer accounts immediately upon the death – or place the accounts within a revocable trust. This will help heirs avoid awkward disruptions in disbursements, or being frozen out of checking accounts.
- Coordinate with allied professionals.Get to know your clients’ other advisors by offering to send copies of their statements and insurance policies to their attorney and CPA. Ensure that all the estate-planning details are covered, including:
- Naming of trustees, administrators and healthcare proxies.
- Designation of beneficiaries on life insurance policies, retirement accounts, and annuities.
- End-of-life planning such as medical and health directives, and issues of incapacity with durable powers of attorney.
- Funding of revocable trusts to control all assets not previously assigned through beneficiary designations, including real estate.
- Re-titling of clients’ home, rental property, securities, and personal property into the revocable trust.
- Charitable gifting plans.
- Business-succession plans, including buy-outs and life insurance.
- Become more knowledgeable. Estate planning can be complicated. But the good news is you don’t have to know everything to serve as a valuable facilitator for your clients. Find two or three well-regarded estate planning lawyers in your general geographic area with whom you can start doing work. You can find them through client referral, the American College of Trust and Estate Counsel, local estate planning councils, or the state bar association. Find CPAs, as well, through client referral, or the American Institute of Certified Public Accountants. Educate yourself about estate planning basics on Elder Law Answers, so you can familiarize yourself with the various kinds of trusts and tax exemptions.
By taking these steps, you’ll help clients minimize their tax burden, avoid probate, as well as avoid intra-family disputes. That’s a win-win situation.