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A Guide to Helping Clients Complete Their Estate Plans

A Guide to Helping Clients Complete Their Estate Plans

Too many people focus on their current financial circumstances and don’t think about the future until it’s too late.

There are varied reasons people avoid estate planning or making a will. A 2015 survey by CNBC showed that 38 percent of individuals with investable assets of $1 million or more have not consulted with a financial professional to establish an estate plan. Among individuals with $5 million or more, 68 percent were more likely to have a plan, compared to 61 percent of those with $1 million to $5 million in assets.

According to the Financial Planning Association and other professionals, common reasons people avoid estate planning include:

  • They don’t want to think about death;
  • They’re too busy;
  • They believe their estate is not large enough to require an estate plan;
  • They’re unsure over elements of their plan, such as how to distribute assets or who should be named a guardian for children;
  • They have life insurance and expect to receive an inheritance, so they believe no further planning is needed; and
  • They believe an estate plan is expensive, complicated and must include complex elements, such as multiple trusts.

The first hurdle advisors must overcome in convincing clients to set up an estate plan is outlining the potential benefits, which include:

  • Assuring their affairs are handled the way they wish;
  • Allowing them to avoid probate court;
  • Reducing estate taxes by placing property and other assets in trusts;
  • Making provisions to care for and protect children and other beneficiaries; and
  • Protecting their assets from unforeseen creditors or lawsuits.

More complex estate plans can also address issues of succession for a family business or provide for a family member who lacks the ability to manage his or her financial affairs due to disability or poor judgment. Trusts can be designed so beneficiaries receive an inheritance in stages or can name a trustee to oversee the distributions over time.

Getting Started

Helping your clients to begin to seriously consider crafting an estate plan is just a starting point. There are a myriad of questions that need to be answered and concerns that need to be addressed before the plan can begin to take shape. This burden can be overwhelming for many clients if left to their own devices. Here are some tips to help guide the conversation and keep everything on track.

Consider Key Elements

Before meeting with an estate planning attorney, help your clients identify key elements of their plan. For example:

  • Who should inherit assets and should the assets be divided?
  • Who should care for their children if they cannot, including how to provide for children’s education?
  • Who should handle their finances if they become incapacitated?
  • Who should administer their estate plan and distribute their assets?
  • Who should be the executor of their wills? This person will ultimately be affirmed by the court and act as a fiduciary representing their best interests and those of their beneficiaries.

Take Inventory

Make a list of current assets and liabilities that will help an estate planning attorney calculate clients’ net worth and determine whether the estate is subject to taxes. The list should include homes and any other property, such as vehicles, jewelry, artwork and any other objects of value. Other elements of the inventory include financial statements from bank, brokerage and retirement accounts; safety deposit boxes or safes; insurance policies and liabilities, such as mortgages, lines of credit and all other debt.

Determine the Beneficiaries

In most states and the District of Columbia, you can disinherit anyone except your spouse (unless your spouse waived that right in a marital agreement). Your clients should also designate secondary beneficiaries in case an heir dies or a designated charitable organization no longer exists after they die.

Should a Client Establish a Trust?

Beneficiaries can receive assets directly or through a trust. The decision to create a trust will likely depend on multiple factors, such as a benefactor’s age, health and the family’s financial circumstances. There are multiple types of trusts, but a common choice is a revocable living trust that manages and distributes assets and avoids probate after a client dies. If your client establishes a trust, you will need to work with the attorney to determine when the beneficiaries will receive the assets, how long the trust will exist and what happens if the beneficiary dies before the assets are spent.

Creating the Estate Plan

A client may want to work with more than one professional expert on an estate plan. Here are some of the more common members of an estate planning team and their duties:

Estate planning team — It is not uncommon for estate planning teams to include an estate planning attorney, tax professional and financial advisor (presumably you).

  • Attorneys can craft or update wills and trusts as needed and make sure the plan meets all federal and state requirements.
  • Tax advisors help minimize taxes owed by beneficiaries on the assets they inherit.
  • Financial advisors ensure assets are managed specific to the client’s needs, goals and risk tolerance.

Take inventory and prepare — Essential documents and information the team will need or should create for an estate plan include:

  • Most recent wills, or first ones if clients have not yet had them drawn;
  • Trusts, either a client’s own or those in which a client, spouse or other heirs are beneficiaries;
  • Financial powers of attorney;
  • Prenuptial or marital agreements, if applicable;
  • Business ownership documents and information, if applicable;
  • Advance directives, such as health care powers of attorney or living wills. Typically, these documents are drafted at the same time to ensure a couple’s wishes regarding life-sustaining treatment are carried out if they become terminally ill.

Review and update — Once an estate plan is in place, you should plan to review and update every three to five years or whenever your clients experience a life-changing event, such as:

  • The death of a spouse;
  • The birth or death of a beneficiary or fiduciary;
  • Moving to another state or country;
  • A significant change in your client’s financial situation;
  • The purchase or sale of a business;
  • Divorce or remarriage; or
  • The client, spouse or a beneficiary becomes physically or mentally disabled.

The value of an estate plan goes beyond the time and money it can save your clients’ loved ones once they’re gone. Having an estate plan in place gives loved ones the assurance they’re taken care of and can serve as a valuable link between advisors and clients’ subsequent generations.


Robert Warner is Executive Vice President, Managing Director for Cleary Gull.


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