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A Financial Planner's Guide To Working With Estate Attorneys

A mutually beneficial relationship

As financial planners, we spend most of our time building diversified portfolios of investments and determining the best way to achieve our client’s financial goals. While this is all well and good, we mustn’t forget about the ancillary, but no less important, parts of a complete financial plan, such as estate planning. As trusted advisors, our clients often rely on us to be the first point of contact regarding estate issues, whether we want to be or not. Therefore, we have a responsibility to our clients to understand the basics of estate planning, find the right estate attorney, cultivate this important relationship and understand both our role as the financial planner and that of the estate attorney in our clients’ lives. 


Know your Role: The Financial Planner

First, your goal in working (and networking with) with estate attorneys should never be referrals.  Instead, it should be to find the best solution for your client. I’m a firm believer that referrals come from doing an exceptional job.  But they should never be your motivation. This goes for networking with CPAs as well.

Second, estate planning is important to your client and should be important to you as well. Too often, estate planning falls by the wayside.  Many financial planners think it’s something that can be pushed off.  In reality, our clients’ assets are only going to grow, and they are only getting older, increasing the unfortunate risk of death or incapacity.  Make estate planning a priority and make it more than just referring your client to an attorney.

Every financial planner will have a different comfort and experience level when it comes to estate planning. Remember, this is a tremendously complex field; you aren’t a lawyer, so you don’t have to be the expert. This is why we work with estate attorneys.  You do have a responsibility to make sure you understand the basics of estate planning and apply them to your financial planning process.  Your goals are to identify any issues that your client may have, educate them on estate planning basics and prepare the client for what to expect in meeting with an attorney.

While our specific processes may vary, we all learn about our clients’ personal and financial lives through our work.  We gather their information, produce Net Worth statements, identify their beneficiaries, analyze their investments and compile it all in an organized manner, which we call a financial plan. This plan is the perfect tool for an estate attorney to gain a better understanding of our clients’ needs before even meeting them (make sure you ask your clients’ permission before sharing this information). We should also have conversations with the attorney prior to anything being presented to the client; to ensure our efforts are coordinated and understood by both parties.  We should be present at the estate-planning meeting to answer any questions regarding the plan, as well as make any necessary changes as a result of estate planning. Personally, I like to have the meetings at my office. The client is already comfortable with this setting, and it gives the perception that I’m still looking out for their best interests, and not just handing them off to another professional.

As a bonus, if you’re able to effectively work with estate attorneys and other professionals, you become known more as a wealth manager, rather than just an investment manager or financial planner.  Your service is more of a premium, and in the eyes of your clients (and perspective clients), you’re more valuable and your business becomes more referable.


What to Expect: The Estate Attorney

I’m over simplifying their job in an effort keep things as simple as possible, but the basic role is to:

·       Plan for the proper disposition of the client’s estate,

·       avoid probate,

·       plan for incapacity,

·       plan for estate taxes, and

·       provide creditor protection. 

By meeting with the client and assessing their needs and goals, an estate planner can create an effective strategy.  Once the estate plan is in place, they draft the legal documents, which put the plan into action.  The attorney may rely on you as the financial planner to change beneficiary designations or fund a trust with the client’s assets while making sure the financial and investment plan are aligned with the estate plan. 

In addition to educating the client, the attorney should be able to educate you as well.  Some estate issues can be very complex, so part of the attorney’s role is to make sure all parties involved have a grasp of the issues in order to make a well informed decision. You should be direct with the attorney regarding your concerns, and you should expect the same courtesy from them. 


Fitting it all together

Every practice is different. The key is to learn how each other operate by becoming familiar with the each other’s practice habits.  I’m big on systems, so when I originally sat down with my estate planning attorney colleagues, my number one goal was to understand their business processes and evaluate how they would work for my clients.  In turn, I explain in detail how my financial planning process works. This goes beyond giving the attorney your company brochure. You might want to consider creating a checklist with the information that your attorney needs before every estate plan and providing them a checklist to ensure you have the information you need once the estate plan is complete. By sharing this information, you can set expectations ahead of time; thus, avoiding conflicts and ensuring an efficient, consistent client experience. 


Final Note

We know life changes. These changes may affect both the client’s financial and estate plan. You, as the financial planner, need to communicate with the estate attorney to ensure both plans reflect these changes. Financial planning and estate planning are not just one time events, but once the groundwork is laid and a good relationship is established, changes can be implemented quickly and efficiently.  This saves you time and your client money, which would otherwise be wasted on duplicate and uncoordinated efforts. 

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