Estate tax planning has always been a tricky business. But this year's revisions to the gift and estate tax sections of the code and the scheduled 2011 rescission of the 2010 repeal (do you believe this?) put at risk the advice of even the greatest oracles. Sure, as personal advisors we need to be current on the tax-planning essentials, yet for all but the simplest situations, most of us tend to rely on attorneys and CPAs who specialize in estate planning.

So how can a personal financial advisor, who is not an estate tax specialist, add value when it comes to helping clients pass assets efficiently to the natural objects of their affection? It has been my experience that there are two general areas in which we are in the very best position to help. The first one is in encouraging clients to think and talk about the prospect of dying, about how they would prefer that their affairs be arranged and how they would like to be remembered. And the second is by raising a great many what-ifs to help them direct the drafting of their documents.

It's Often Up To Us

Have you noticed in your practice that very few of your clients first came to see you out of concern for their estates? They come for help with their portfolios. They come with cash-flow issues, like college costs and retirement spending decisions. They come with insurance and income tax questions. In other words, they come to you with the concerns of the living. I think the only people who have made their first appointment with me to get help in passing assets to the next generation are people who have recently lost a spouse or who have been diagnosed with a life-threatening condition.

And have you also noticed how high a percentage of the people who come to see you with the ordinary concerns of the living have no wills, or have 20-year-old wills or beneficiary designations that make little sense? As you gather and review their financial data, estate planning issues jump off the page at you, right? And you become the one person in the world who can help them engage the questions and make some very important decisions.

A good estate planning attorney could certainly help these people, but they may never get to his or her office. They get to your office and mine for other reasons, so it becomes our duty and privilege to raise estate planning issues and start the process.

Nobody Wants To Die

Most of the clients with whom I have worked are at least a little reluctant to talk about their mortality, often deflecting my initial probes with small jokes and nervous titters. Dying is, understandably, an unpleasant subject. So, it presents a wonderful opportunity to serve your clients by helping them more comfortably consider the emotional and practical issues surrounding their eventual demise. It will mean a lot to them that you are comfortable with the subject. Think of it as taking them firmly by the arm and guiding them across a busy street. If you don't offer to help, they may stand there on the curb for the rest of their lives!

As an important aside, I have found that most people of any means at all have a persistent nagging in the back of their minds that they need to put some order in their affairs. But they don't know where to start. Helping clients approach the emotionally and technically complicated subject of estate planning, as daunting as it may seem, will set you apart from any professional advisor they have ever had. Because the subject is so intimate, estate planning may be the very best relationship-building opportunity you will ever have.


The easiest time to broach the subject, if the client has not already done so, is in your information-gathering meeting. It is less threatening at this stage because it's mixed in with other issues. A simple, "Are your wills current?" opens the door. Even this innocent question may let the hornets loose ("I've been trying to get him to make a will for 20 years!"). But usually it just gets the latest documents on the table for you to look over, or makes it clear that there are none ... which happens about half the time in my experience!

In cases in which it appears the documents may be inadequate (or nonexistent) I've learned not to look shocked; it could be interpreted as judgmental, and that's no way to build confidence. Instead, I like to say something like, "Tell me a little about what you would like to see happen for your family if you should suddenly depart the planet."

Any sort of general question that you feel comfortable with will usually prime the pump, and you may experience a sudden gush of concerns, issues and even hopes and dreams. At this point, your job is to listen, take it all in, begin understanding what is really important to your clients. Because now they are trusting you.


Sometimes, though, it's not so easy. You may need to supply a little motivation or stimulate the conversation with a few "for instances" specifically chosen to resemble your client's own issues. Here are two estate planning concerns that are lodged someplace in the worry lobe of many clients' minds.

Guardianship: When clients have minor dependents, this can provide the single most important motivation to get documents in place. Your engineer, architect and teacher clients aren't usually familiar with the legal complexities surrounding the care of orphans. And, of course, because the thought is harrowing, people block the possibility from their consciousness. Stories of real people are always influential, so I usually talk about the challenges I experienced dealing with the courts when my younger brother died intestate, leaving his son an orphan. Making a will always pops to the top of the to-do list after I share this experience with parents of minor children. Your own stories, from your life or your practice, can be surprisingly powerful.

Taxes: I have been amazed that 90% of our new clients already know about the availability of a lifetime exclusion from estate taxes. Surprisingly, though, many don't understand the unlimited marital exclusion. And the concept of a bypass trust is foreign to most of them, especially those who have no wills or whose wills were prepared when they were young and poor. After the guardianship issue, the most powerful motivator to update estate documents is mentioning casually that new wills might save the family a half million dollars! All of a sudden, a few thousand bucks to get the work done is not such a big deal.

And here are two topics that you can depend on to stir a client's legacy instincts; they spring from the healthy human desires to be remembered and to make a difference.

Grandchildren: I don't know if this is valid as a generalization, but we have seen many family situations in which the grandparents (our clients) are very secure financially, but some of their adult offspring live nearly as hand-to-mouth as they did in high school. Some of these grown children suffer difficulties not of their own making, and for these children, our clients are inclined to make some special estate provisions. More often, the impecunious sons or daughters seem just to have made poor life decisions, and our clients primarily are concerned for the grandchildren. Establishing a fund for their education is sometimes the perfect incentive for visiting an estate lawyer. It also can lead to a discussion of intervivos gifting strategies.

Charities: Overall, I have been disappointed at the level of interest in charitable giving among well-to-do people. Some of our clients are exemplary in this respect, but others seem afraid to diminish their nest egg to support religious or other charitable activities, even ones that are important to them. However, by our bringing up the subject and offering an example or two, several clients with no past charitable inclinations have discovered a philanthropic side of themselves. In making a decision to share their prosperity, they have experienced an empowerment and a sense of nobility that is very heartening.

Clara, whose husband passed away at 80 and left her much more than she would ever need, decided to honor him by establishing a partial scholarship for his high school alma mater; she has left an even greater gift in her will to make it a full scholarship. She thanked me for opening her eyes to such a satisfying bequest. (Clara also used her lifetime exclusion to make current gifts to her children, so her charitable activity did not cause any family stress.)

Yours, Mine And Ours

A great many blended families have engaged us in recent years, and other advisors tell me the same. Marriage between two people, each of whom has children from an earlier marriage, presents its own set of emotional complexities. Just building trust between spouses can take a major effort; throw in a few kids feeling abandoned or displaced, and it's easy to understand why estate planning seldom gets on the new family's priority list. And yet, because there are so many people's feelings and financial well-being at risk, it is even more vital that you find a way to get this task on their radar screen.

Here's just one example of how much you can help. Ron and Sandra Larken, both 42, had been married for five years. Their investment accounts total something like $5 million, and most of that came from Sandra's parents. The Larkens each have two high-school-age daughters from earlier unions. That makes four teenage girls under one roof, a Herculean challenge even for an original set of parents. No wonder Ron and Sandra had not prepared new wills; they had no idea what they wanted their documents to say. Just trying to talk about it was stressful.

In our second meeting, we got around to estate planning. I asked my icebreaker questions, and before you could say Orphans Court, we were up to our elbows in what-ifs, possibilities and a few indications of what concerned each person. Sandra was very clear that the bulk of her parents' estate eventually should go to her daughters. Ron was just great about this point, but he expected that Sandra's will not leave him high and dry if he tragically should become a single parent. "Of course, I would want that, too," said his wife. "But should my will leave everything to Ron and trust that he will leave most of the money to my girls on his passing?"

I agreed that, while Ron could certainly be trusted to do that, it could easily give rise to intra-family suspicions, and her girls would have to wait for Ron to die before they received any of their mother's bequest. I observed that this would not be a great relationship builder; this broke the tension a little and we kidded for a few minutes. Then we tossed around the notion of leaving outright bequests to Sandra's daughters and funding a trust that Ron could use to finish raising the children and to care for himself, the remainder to go to Sandra's heirs after he died. I could see from the body language that every idea we floated made somebody squirm.

Since this was a particularly sensitive set of circumstances, I asked them both if they thought it would be helpful for me to meet separately one day with Sandra. Ron, who is a gentle person, said he thought that was a good idea. I think he was glad to move off the subject, but I also took his agreement as a high compliment.

Later, when I met with Sandra, I proposed that she leave a dollar amount to Ron as an outright bequest instead of a trust; enough that he could be well-provided for in the event of her early demise. After generous gifts to his daughters, the rest would go to her daughters in stages until they were 35. Ron would be co-trustee for them with a trust company. Sandra liked the idea. A week later, the three of us got together, and both of my clients were completely thrilled that their needs were being met.

Four weeks later, after two meetings with an estate planning attorney to work through the drafting details, we had excellent documents, and everybody was peaceful. Not because I was an expert on estate tax law, but because I listened to both clients' concerns and kept offering alternatives until we came up with a concept that we could all buy into.

By relying on the help of estate planning specialists, you may discover that encouraging your clients to talk about their legacy may be your best opportunity to serve them and to be appreciated.

J. Michael Martin, JD, CFP, is president of Financial Advantage in Columbia, Md.