Well-intentioned estate planning often fails to achieve its original goals due to a lack of proper administration. Estate planning vehicles should not only fit a family's wealth transfer objectives, but also should be continuously monitored to determine if they are achieving their intended goals. Executing an integrated approach to estate planning and wealth management requires the collaborative efforts of a team of multi-disciplinary professionals, preferably in a single firm, to avoid the shortcomings of the traditional approach.

The Traditional Approach
Traditionally, the client would work with an estate planning attorney or law firm, which would develop a basic plan and send the client off with a binder of documents and sometimes a letter of instructions to implement, oversee and maintain the plan. In this model, the implementation and maintenance of the estate plan might sometimes be picked up by one of the client's other advisors-perhaps the tax accountant or money manager, both of whom tend to have more frequent contact with the client.  In many cases, implementation and maintenance are neglected. 

If some other member of the client's non-integrated group of advisors suggests something new, such as a life insurance trust, a qualified personal residence trust, a grantor retained annuity trust or a family limited partnership, the lawyer's services might again be engaged. The client might complete another project with the estate planning attorney, but rarely is a fully integrated plan undertaken.

The result is incomplete implementation. Measurement of success is infrequent if it's done at all, and large time gaps pass between checkups.

In the traditional approach, the client must take the initiative to assemble and oversee the team of professionals. Pitfalls to achieving success are the client's reluctance to undertake the lead role, procrastination and the usual anxiety about the high cost of assembling numerous professionals, all billing by the hour.

The various advisors may perceive themselves as being in competition with one another for "top dog" status. Egos prevent effective delegation and teamwork, and there can be competition for limited fee income among the advisors.

Problems can arise from:
A failure to follow recommended procedures;
A failure to maintain proper books and records, such as for family limited partnership entities;
A failure to make timely payments or distributions from estate planning vehicles such as GRATs or CRTs; and
A failure to prepare and file necessary gift tax returns and income tax returns for estate planning structures.

The Integrated Approach
When a client uses a multifamily office, the client team should carry out the client's estate planning and wealth management objectives in an integrated fashion. The MFO should typically have a multi-disciplinary team of professionals covering tax, accounting, investment advisory, estate planning, philanthropy and risk management issues. An estate planning review should be one of the first projects.  The review should provide a baseline and serve as a refresher for the client of what, if anything, has been accomplished to date. The initial review can also serve as a springboard for recommended improvements.

Following this approach recognizes that the family's estate planning is not a "one-off" endeavor. Rather, it is a process of regular reviews, refined over time. Frequent communication between the multifamily office team and the client allows for continuous measurement of the success or failure of the plan and allows for mid-course corrections to achieve estate planning goals.
Let's explore some examples.

Family Limited Partnerships
Family limited partnerships (FLPs) are a common estate planning tool used to transfer non-marketable limited partnership interests to junior family members or trusts for their benefit.  The valuation discounts, coupled with the control over the FLP assets retained by the senior generation, make FLPs an attractive vehicle for wealth transfers.

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