Many of your clients probably think they have uncomplicated, bland estate planning needs and may not even be talking to you, the financial advisor, about the issue.
But even the simplest estate plan needs the oversight of an advisor or attorney who is attuned to these special requirements, say estate planning lawyers.
Bringing up estate plans can be uncomfortable, but it also can be a way for advisors to differentiate themselves from their competition, says Jennifer Guimond-Quigley, an estate planning attorney based in Chicago.
“If an advisor is talking to a new client or prospect, estate planning should be included in the initial conversation about the services the advisor provides,” says Guimond-Quigley. “If it is an established client, the advisor can use estate planning as a reason to call and check in.”
Jonathan Forster, an estate planning attorney with Weinstock Manion in Los Angeles, concurs. “Every client thinks they have a vanilla estate with simple assets,” Forster says. “The problem is they do not know what they are doing. Legal Zoom just will not do it.”
For instance, if a beneficiary sets up a trust, the trust has to be funded during the beneficiary’s lifetime. If he or she wants to transfer real estate, it actually has to be retitled, he says. “You cannot just say you intend to do it and assume the courts will uphold your wishes without doing the follow up actions.
“This is of particular significance if you have blended families. I had one family that came to me after the fact. They wanted a $7 million estate to go to the children equally. But the trust they set up was not funded ahead of time, so the estate went to the beneficiaries of law rather than to the people they wanted,” Forster says.
“We are brainstorming to try to resolve the situation, but our hands may be tied,” he adds.
“Estate planning can also be complicated if the ancillary documents that are needed, such as a power of attorney, are not executed in conjunction with the estate plan,” Forster adds.
Guimond-Quigley says she has not had a single estate plan that she reviewed that did not have issues that needed correcting.