How Financial Advisors Can Help With Estate Planning


Estate planning often sits at the bottom of people’s to-do lists, but it plays a crucial role in securing your family’s financial future. It ensures your loved ones are provided for after you pass away, and outlines how your belongings are distributed.

While an estate planning lawyer is vital for drafting certain legal documents, a financial advisor brings a broader perspective to the table. They analyze your income sources, investment portfolio, retirement accounts and insurance coverage, providing financial context that might not be apparent to a lawyer.

From picking the right long-term care insurance to maximizing charitable contributions, a skilled financial advisor can make all the difference during the estate planning process.

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What is estate planning?

Estate planning involves organizing and managing your assets to ensure they’re distributed according to your wishes after you pass away. Assets can include anything from your home and investments to your car and collectibles.

Estate planning may also involve planning for the care of your minor children or a disabled family member.

Without a proper plan in place, the legal system decides how your assets are distributed, which can cause problems for your beneficiaries. This process, known as dying intestate, can lead to a time-consuming and costly ordeal in probate court.

Consulting with an estate planning advisor could help spare your family from this hardship. An advisor can help tailor your plan to include tax efficiency, charitable giving, life insurance and trust structures that meet your needs.

How can financial advisors help with estate planning?

Financial advisors bring a wealth of knowledge and experience on topics like investment planning and insurance. Here are five key ways they can help you with the estate planning process.

1.Gathering the necessary documents

A financial advisor can help you draft an estate planning checklist and organize all your documents, including:

A legal document that outlines your wishes regarding the distribution of your assets.

Power of attorney
Designates someone to make financial and/or medical decisions on your behalf if you become unable to do so.

Living will
Informs doctors and medical professionals about how you want to be treated if you cannot make your own decisions about emergency treatment.

While an advisor can help you gather these documents, they can’t provide legal advice. For help with drafting and finalizing a will, consult a lawyer.

2. Dividing your assets

Dividing assets can be one of the most emotional aspects of estate planning.

If you have a diverse portfolio of real estate, investments and cash holdings, a financial advisor can recommend the most equitable way to distribute these assets without triggering major tax implications for your beneficiaries. They can also use their expertise to help estimate the value of your estate.

3. Carrying out your financial plans

A trust is a legal structure that protects assets, provides for beneficiaries and specifies under what conditions assets can be distributed.

By working with an estate attorney, a financial advisor can help establish a family trust or other plans that ensure your wishes are carried out after you’re gone.

Consider this scenario: You want to establish a trust for your children, and you also want to maximize the returns on your investments inside the trust. An estate planning attorney will draft the trust documents, ensuring they comply with state laws. Then your financial planner steps in to offer advice on which investments and assets to place in the trust. This helps you benefit from professional tax planning strategies and potentially higher returns over time.

A financial planner can also ensure beneficiary designations are properly set up on retirement accounts and life insurance policies. Moreover, they can help you open joint bank accounts or set up payable-on-death forms at your financial institution so those accounts avoid probate.

4. Choosing coverage plans

Life insurance and long-term care coverage are often folded into the estate planning process because they provide financial support to a policyowner’s family. But navigating the complex landscape of policy types, riders and coverage amounts can be daunting on your own.

An estate planning advisor can help you compare options and quotes from different providers so you secure the best coverage for your budget.

They’ll also assess how much life insurance you need and offer guidance on how to submit your application to the insurance company.

5. Maximizing charitable donations

If philanthropy is close to your heart, a financial advisor can provide valuable guidance on making the most of your charitable giving.

They can help structure contributions in a way that maximizes tax benefits. For example, a financial advisor may recommend utilizing a donor-advised fund, which lets you make contributions, receive an immediate tax deduction and then distribute funds to chosen charities over time. This not only streamlines the giving process but also offers significant tax advantages.

Tips for choosing a financial advisor for estate planning

You want to find a financial advisor with experience in the industry who can work alongside your estate planning attorney. A good advisor will identify risks in your financial plan, help you prioritize action items and explain any potential costs involved in the estate planning process.

As you begin your search for a financial advisor, keep in mind:

  • Credentials and experience: Look for advisors with relevant certifications, like the certified financial planner (CFP) designation. Make sure to ask about their experience in estate planning.
  • Client referrals: Seek out reviews and testimonials from past clients. Referrals from friends and family can provide valuable insight too, as well as input from your tax advisor or attorney.
  • Transparent fee structure: Understand how the advisor is compensated. Look for a fee-only fiduciary, who are obligated to act in your best interest.
  • Good communication: Estate planning can get complicated, so look for an advisor with good communication skills.
  • Ask questions: Take advantage of any free consultations by interviewing potential advisors. If it doesn’t feel like a good fit, or you’re not getting the answers you need, move on to the next candidate.

Bottom line

Engaging a financial advisor in your estate planning journey is a smart move. They bring valuable expertise to the table, ensuring your assets are managed and distributed the way you want.


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