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Can a Financial Advisor Help With Estate Planning?

Estate planning may conjure images of a lawyer’s office and mountains of paperwork. While your estate planning attorney is an essential professional, your financial advisor can also play a significant role in helping you create an estate plan that truly reflects your resources, goals, values, and legacy. The estate planning process comes with many moving pieces: legal liabilities, tax considerations, and financial elements. This makes it essential that you, your advisor, attorney, and tax professional are all on the same page. Coordination in estate planning is key!

Your Financial planner should play a central role in crafting your estate plan. They can help you understand your financial goals and wishes and empower you to build a plan that lets your legacy shine. Today, we’ll explore five essential ways your financial planner can help you with your estate plan.

Help You Build A Foundation

Let’s face it, the legal system is far from simple. Sometimes it can be difficult to make the association between a legal estate planning document and your specific plan. Your advisor can help you make those valuable connections each step of the way. Since an estate plan is one part of your total wealth strategy, it makes sense to have a comprehensive financial advisor involved to ensure consistency with your financial plan. An estate attorney may not consider your investments, and a life insurance agent may not think about taxes, for example. When you work with a comprehensive financial advisor, such as Covenant Wealth Advisors, the financial and personal impact on other important areas like taxes and insurance are considered with the investments as one integrated picture. Having an advisor in your corner will establish a foundation that you can build the rest of your plan on.

Ensure Beneficiaries and Titles Are Updated

Estate beneficiary designations must be kept current. As major life events unfold (e.g. divorce, remarriage, death of a previous beneficiary), updates to beneficiaries are needed. Your advisor will help identify the accounts that are affected and can help make the appropriate changes to support your plan. Changes to account titles and updated tax identification may be called for as well. It’s vital to keep accounts up to date because any named beneficiaries on the account paperwork will supersede directions provided in your will. Failure to update can lead to undesired outcomes, such as former spouses receiving inheritances when accounts aren’t changed after a divorce. That’s a rough surprise for a grieving spouse! Your advisor can also help ensure that you have considered a plan for your health care long-term. That likely means drawing up a power of attorney for your medical care known as a medical directive. This is a document that authorizes a person to make medical decisions on your behalf should you become incapacitated. It’s also important to establish a power of attorney for your finances. This document gives a person of your choice the ability to make financial decisions on your behalf like paying taxes, debts, investments, and more if you become incapacitated. These powers of attorney have a great deal of responsibility and are essential parts of your estate and retirement plans.

Map Out Avenues for Wealth Transfer

Your advisor can help you understand the various paths available to you for passing assets on to family members, friends, and charities. There are benefits and efficiencies, as well as pitfalls to avoid, as you consider the transfer of various types of assets and accounts to different kinds of beneficiaries.

  • Should you establish a trust (living trust, revocable/irrevocable trust, etc.), and if so, what kind will best suit your needs?
  • What are your options for leaving an IRA to a non-spouse beneficiary? Does it make sense to take a different strategy after the elimination of the “stretch” provision?

  • Are you planning to leave a Roth IRA or other retirement accounts?

  • Where does your life insurance policy fit into your estate plan?

  • Do you have a living will?

  • Have you made a plan for distributing personal property?

  • Do you plan to pass on real estate or other property?

  • Are there important considerations regarding how and when children receive inheritances?

  • Do you have minor children? Who will care for them (guardian) and oversee their financial situation (trustee)

  • Would you like your estate to have a charitable component?

While it will take an attorney to draft the legal documents, we can work through different scenarios to determine the best strategies for wealth transfer so you know what your options are.  Your financial assets should have a clearly documented plan. You’ve worked hard to secure this financial future and it should be considered with diligence and care. We can also ensure that your estate plan is integrated into your complete wealth management strategy, so no stone is left unturned.

Consider Tax Implications

Of course, taxes are an immense part of estate planning. Tax planning is our bread and butter. We work closely with your tax professional to build a tax-efficient estate plan to make sure more of your money goes to loved ones and charities as opposed to the government. Considerations include optimizing estate tax exemptions, gifting during life, using trusts as appropriate and leaving certain assets for heirs while using others for income in retirement. We will consider the total tax impact across your entire finances across multiple years, and not just the immediate impact of isolated choices. We know what to look for as we review your complete financial picture, and make recommendations that will provide you and your heirs with the best possible solution for accomplishing your goals with minimum taxes.

Build a Legacy You Love

The technical aspects of estate planning are important, but they aren’t the only consideration. Think about the legacy you want to leave. Legacy planning and estate planning are intimately linked.

Ask yourself:

  • How can your estate be an extension and reflection of your goals, values, and priorities?
  • How can your legacy live on for generations to come?

  • What does “legacy” mean to you?

Maybe you want to leave money to a cause you care about or leave it to your grandkids so they won’t have to worry about paying for college.  When you develop your estate plan with your legacy goals in mind, you’ll be better able to maximize the impact you make.

Read more related articles here: 


How Does a Financial Advisor Help with Estate Planning?

Also, read one of our previous Blogs at:

Why you should have a Financial Advisor help with your Estate Plan.

Click here to check out our On Demand Video about Estate Planning.

Click here for a short informative video from our own Attorney Bill O’Leary.


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