Tax & Estate Planning
8 MIN ARTICLE
Providing clients with wealth strategy guidance, such as tax and estate planning, family governance and charitable planning can be an important driver of practice growth. If you are still figuring out what role you can play in the process, look behind the scenes.
Financial professionals who want to grow their practices or deepen engagement with existing clients are increasingly looking for ways to differentiate service offerings beyond investment management.
Guiding clients through the complex process of considering, developing, executing and monitoring an estate plan can foster stronger client bonds and lead to better client outcomes. It can also build relationships with estate planning attorneys — important sources of potential referrals. Yet the perceived complexity of estate law may keep some advisors from offering these services. If you are not the writer of the plan, you may wonder where you fit in the process.
It turns out there are many ways you can add value to the estate planning process. To help understand each, we’ve looked at estate planning through the analogy of filmmaking. Here's how to work behind the scenes in the estate planning process, and the important roles advisors can play.
Director: Lead the process
In the same way a director acts as the leader of a movie production, overseeing the actors and action, you can “direct” and manage the estate planning process for your clients.
The first step may be starting a conversation with clients and identifying the need for an estate plan, then encouraging them to take the next steps. Clients may need help coordinating the efforts of the various experts and specialists they have or need to engage, including estate planning lawyers, other attorneys, accountants, valuation firms and so on.
As an advisor, you have the expertise and client relationship that is ideal for the role of director, making sure everyone is working from the same unified plan and towards a common goal.
Producer: Provide a big-picture view
In the same way a movie producer is in charge of the big-picture details of a film production, you can use your holistic view of the client’s life to “produce” the estate plan by making sure the professionals involved understand key players and facts.
The more details attorneys have about a client’s life, including a thorough understanding of personal, business and family context, the better the service. Clients don’t always understand which facts are relevant in estate planning discussions, and attorneys may not always ask the right questions. You can fill potential gaps in information, and relay updates on current situations in the client’s life that may require changes to the estate plan or proactive planning.
You can also keep the attorney up to date on changing circumstances. Attorneys don’t typically engage in this type of regular monitoring, but you can help them stay on top of it.
Casting agent: Find the right people
In the same way that a casting agent looks for the right actor to fill a specific movie role, you can help “cast” a client’s team of qualified estate planning attorneys and related financial professionals.
Clients often look to financial advisors for recommendations on other financial professionals to work with. You may already offer a list of names of estate planners you have heard of or collaborated with in the past. Some advisors go even further, getting to know estate planning professionals within their region with the goal of being able to recommend a good fit.
If you are making recommendations to a client, it helps to have a sense of the financial professional’s experience, areas of specialty, pricing and transparency. This leads to fewer surprises when the client is introduced.
Attorneys also appreciate advisors reaching out to gauge interest in a potential referral and give them background. They avoid wasted time with preliminary phone calls and interviews, and you can start to build a strong reputation among clients’ centers of influence.
Critic: Provide perspective and enlightenment
In the same way the critic provides enlightenment, context and commentary around a film, you can provide critical thinking to help the client better understand the planning process and the documents themselves.
Tax and estate planning topics are complicated and dense, and attorneys often take for granted the knowledge and training required to fully understand, for example, a disposition scheme or gifting technique under a living trust.
You can help the client understand the steps involved, the underlying reasons for the attorney’s recommendations or anything else that needs clarifying. Sometimes it helps to have someone who is not a lawyer explain or provide a different way of looking at an estate plan. To keep things very simple, some advisors use infographics or flowcharts to illustrate a complicated plan for clients.
Additionally, you can provide similar context and color for the attorney, clarifying a client’s wishes or family dynamics, or simply providing a third-person perspective in the engagement.
Agent: Keep things moving
In the same way an agent keeps the deals moving in a film project, you can be an “agent” for keeping the estate planning process on track.
Lawyers usually do a great job drafting the documents and getting them to clients for review, but then can lose momentum. Unfortunately, this tends to be where clients lose momentum too. The very size of the package of documents can be intimidating, and clients may reason that they’ve already done most of the work even when there is more to do. The problem is if a draft becomes outdated or needs to be redone for any reason, it can be more expensive to complete.
Advisors can be instrumental in helping the clients complete the process by helping them review the draft documents, overseeing changes and revisions and generally seeing the process to completion. Even something as simple as making the appointment to sign the documents with the attorney and printing and delivering documents to the client can be incredibly helpful in getting the client through the process.
Editor: Tie up loose ends
In the same way the editor will clean up a movie and tie up loose ends, you can act as a final “editor” and make sure the client has everything in place to make the plan a success.
After the plan documents are executed, a lawyer will typically send a closing letter with copies of the plan. If there is a living trust, there will be instructions on how to fund it, along with reminders to update beneficiary designations in accordance with the new estate plan. These are all recommendations until the client acts on them.
While these final cleanup items may sound minor, leaving them unattended can lead to failures in the plan:
- Failure to transfer assets to a living trust can result in probate.
- Failure to update beneficiary designations can lead to delays, unintended bequests or inefficient tax results.
- Failure to transfer stock on company books or change real estate titles can invalidate the goals of the plan.
You and your staff can help clients retitle bank and brokerage accounts, transfer business interests and real estate to a living trust, and update beneficiary designations for retirement accounts and insurance.
As you can see, advisors can play crucial roles in improving the estate planning process for clients. As attorneys get more comfortable working together with shared clients, you may also improve your professional referral sources and connections to centers of influence. For your business, that might as well be a standing ovation.