Getting Started in Asking Clients about Estate Planning

In today’s financial services market, professionals are often asked to wear multiple hats.  That’s great if the hat you are being asked to wear is one that is familiar, but what if you are being asked to address unfamiliar subjects?  What if you are being asked to explore the estate planning needs of your clients, but your knowledge of estate planning is limited?  Where do you begin?

I encounter many financial advisors who are new to estate planning and find it is helpful to provide them with a few guideposts.  Here are six basic considerations you should be exploring with all your clients:

  1.  Does the client have a will?  If so, is it current?
  2. Does the client have a taxable estate?
    If so, are plans in place to minimize the impact of estate taxes (assuming, and at this time it seems like a safe assumption, that estate taxes are soon to return)?  Useful techniques might include:

    1. Credit Shelter and Marital Trusts
    2. Charitable Gifting and Charitable Trusts
    3. Lifetime Gifting Strategies
    4. Irrevocable Life Insurance Trusts
  3. Are there family members with special needs and is a plan in place to address those needs?
    This might include a family member with a disabling medical condition or one with spendthrift tendencies.
  4. Are there minor children for whom planning might be needed to prevent the possibility of them inheriting large sums before they have the maturity to deal with them?
    For most 18-year-olds, it might be preferable to utilize trusts that will first pay for college and then distribute out assets over time, allowing such heirs to “grow into” their inheritance.
  5. Is there need for consideration of a Living Trust to plan for possible incapacity of the Grantor?
    A Living Trust can allow the Grantor to pre-determine the manner in which the assets are to be applied on their behalf, thereby providing peace of mind for the Grantor and the Grantor’s family.  This is especially useful for elderly clients who wish to maintain their independence or have no family members living nearby.
  6. Are other legal documents in place, such as a durable power of attorney for managing financial affairs, a living will, and a durable power of attorney for health care (health care proxy)?

By spending a few hours coming up to speed on just these six issues, sufficient conversational competence can be gained to begin exploring estate planning needs with almost any client.

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