Here’s Why Financial Advisors are Important to an Estate Plan

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When you meet with your estate planning attorney for the first time, you should bring with you:

  • Name and contact information of trusted family or friends
  • A list of your financial and business accounts
  • Your financial advisor

Financial advisor? Yes! If you have a financial advisor you work closely with, consider bringing them to your estate planning meetings. Your financial advisor can provide valuable information as you draft your estate plan.

Estate planning can be overwhelming, especially during your first consultation. Clients often “blank” on questions because there is a lot of new information thrown at them at once. Your financial advisor is an expert on your finances. It is your advisor’s job to know your financial goals and understand how your assets are titled. A good financial advisor knows how important it is to have a good estate plan to meet your long term financial goals. Here are some ways your financial advisor can work with you and your Tennessee estate planning attorney on your estate plans:

Preparing for Your Estate Planning Meeting

The first question I hear from clients when they contact my office about creating an estate plan is, “What do I bring with me to an estate planning meeting?” The easiest answer is that an estate planning attorney will need basic information about your collective assets. This information includes how your assets are titled and who are the beneficiaries on accounts and policies. Financial advisors can help you determine and compile this information as you prepare to meet with your estate planning attorney.

During initial consultations, I ask clients what assets they have as we draft and execute their estate plan. Responses include a range of assets, including:

  • bank accounts
  • retirement accounts
  • trust assets
  • real estate properties
  • personal property

An estate planning attorney’s expertise is in creating a secure estate plan that includes all your assets. Because attorneys do not have automatic access to clients’ personal assets or financial accounts, they draft estate plans based on the information clients provide. If you forget to include a bank account or property in your estate plan, your attorney will not know the account is missing. That missing account can be problematic, especially, for instance, if you have a revocable living trust.

This is where your financial advisor comes into play: Because financial advisors have continual access to your financial portfolio, they are the expert on your total accumulation of assets. Your financial advisor can work with you and your estate planning attorney to ensure that all your assets are included in your estate plan.

Retirement Planning

One of the biggest benefits that a financial planner offers to client is retirement planning. The financial planner is able to set up 401(k)s, IRAs, Roth IRAs, and other such retirement accounts. These accounts have unique laws that control who may inherit certain assets and provide certain tax benefits for beneficiaries. For example, without a waiver from the spouse, the beneficiary of a 401(k) is always the surviving spouse. Additionally, an IRA has special rules for children that inherit their parent’s IRAs. The children can take certain actions that allow those inherited IRA assets to grow tax free over a certain period of time. A well-versed financial advisor should be able to sit down with you and your estate attorney and craft a retirement plan that fits with your overall estate plan.

Updating Beneficiaries

It is imperative that you update your beneficiaries in your estate plan when you experience a significant family or life change that affects who you want to inherit your estate. Because you usually only meet with your attorney on an as-needed basis, he or she does not have consistently updated knowledge of your personal matters.

In contrast, financial advisors meet with their clients on a regular basis to discuss portfolio growth and changes. Because financial advisors meet with their clients frequently, they often have up-to-date knowledge about their clients’ personal lives and families. If there is a change in your family, such as a marriage, birth, adoption, or death, your financial advisor is more likely to hear about it than your estate planning attorney. When your financial advisor is aware of changes in your personal life, they can advise you in updating your beneficiaries with your attorney.

Teamwork Makes the Dream Work!

The most secure estate plans are created through teamwork! Having a team of professionals working together as you create your estate plan makes the process run smoothly and effectively. When you come in to meet with your estate planning attorney, ask your financial advisor to join you as part of your team. If you do not currently have a financial advisor, ask us for a recommendation! We have a network of trusted, talented professionals whom we work with regularly.

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