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Seven Ways Your Financial Advisor Can Protect Your Estate Plan  Thumbnail

Seven Ways Your Financial Advisor Can Protect Your Estate Plan

Estate Planning


Estate planning is an oft-overlooked aspect of financial planning.  After all, estate planning is generally viewed as either: 

  • Something for the 1% to worry about because they have more money at stake 

  • Complicated trusts that rich people hire lawyers to write up because they can afford to 

  • Possibly important, but too expensive to do right now 

When viewed in this light, it’s clear why most people don’t view estate planning as very important.  Instead of looking at estate planning as something for the 1%, it might be better to define what estate planning could look like for the 99%.  Let’s imagine estate planning as 

Deciding, in advance, what happens to you, your loved ones, and your assets when you are not able to decide for yourself. 

If that’s the case, then it’s pretty clear that everyone should have an estate plan.  Even if you’re starting your first job out of college, swamped in student loans, having a simple will leaving everything to your parents is a place to start.  And as your life becomes more complex, the importance of estate planning becomes more and more obvious. 

But estate attorneys aren’t the only people who can help you with your estate planning.  In fact, there are many aspects of a proper estate plan that the estate attorney can’t, or won’t, do.  However, if you’ve taken the steps to hire a financial advisor, that advisor is in a perfect position to help you keep your estate plan in place.   

Let’s be clear.  The vast majority of advisors don’t create legal documents (although there are some huge firms with embedded estate planning attorneys who can do so).  But there are some things that your financial advisor can do (and should be doing), to help you keep your estate plan intact.  Here are seven of them. 

#1.  Keeping Beneficiary Designations Up to Date 

Your investment accounts, retirement accounts, and insurance policies have one thing in common:  they all have beneficiary designations.  Beneficiary designations, in simplest terms, tell the financial institution or the insurance company where the money needs to go when you’ve passed away.   

More correctly, everything mentioned above should have beneficiary designations.  While there are several reasons for this, the most important one is that accounts and insurance policies with named beneficiaries bypass the probate process.  In other words, your beneficiaries don’t have to wait for your will to be filed at the local courthouse, which takes time and money.     

But several things might happen along the way: 

  • You set up an account without establishing a beneficiary designation.  If you pass away without having a designation, then the money probably will pass to your estate.  Which is almost never more efficient than having the designation in the first place…and could be costly in the long run. 

  • The designations you established when opening the account or starting the policy are different from where you want the money to go today.  Think of a situation where an ex-spouse gets the insurance money, even if the policyholder has remarried and has a new family.  While this story has happened many times, I’ve never heard of any story that ends in the ex-spouse actually giving the money to the new spouse. 

  • Your beneficiary designations, by mistake or omission, leaves your accounts susceptible to creditors.  Properly establishing beneficiaries could help provide an additional layer of creditor protection.  However, if creditor protection is of importance to you, you should have a detailed conversation with a bankruptcy attorney in your state. 

  • Your designated beneficiaries died before you did, and you don’t have any contingent beneficiaries designated.   If this happens, it’s as if you didn’t have any designated beneficiaries at all. 

Your financial advisor is perfectly positioned to periodically review your investment accounts and insurance policies.  With this insight, he or she can make recommendations as situations in your life change.  Most importantly, your advisor should be able to point out discrepancies between your beneficiary designations and your estate planning documents and help you ensure they are aligned. 

#2.  Providing a Second Look At Your Current Estate Planning Documents 

Most people who take the time to establish their estate planning documents view this as a one-time transaction.  Moreover, they just assume that the estate planning documents reflect what they really want to happen.  Sometimes, that isn’t the case, either because things have changed, or because the documents weren’t drawn up in the intended manner to begin with.   

Many of the estate planning problems that arise from this disconnect could be resolved if someone were to take the time to: 

  • Help read and understand the document 

  • Put it into layman’s language 

  • Have a frank discussion about whether or not this is the intent 

But lawyers charge by the hour, so many people are put off by the thought of paying more for their time.  Also, someone might feel as though this is ‘beneath’ the lawyer, and that it’s their own responsibility to understand the documents they paid for.  Plus, this is private business, so they probably don’t want to discuss it with their friends and neighbors.  What many people need is someone who can be trusted with private matters, and have a conversation that doesn’t involve “lawyer-speak.” 

This is where the financial advisor comes in.  Your financial advisor is already bound by your agreement to keep things private (except for when you give them permission or when legally required).  While your advisor won’t give you legal advice (or shouldn’t), they can help you go over your estate documents and point out situations where your plan might be at risk.  And since your finances touch so many other aspects of your life, they probably have a good idea about what your intentions are.   

If nothing else, having a conversation with your financial advisor would be like having someone holding the mirror in front of you and giving you the opportunity to talk about what changes you’d like to make. 

#3. Pointing Out How Significant Life Changes Can Impact Your Estate Plan 

To carry forward the previous point, your financial advisor is also in tune with significant life events or changes in your life (or should be).  If you trust your financial advisor, there probably isn’t one major life event in which you don’t call them to ask, “What does this do to my finances,” or “Will this affect my retirement plan?”  If you’re not calling them, you should.  And if they don’t get back to you in a timely manner, then fire them and hire someone who will.  That’s their job. 

Assuming that your advisor is doing their job, then they should be able to point out how major changes impact your estate plan.  Some are obvious, like divorce or remarriage.  Some are one and done decisions, like when to take Social Security benefits, or pension decisions upon retirement.  Some are a little more subtle, like moving investment accounts (without updating beneficiary designations).   

A good advisor, who is doing their job, will point these things out to you.  And best of all, it won’t even feel like estate planning—it’s just something that needs to be done, and they’ll help you do it. 

#4.  Helping You Understand The Financial Impact of Changes You May Want to Make 

Most people update their estate planning documents when they want to make a change.  The process is simple: 

  • You go into the lawyer’s office 

  • You tell the lawyer what changes you want to make 

  • They draft a document reflecting the changes you want 

  • You sign the documents, putting them into force 

The common theme here is you.  However, in many of these cases, you might have already made up your mind.  Your lawyer might point out some things, or might have concerns about where you’re headed.  But if your mind is made up, they will probably respect your wishes (or point out instances where it’s not legally possible to do something), and draft the documents according to your wishes. 

There are a couple of problems with this.   

First, unless you have an in-depth relationship with your estate attorney, they don’t really know how these changes will affect your finances.  They know the law, but won’t know how it applies to your particular situation, because they don’t see the whole picture.  If you’re spending a couple of hundred dollars (or a couple of thousand, depending on where you live) to draft “I love you” wills and powers-of-attorney, that’s a transactional relationship, not an in-depth relationship one.   

Second, if anything changes, it’s hard to go back and say, “What now?”  Lawyers charge by the hour, so that’s intimidating to most people.   

Conversely, your financial advisor should be able to help you discuss the changes you want to make, point out any discrepancies (from a financial perspective), and help you understand everything before you actually spend money putting it into writing. 

#5.  Helping You Understand the Impact of Not Making Changes 

This is another situation in which your estate attorney isn’t going to really help you.  First, if you have zero estate planning documents in place, you don’t have an estate attorney.  Second, if you have documents in place, then no one is going to tap you on the shoulder to remind you to update your will when you get a divorce or get remarried.  That’s the nature of transactional relationships—you’re responsible for the changes you don’t make.   

Having a financial advisor means that you’re probably seeing that person at least annually (hopefully more often), even when things are going all right.  Having a good financial advisor means they’re periodically checking your estate plan to make sure everything is in order.  And tapping you on the shoulder when you need to make changes. 

#6.  Helping You and Your Loved Ones Do the Heavy Lifting When Things Change 

When something significant happens, like a sudden family death, it can be paralyzing.  While you’re struck with grief, sorrow, or any number of emotions, it seems as if the entire world has stopped.  But it hasn’t, and there are things that still need to get done.   

It’s times like these when you need someone who can help you: 

  • Prioritize what really needs to get done right away 

  • Figure out what can wait, and schedule it 

  • Do things that don’t need to be done by you 

A good financial advisor has a plan for what steps need to be taken when either you or your spouse 

  • Passes away 

  • Incapacitated 

  • Has a loved one who passes away or becomes incapacitated 

Even if you think you’re on top of your game, your financial advisor might know things about your specific situation that never even occurred to you.  And in households where one spouse does most of the financial work, the financial advisor really proves their value when that spouse passes away or is no longer able to make decisions. 

#7.  Finding an Estate Attorney You Can Trust 

 Perhaps you’ve never worked with an estate attorney before, or the one you hired before has long since retired.  If that’s the case, you might not want to resort to finding your next attorney on Yelp. 

Your financial advisor can help recommend a trustworthy estate attorney.  We work with estate attorneys routinely, and it’s very easy to recommend someone you can trust.  All you have to do is ask.  And if you need the help, you might not even have to ask—your advisor will probably be telling you to get started. 


Estate planning is close to the bottom of the list of things that anyone wants to do.  But it’s important.  And it has to get done.  By you.   

It’s also important to recognize who is involved in your estate planning, besides the people who draft your legal documents.  While they won’t give you legal advice, your financial advisor is probably one of the best people to help ensure that your estate planning actions directly support your estate planning wishes. 

And if you’re ready to take the next step and work with a financial planner, you can learn more about how we work with clients right here.

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