What All Financial Advisors Should Do (but Don’t): Monitor Your Estate Plan
Does your financial advisor know the details of your estate plan? Do they monitor it to make sure it stays up to date? Have they helped reduce the taxes you and your heirs must pay?
If not, you might be well-served to find yourself another financial advisor. This is our third in a series on “What All Financial Advisors Should Do (but Don’t).” Previously, we explained why your advisor should analyze your Social Security benefits and regularly review your tax returns. Today, we’ll look at your estate plan.
But Don’t You Need an Attorney for Your Estate Plan?
We generally advise that people avoid the DIY route when it comes to inheritances. Your estate planning attorney is essential to documenting your wishes so that you avoid costly legal mistakes.
But your financial advisor should also play a part in your estate plan. They can advise you on potential strategies based on your entire financial situation. They can look for ways to reduce the tax burden for you and your heirs and increase your donations to charity. They can work with your attorney and monitor your estate to help make sure your plan remains accurate.
To give you an idea of what to look for in a financial advisor, here is how we help our clients with their estate plans.
Create and Review Estate Strategies
We work with clients to ensure they have an estate plan in place. Many people don’t since it is a topic they’d rather avoid thinking about. We help make sure clients have a proper will, health care proxy, powers of attorney, and if needed, trust. If a client doesn’t have the proper documentation, we incorporate this step into their overall financial planning process.
Collaborate with Attorneys
We connect with clients’ estate planning attorneys to help ensure documents are drafted in a timely and cost-effective manner. We also provide updated financials to the attorney as necessary.
And if a client doesn’t have an attorney? We have cultivated a network of trusted professionals we can refer them to.
Monitor Estate Plans
If life is about anything, it’s about change. An estate plan can quickly become out of date as a client’s life changes.
We have regular meetings and check-ins with clients to stay updated on the changes that affect any aspect of their financial plan, including their legacy goals. If those goals change, we work with their attorney to make sure new documents get drafted and executed.
It isn’t just life transitions that require estate plan updates. Laws and policies, both nationally and statewide, are constantly changing. We make it our responsibility to stay updated on current and evolving legislation to address updates and opportunities proactively.
Reduce Estate Taxes
We want clients and their heirs to keep as much of their money as possible. We periodically review their strategies for estate tax liabilities that we can help mitigate. And as mentioned above, we monitor legislation for its potential impact on estate taxes.
Update Beneficiary Designations
Any life transition—birth, marriage, divorce, death—can make beneficiary designations outdated. We help establish and monitor designations to ensure that clients’ assets pass to the people they want to receive them. This step also helps reduce the estate subject to probate court and thus helps increase the family’s privacy.
Plan for Charitable Giving
For our charitably inclined clients, we help ensure they achieve their philanthropic goals in the most tax-efficient and time-sensitive ways possible.
We work with each client to determine the gift strategies most appropriate to their financial situation and goals. These may include donor-advised funds (DAFs), private foundations, and qualified charitable distributions.
Summary
We think any financial advisor worth their fees will review and monitor your estate plan, work with your estate planning attorney, and seek to minimize the taxes you and your heirs must pay. If your advisor isn’t doing this, it may be time to seek a new one.
Our Greenwood Village, CO fiduciary financial advisory firm offers a complimentary 15-minute call. We can briefly discuss your financial situation and concerns and share how we may be able to help.
This material was prepared by Kaleido Inc. from information derived from sources believed to be accurate. This information should not be construed as investment, tax or legal advice. This commentary reflects the personal opinions, viewpoints and analyses of the Stordahl Capital Management, Inc. employees providing such comments, and should not be regarded as a description of advisory services provided by Stordahl Capital Management, Inc. or performance returns of any Stordahl Capital Management, Inc. Investments client. The views reflected in the commentary are subject to change at any time without notice. Nothing in this piece constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Accessing websites through links directs you away from our website. Stordahl Capital Management is not responsible for errors or omissions in the material on third party websites and does not necessarily approve of or endorse the information provided. Users who gain access to third party websites may be subject to the copyright and other restrictions on use imposed by those providers and assume responsibility and risk from the use of those websites. Please note that trading instructions through email, fax or voicemail will not be taken. Your identity and timely retrieval of instructions cannot be guaranteed. Stordahl Capital Management, Inc. manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.