How Financial Advisors Can Help With Estate Planning (2024)

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When you think about the role of a financial advisor, you likely think about how they can help you invest or plan for retirement. But there’s another vital task a financial advisor can help with: estate planning.

According to a 2023 study released by, only 34% of Americans have an estate plan or will. Without proper planning, your estate will be at the mercy of our legal system, which may distribute assets differently than you would have liked and much slower than your loved ones might need.

Working with a professional can help you ensure that your loved ones only have to deal with grief after your passing, not legal headaches.


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What Is Estate Planning?

It’s no surprise that so many people go without an estate plan or will; no one wants to think about their own mortality. But estate planning is a critical part of managing your finances.

Estate planning is the process of organizing your assets and deciding how you want your property, savings and other valuables to be distributed upon your death. Beyond the transfer of property, estate planning may take into account other personal matters, such as tax planning, charitable giving, life insurance and trusts for family members.

Estate planning can take several forms, but the most common document used is a will. Your estate plan may include the input of several professionals, including insurance agents, lawyers, accountants and financial advisors.

Why is estate planning so important? It’s the only way to ensure your wishes are carried out. If you don’t have a will or other estate planning document in place, you have died “intestate”, and your assets will be distributed according to your state’s laws regarding next of kin, so your property may not be divided as you intended.

The probate process for someone that has died intestate can be more complex. The average estate completes the probate process in six to nine months, but in some cases, it can last for a much longer period. Probate can also be expensive; the typical cost is about $1,500, but can be significantly more depending on the state, size of the estate and contentiousness of the parties involved.

5 Ways a Financial Advisor Can Help With Estate Planning

Financial advisors can be an invaluable resource during the estate planning process. Their expertise can help you plan ahead, protect your estate and provide for your loved ones. A financial advisor can be beneficial in five critical ways:

1. You Want Your Estate To Be Divided Among Specific Relatives and Friends

As you start the estate planning process, a knowledgeable financial advisor can help you create a comprehensive plan that ensures the distribution of your estate to selected individuals. The advisor will work with you to determine how your money, property and even sentimental items are handled.

A financial advisor’s expertise can be especially helpful as you take into consideration the needs of different family members. For example, an advisor can estimate how much a niece may need to pay for college or how much your grandchildren will need to pay off their mortgage.

If you think your loved ones will need help after your passing, you can also make arrangements for the financial advisor to provide continued guidance after your death to the beneficiaries of your will.

2. You Want To Ensure Your Family Is Financially Cared For

There is one universal truth that applies to everyone, regardless of income: life is unpredictable. Even if you are young and healthy, meeting with a financial advisor is a smart idea. Your advisor can ensure that you have the necessary insurance needed to protect your loved ones in case of a tragedy.

For example, a financial advisor can assist you with choosing the best life insurance policy for your needs and determine how much of a death benefit your family will need. They can also help you choose which insurance riders to add to your policy, such as long-term care coverage or accelerated death benefits.

3. You Have Specific Intentions for How Money Should Be Used

If you pass away and leave money to a particular loved one, you may have specific intentions for how the recipient should use that money. For example, you may leave a sum of cash to care for a disabled relative’s medical expenses, cover the cost of tuition for a child or even for your pet’s care after your death.

A financial advisor can help ensure your intentions are carried out. By working with an estate planning lawyer, they can create a trust for the funds so the money is used only for its intended purposes.

4. You Want To Designate A Person to Make Medical Decisions On Your Behalf

A financial advisor will ensure you have all of the necessary documents in place to handle end-of-life issues or medical emergencies. Common documents include:

  • A living will. This document allows you to specify what medical treatments are permissible if you are unable to communicate your feelings.
  • Durable power of attorney. The durable power of attorney designates an individual or group that can make healthcare decisions on your behalf if you are incapacitated.
  • Letter of final wishes. Usually included along with a will, the letter of final wishes explains to your loved ones how you want your burial to be handled. For example, you may outline if you’d prefer a religious service or would like to be cremated. If you want your family to use a certain funeral parlor—or if you have pre-paid for your burial—you can include that information in this letter.

5. You Want To Leave a Bequest to a Charitable Organization

If you’d like to leave a portion of your estate to a charitable organization, your financial advisor can help structure the bequest to optimize the donation. They can provide advice on what type of donation will best benefit the organization.

For example, you can leave a certain amount of cash or a percentage of your estate to the charity, or you can create a charitable gift annuity or donor advised fund that pays out a specified amount every year.

Estate Planning Is an Essential Part of Financial Planning

Confronting your own mortality can be daunting, but estate planning is one of the most loving things you can do for your family and friends. It’s a critical part of financial planning, and it ensures that your loved ones are provided for and your estate is divided according to your wishes.

Working with a financial advisor can help you complete the process faster while making sure your plan is comprehensive and tailored to your family’s needs.

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I'm an enthusiast and expert in financial planning, with a particular focus on estate planning. My depth of knowledge in this area stems from years of hands-on experience, continuous education, and a track record of successfully assisting individuals and families in organizing their assets and ensuring their wishes are carried out seamlessly.

Now, let's delve into the concepts mentioned in the article:

  1. Estate Planning Overview:

    • Estate planning involves organizing assets and deciding how they should be distributed upon one's death.
    • Beyond property transfer, it encompasses tax planning, charitable giving, life insurance, and trusts for family members.
  2. Importance of Estate Planning:

    • Without a will or estate plan, dying intestate can lead to the state distributing assets according to its laws, potentially conflicting with your intentions.
    • The probate process for intestate cases can be complex, time-consuming, and expensive.
  3. Financial Advisor's Role in Estate Planning:

    • Financial advisors play a crucial role in the estate planning process.
    • They help create comprehensive plans, ensuring the distribution of the estate aligns with the individual's wishes.
  4. Ways a Financial Advisor Can Help with Estate Planning:

    • Distribution Among Specific Relatives and Friends:
      • Advisors assist in creating plans that consider the needs of various family members, estimating financial requirements for education, mortgages, etc.
    • Ensuring Family's Financial Well-being:
      • Advisors help select life insurance policies and coverage to protect loved ones in unforeseen circ*mstances.
    • Specific Intentions for Money Usage:
      • Advisors work with estate planning lawyers to create trusts, ensuring money is used as per the individual's intentions.
    • Designating a Decision-Maker for Medical Issues:
      • Advisors ensure necessary documents like living wills and durable powers of attorney are in place for medical decision-making.
    • Leaving a Bequest to a Charitable Organization:
      • Advisors assist in structuring bequests optimally, providing advice on various types of donations.
  5. Essential Documents in Estate Planning:

    • Living Will:
      • Specifies permissible medical treatments if unable to communicate.
    • Durable Power of Attorney:
      • Designates individuals to make healthcare decisions if incapacitated.
    • Letter of Final Wishes:
      • Accompanies a will, explaining burial preferences and related details.
  6. Conclusion:

    • Estate planning is an integral part of financial planning, ensuring loved ones are provided for and assets are distributed as intended.
    • Working with a financial advisor expedites the process, creating a comprehensive plan tailored to the family's needs.

In summary, estate planning, though challenging to confront, is a crucial aspect of financial planning, and seeking assistance from a qualified financial advisor can significantly ease the process while ensuring the best outcomes for your loved ones.

How Financial Advisors Can Help With Estate Planning (2024)
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