Baby steps to get your clients to start estate planning, Pt. 2

By Ryan Parker

Bankers Annuity Brokerage


In part two, we'll explore several more actions you can assign to your clients that will help them reach their estate planning goals painlessly and easily.

In part one of this article series, we addressed why many of your clients may be reluctant to face up to the challenge of creating the all-important estate plan, as well as how you can help break the process down into far more palatable baby steps for your clients to take.

In part two, we'll explore several more actions you can assign to your clients that will help them reach their estate planning goals painlessly and easily.

By this point in time, you and your clients have gone a long way down the path toward a solid estate plan, yet it was all accomplished in a series of small, easy-to-manage steps. The key now is maintaining that momentum, preventing procrastination and keeping them focused on the reward at the end of the path: peace of mind.

Do a full review of every other financial account or policy

In the spirit of taking stock of assets and debts, there is one more vital task your clients must see to in order to ensure their estate shapes up just as they'd hoped and that their true final desires and instructions will be carried out smoothly and peacefully. This is where that list of intangible assets you asked them to create earlier in the process comes in handy, as this next step is to review the beneficiaries of each and every policy and account they own to ensure they're up to date and accurate. This is especially important for retirement accounts like 401(k)s and IRAs, as these funds will pass via contract to whomever your clients have designated as beneficiaries upon their deaths — and this supersedes any designations later made in a will or trust.

What's more, it is not uncommon for these types of policies and accounts to be decades old, and oftentimes, so too are the designated beneficiaries. This is why it's important for your clients to contact the customer service department for each of the retirement policies or accounts they own and ask for a listing of current beneficiaries. Remind them that taking the time to review their beneficiaries now can prevent ugly battles in the future, after they're gone and have no more control.

This is also a good time for you to see if you could simplify or improve your clients' financial lives by combining some of these accounts or transferring funds into more productive or appropriate products.

Remind your clients that several of their accounts, from some of their individual brokerage accounts to more traditional products like CDs and even good-old-fashioned bank savings accounts, may offer a “transfer-on-death” feature. Known as a TOD, this addition allows your clients to name the beneficiaries and allocations of these accounts up front and as they see fit. In most cases, your clients should be able simply to telephone their banking institution and inquire about TODs, or you might offer to help research the availability of this feature on their behalf.
Develop a current will

A well-planned and up-to-date will is the cornerstone of any good estate plan, but as you're likely well aware, the fact that just about every adult — no matter how young — should have a will does not translate to fact in reality. It should therefore go without saying that if clients come to you without a will, you should help them to create one. If they do have a will, ask to review it and help them to update or change it as necessary. A good advisor stays abreast of their clients' life-changing events, but you can't know everything about everyone, so good advisors also review their clients' wills annually or no less than once every two years. When drawing up or simply reviewing a will, take the opportunity to ensure your clients have assigned guardians for their children and pets, and inquire about completing a living will.

Choose an appropriate estate administrator

While you cannot select an administrator for your clients, you can give them some good advice when it comes to making this crucial selection. Since this individual will bear the responsibility of adhering to the rules, provisions and wishes set forth in your clients' wills, the person your clients choose to serve in this position must not only have a history of demonstrably responsible and ethical behavior, but also have the mental fortitude to make difficult decisions during a difficult time.

Encourage your clients to think hard about this decision before coming to any conclusions. While many people might be quick to name their spouse or closest friend as estate administrator, caution them to consider how well such a person might be able to handle the demanding administration of the estate while simultaneously grieving their loss.

Once an estate administrator is chosen, be sure your clients provide him or her with copies of all salient documentation, including everything from the will to their list of assets.

While this is by no means an exhaustive list of the many steps to forging a strong and stable estate plan, it does put your clients leagues ahead of where they started. By helping your clients to take these steps, you've given them an even stronger picture of their overall financial condition, as well as the peace of mind that when they pass away, their survivors won't suffer the agony of probate or infighting.