It's easy to overlook these six estate planning basics

By Skip Rapp

Executor's Resource


A recent study asked those who had served as executor or personal representative for a loved one to describe the estate settlement experience in three words. Most frequently cited? Time consuming (39 percent), stressful (30 percent), and difficult (26 percent).

Think these statements aren't true when there is an estate plan in place? Think again.
Many family member executors struggle after the death of a loved one because they can't easily locate the information and instructions needed to perform their role. In addition, no one bothered to talk to them in advance and prepare them for what would be in store -- both in the level of involvement and the amount of time it takes to settle an estate.

When the basics of estate organization and communication go overlooked, it's pretty easy to predict the result. If you haven't been covering the basics with clients, you're doing both them and your practice a huge disservice. There's a reason why industry reports show that nearly 80 percent of inheritors leave the primary advisor after the inheritance event. Unfortunately, it's not something that a regular birthday or holiday card from you will fix.

Throughout this year, I've been writing about addressing these basics with clients. In this article, I'll offer a summary for those of you doing practice planning for 2010. If the goal of your estate services offering is to retain client assets through wealth transfer by making estate settlement easier and less costly for your clients' families, I encourage you to take these actions:
    1. Ask to review every new client's estate plan and review existing clients' estate plans annually. Which family members are included? Are there any charitable intentions? Based upon the client's situation, does he or she have all the appropriate legal documents (e.g., will, trust, living will, advanced medical directive)? How old are the documents? Are updates needed? This could be a terrific time to introduce the estate planning attorney with whom you work.

    2. Seek first to understand your client's family dynamic. Successful financial advisors go the extra mile to get to know their clients beyond the portfolio. This includes philosophies about saving and spending for both client and spouse along with attitudes and values that were acquired in formative years. In last month's article, I provided instruction to help you address this.

    3. Coordinate your client's estate planning documents with beneficiary designations and title documentation. Annually checking beneficiary designations and how accounts and other assets are titled is an important part of ensuring that your client's wishes will be easily implemented. Failing to do so could set your client up for future problems.

    Example: Client John Sample has a will which states that all assets should be split equally among his three children. If the bulk of John's assets are in a traditional IRA that only names one child as beneficiary and his primary residence is still titled jointly with right of survivorship with his ex-wife, his will, his beneficiary designation, and how his house is titled are out of sync.

    4. Encourage organization of all key information in one safe and accessible location. Where you keep your documents is just as important as having them. One advisor who served as executor for her deceased father recently shared with us that it took her six months to locate a copy of his will.

    Technology has evolved so that it doesn't have to be that way. There are several good online tools that can help a client capture what they should be organizing, where it's located, and who to contact. Not only do these tools provide an easy point of access for the future executor, but the benefits to your client of having all of his important information at his fingertips are enormous.

    5. Talk about personal legacy. Our families will inherit far more from us than our money or personal property. Although we've spent a lifetime instilling values and ethics in our children, as a society, the practice of storytelling has decreased.

    Each of us has a story worth celebrating and preserving. Help your clients tap into theirs and you'll create raving fans out of them and their families.

    6. Loop in the family. Over the next two decades, baby boomer women will experience a double inheritance windfall, first from their aging parents and then from their spouses. This is a powerful demographic that you won't want walking out your door to a competitor. There's no better way to establish a connection with your client's spouse than to demonstrate a willingness to have her feel informed about where everything is and what she'll have to do in the future.
It'll take some smart planning and the right tools to consistently deliver on these basics, but doing so will be measurable and worthwhile. Remember, different strokes for different folks and so too for your client base. The investment of your time in this area will work best when you segment your book of business and determine the best delivery mechanism for the content.

Mix it up by offering in-person meetings with certain clients and group educational opportunities via telephone or Web seminar for others. Don't underestimate the power of your more regular delivery tactics like quarterly client statements or client newsletters. Online organizational tools and educational resources can help you divide and conquer, while creating a high touch feel to clients when mixed with the right amount of your time and involvement.

Adopt these six basics as a standard part of your estate service offering to clients and you'll be leaping ahead of your competitors in referrals, new product and service sales, and retained assets.

*For further information, or to contact this author, please leave a comment and your e-mail address in the forum below.