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    The Gatekeepers: Financial Advisors and CPAs Play Key Role as More Clients Update their Estate Plans

    Posted on: July 25th, 2016
    By Mary Merrell Bailey, Esq. CPA MBA MSTax MSAccounting
    A properly executed durable power of attorney is a critical component of an estate plan.
    “Set it and forget it” may be an effective tagline for late night TV infomercials, but not when it comes to estate planning documents.  As life happens, things change – and so should your estate plan.

    Birth, death, divorce, remarriage, the sale of a business, a change or breakdown in family relationships – any one of these major events could trigger the need to update one’s estate plan. 

    Fortunately, most gatekeepers (e.g. financial advisors, CPAs, insurance professionals, etc.) have their radar up about such matters.  These professional advisors routinely are asking clients questions such as, “How long has it been since you updated your estate planning documents and checked your beneficiary designation forms?”

    Far Reaching Implications

    Many clients do not grasp the far reaching implications of failing to update their estate planning documents.  Some erroneously believe they can depend on a will or living trust document to override outdated beneficiary designations.  Others are not aware of the need to also name secondary beneficiaries.

    We’ve all heard the horror stories.  An adult child appointed years earlier as trustee of the parents’ estate subsequently develops a drug addiction and loots the estate’s assets, leaving little or no inheritance for his siblings. Or, a previous spouse was named beneficiary of an IRA account and, due to an outdated beneficiary form, the children from the current marriage were deprived of their inheritance.   

    Unfortunately, the probate courts see their share of cases where the notion of a smooth transfer of assets to one’s heirs is thwarted by an outdated will, or by incomplete beneficiary forms involving life insurance policies, pensions, annuities, tax qualified accounts and other assets. 

    More Clients Are Updating Estate Plans

    At Your Caring Law Firm, we’ve been pleased to see an increase in the number of clients returning to update estate plans that were drafted years earlier. While many involve clients who are self-motivated to update their estate plans like clockwork every three to five years, others were referred by financial professionals who spotted an issue and made the referral.  And to those advisors with whom we share clients, we say “Thank You!”   

    By nature of the relationship that trusted financial advisors have with their clients, communication occurs more frequently with them than it generally does with the estate attorney who created their legal documents.  The open lines of communication between the advisor and the client during quarterly or semi-annual portfolio review meetings present an opportunity for the advisor to observe any recent changes in the client’s family situation or business affairs. Again, we are grateful to those gatekeepers for keeping their eye on the ball.

    Market Volatility:  An Opportunity for Gatekeepers to Learn More about the Client

    Many financial advisors tell us that baby boomers entering (or preparing to enter) their retirement years are particularly representative of clients where the frequency of communications has increased. During times of stock market volatility and geopolitical issues, such as the recent Brexit vote, worried clients rely on their financial advisors for reassurance that their portfolios are safe and on track.

    The financial advisors with whom we share clients welcome this added face-time and many are using it as an opportunity to demonstrate their “consultative value” by discussing matters other than the status of the client’s retirement portfolio. It’s during these conversations with clients that the advisors are gaining greater insight into any major events occurring in their clients’ lives. Similar to a medical general practitioner who determines that a patient should be referred to a specialist, the financial gatekeepers provide a valuable “checkpoint” to spot shifting life circumstances that require the services of other interdisciplinary professionals (e.g. estate attorney, CPA, insurance advisor, etc.) 

    In short, additional face-time with clients enables financial advisors to identify potential red flags, and to more thoroughly vet and address their clients’ greatest fears as they advance into their retirement years.   
    Fear:  A Powerful Motivator

    Fear – the most powerful of all motivators – is the common thread that both estate attorneys and financial advisors recognize in clients. It’s what brings clients through the door, and it’s what keeps them coming back.

    From a financial advisor’s perspective, a client’s greatest worry normally involves the fear of financial loss. From an estate attorney’s perspective, most clients fear losing their independent lifestyle and becoming a burden on loved ones.

    Aside from wanting to lessen the burden on family members, we have observed a variety of other fears that clients bring to the conference table. For example, one client who had named a family member as guardian for minor children in the initial estate plan later feared he and his wife had made the wrong choice when the relationship soured.  Another client returned to update a living trust out of fear that an adult child – who recently defaulted on a car loan – may not be mature enough to handle a large inheritance all at once.  Several clients who had purchased DIY wills online decided to work with us because they feared the online forms might create an expensive probate nightmare for their loved ones. And the list goes on.

    Achieving Our Shared Clients’ Objectives

    Unlike five or ten years ago, today clients are creating estate plans – and updating existing plans – for fundamentally different reasons. Due to the 2012 changes in the federal exemption, estate tax minimization strategies are no longer top-of-mind as clients cross the threshold of our office.  Rather, most clients today plan for emotional reasons.  And, when they sit down at the conference table, they seem to have a clarity of focus that was not present when they created their initial estate plan. 

    It’s comforting to know that our shared clients are well-served by financial advisors and CPAs who assuage fears and identify shifting life circumstances that might thwart their clients’ estate planning objectives.  And for that we are very grateful!

    Mary Merrell Bailey
    Mary Merrell Bailey Esq.
    CPA* MBA MSTaxation MSAccounting
    Managing Partner

    Faced with helping her own aging parents with their elder legal needs, Merrell realized that there was a need for a legal counsel who truly helps clients feel relieved and non-threatened when navigating the estate planning process. To help fill that need, she attended Barry University School of Law and received a Juris Doctorate degree, graduating valedictorian of her law school...
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    Your Caring Law Firm
    610 S. Maitland Ave.  Maitland, FL 32751
    (407) 622-1900

    Monday through Friday
    8:30 a.m. to 5:00 p.m.