Out of Date and In Need of Immediate Overhaul:
The Story of Many Existing Estate Plans
Content provided by The Advisors Forum; Edited by James W. Garrett, Esq.
Client and prospect meetings need to include a review of the estate plan - does it still work as expected, is the trust funded, have beneficiary designations been completed, did any laws change, have family or finances changed, how old are the documents, and was there a move to a new state? Recognizing when an estate plan needs to be updated will lead to meaningful discussions about what keeps clients and prospects up at night. When you can help alleviate their concerns, you're a hero to your clients.
How Your Business Will Benefit from Spotting Estate Plans That Need Updates
An out-of-date estate plan can cause a multitude of problems. Your business will benefit from identifying out-of-date plans because:
- Your clients will gain peace of mind knowing that you are watching out for them and proactive in seeking solutions.
- If an estate plan doesn't work as expected, assets may likely leave your management.
- You may gain new assets under management as new investments and trusts are created for grandchildren or other beneficiaries.
- You will make new connections and gain new referral sources when you work with your client's attorney, accountant, and banker to bring things up to date.
Ten Reasons for Updating an Estate Plan and a Financial Advisor's Opportunities
Reason # 1 - Change in Marital Status.
Separation, marriage, and divorce all require major changes to an estate plan. Also, be on the lookout for prenuptial planning opportunities if marriage is being considered.
Reason #2 - Change in Financial Status.
Winning the Powerball will certainly change someone's financial status, but so will selling a business, retiring, or receiving an inheritance. Money in motion may require changes to the estate plan, advanced planning, and additional products.
Reason #3 - Birth or Death.
The birth of a child or grandchild often leads to opening UTMA accounts, setting up 529 plans, and creating gifting trusts. The death of a beneficiary may require the addition of new beneficiaries and changes to beneficiary designations; the death of a family member or friend named as a successor trustee or other fiduciary may result in the need for a corporate trustee.