Skip to Main Content

Six Things Every Financial Planner Should Know About Estate Planning

As an estate planning attorney, I often work directly with my clients’ financial advisors.  In fact, I prefer this type of arrangement, as I find that collaboration almost always results in a better plan.  For this reason, I ask every new estate planning client if they have a financial advisor.  If not, I highly encourage them to meet with one.  Why?  Because the particulars of one’s assets can have serious implications on his or her estate.  This month, I’d like to talk about a few of the stickier aspects of financial planning with respect to an individual’s estate plan:

Death Tax / Inheritance Tax / Federal Estate Tax

Whatever you call it, one thing is universal about this tax: No one wants to pay it!  Fortunately, the 2018 Taxpayer Relief Act has alleviated many folks’ concerns about the estate tax, at least in the short term.  Under the current law, estate tax is not owed unless the value of your estate at the time of death exceeds $11.2 million.  A married couple can double that amount to $22.4 million dollars.  However, this number is currently scheduled to sunset in the year 2025, at which time the exemption amount will revert to $6 million.  While this may not affect all of your clients, there will be some who are affected by the drop.  It may be prudent to begin planning for the change now, as some reduction strategies take several years to enact fully.


Unfunded trusts are costly, and assets not placed within the trust will be treated as ordinary assets.  Unfortunately, every year I come across clients who believe they have planned for everything, only to later learn that they never funded their trust.  In other cases, individuals had indeed funded the trust, only to find out that the account issuer forgot to title the asset in the trust and/or designate a separate beneficiary.


Probate costs can vary widely from one jurisdiction to another.  Here in Texas, probate costs can range from a few thousand dollars upwards to more than $5,000, even when there is no litigation involved.  In other states, probate costs can amount to a percentage of the estate—and that can mean serious money for some clients.  Probate in Texas isn’t too bad, but it can be tricky if your client doesn’t know where to turn.  After all, probate is never good when it’s a surprise.  Many clients think it can be avoided just by having a will.  While having a will definitely makes probate easier, it doesn’t always skirt the issue entirely.  Put simply: make sure your clients know the difference between probate and non-probate assets.


Beneficiary designations are extremely important.  Many clients are surprised to learn that their will doesn’t override beneficiary designations made with a bank or other financial institution, even when specifically referenced.  Review beneficiary designations periodically to ensure that life changes haven’t affected those assignments.  For example, divorce often nullifies any gift to an ex-spouse, but what if you named an ex-brother in law as a trustee and he still makes the most sense?  Do you have to update that designation or can you leave it the way it was?  In Texas, you will need to update the document.  In short: there are many rules that can catch you off guard if your clients are not on top of them.  For this reason, it’s a good idea review designations periodically.  To be safe, it may be prudent to send your clients a new designation form every few years, even if you aren’t planning on changing anything.

Assets in Other States

We mentioned already how probate costs can differ from state to state.  By the same token, it’s important to be aware of the impact of other state laws on one’s assets.  For example, if your client holds real estate in more than one state, they may end up needing probate in both states.  This can be an added time and money burden.  In a situation without a will, this might even create a situation in which the beneficiaries or heirs are different from one state to the next. It’s important for your clients to ensure that the plan they put together here works wherever their assets are located.


Two heads are better than one! Working together, I believe that we can provide greater value to our client relationships.  After all, even the best estate plan will fail if the client and their financial advisor are not on the same page.  For this reason, I often ask my clients for permission to discuss their estate with their financial advisor, certified public accountant, and any other professionals that are significantly involved with their business and financial matters.  Collaboration is the best way to ensure that our clients obtain the highest level of care.

With that in mind, I’d love to answer any other questions you may have about estate planning.  If you’d like to talk, please click here to provide your information and I will follow up with you to schedule an introductory meeting.

Find Out What Every Investor Should Know About Estate Planning