Both an estate planning attorney and a financial advisor play a crucial role in building and protecting wealth. But these professionals frequently do not communicate with each other about how to best serve their mutual clients. This shouldn’t be happening.
By having your attorney and advisor collaborate, you can have a more comprehensive and effective strategy to carry out your goals. Here’s how this teamwork can benefit you and how you can foster it.
Harmonizing Your Legal Documents and Financial Portfolio
Your attorney and financial advisor look at your situation in different ways. This is because of the distinct training that each receives.
Your attorney may mainly focus on getting the structures in place properly so that your assets are managed as you desire. After all, if there is no clear direction, assets may go to undesired places.
On the other hand, your financial advisor is likely more focused on funding your plans. And odds are that your retirement is the primary consideration. This will include topics like your investment portfolio, insurance needs, tax liabilities, and the like.
Both of these topics necessarily have to be addressed. But neither professional is likely to have all the necessary skills (or licensure) to handle all parts of your legacy plan. Attorney and advisor should be on the same page when it comes to both structuring and funding your plan.
Let’s say you create a Living Trust. There is a lot of work that goes into the process of setting up a Trust.
Your attorney will advise you to fund the Trust, primarily meaning assigning and retitling assets to the Trust. This means executing a new deed for your house, changing bank account ownership from individual to trust, and assigning business interests to the Trust in a written instrument.
But you can’t forget about Beneficiary Designations. This is largely your financial advisor’s territory: life insurance, retirement accounts, and brokerage investments.
If your advisor doesn’t know that you created a Trust, he or she won’t know to update your beneficiaries so that the Trust works as you intend.
Collaborating helps assure the attorney that the plan is funded, while also assuring the financial advisor that your assets have a clear destination.
Ongoing Monitoring and Adaptation
Life is full of changes. Whether it’s marriage, divorce, birth of a child, or acquiring new assets, life is almost always in motion. Your estate plan and financial strategy need to adapt accordingly.
Regular updates and communication between your attorney and financial advisor ensure that your estate and financial plans remain aligned with your evolving needs.
Odds are you speak more frequently with your financial advisor than your estate planning attorney. But if there is a pre-existing relationship between the two, your advisor will be in a position to update your attorney about these major changes. This will help your attorney know sooner when changes become necessary.
You can also encourage your attorney and advisor to check in regularly to keep an open line of communication. This keeps your plans current, and also reduces the risk of professional liability for each of them. By having at least two sets of eyes on your situation, you can avoid problems before they ever happen.
Carrying Out Your Plan
A huge, and all too common, mistake that many people make is not sharing the details of their plans with anyone. After signing legal documents, they’re hidden away and seem to disappear. Without seeing the contents of your documents, your beneficiaries cannot get the legacy you intend to leave.
By having your attorney and advisor work together, one of the measures you can take is sharing copies of documents. If one of the two professionals retires, dies, or is otherwise not reachable, there are other places where these documents are still accessible.
These professionals have fiduciary duties to protect your information. This adds another layer of peace of mind regarding your plans. All it takes is sharing electronic copies of everything after you sign.
Upon your death, your financial advisor can then quickly take action to alert your family members, executor and/or trustee, and your attorney as well.
Remember, we cannot use a Ouija board to ask what your wishes were. That ship will have already sailed. Your attorney, executor, trustee, and other involved persons have to know where your wishes are laid out and how to access those documents.
When both attorney and financial advisor collaborate, there is a higher likelihood that your beneficiaries will have clarity about what to do.
Take the Initiative with Your Attorney and Financial Advisor
As the saying goes, teamwork makes the dream work.
When you start the estate planning process, tell your financial advisor who you are meeting with. When you do the legal consultation, tell the attorney who your financial advisor is. Then either do an email introduction, or give each of them the other’s contact information so they can connect.
It’s been our experience that financial advisors find this approach refreshing. By connecting, there may also be new opportunities down the road for collaboration on other client matters.
At the end of the day, your legacy plan is in your hands. But it helps to have a helping hand, or two. Get your estate planning attorney and financial advisor together so they can serve you in a more holistic way.
Connell Law, PLLC serves residents of Rutherford County, Tennessee and the surrounding area with estate planning, probate, and small business legal services. Contact us today to request a free consultation.
