Protecting Their Assets, Preserving Your Planning: Why Estate Planning Is A Key Tool For Other Advisors

The question of why an individual or a family needs an estate plan is often asked and answered in a typical fashion.  Issues regarding proper distribution, the minimization of taxes, who controls assets and cares for children and how a person’s assets and family are protected from disability and incapacity are always part of my answer when it comes to stressing the importance of estate planning.

An additional concern that I raise is important not only to individuals who I work with to prepare estate plans, but also to the other advisors they work with.  Estate planning provides a prophylactic veil over the work of other advisors to ensure that their work is not compromised.  Many advisors recognize the importance of an estate plan to their specific planning and understand the consequences of their clients’ failure to plan.

Some examples of advisors who benefit from their clients’ establishing estate plans include (but are not limited to):

Financial Planners/Investment Advisors-Financial plans and investment portfolios are created with specific goals in mind and allocations based on the advisor’s strategy to achieve those goals.   Without an estate plan, a portfolio may be divided or distributed to persons that were not intended by the client and the advisors.  In addition, without a plan to delay, reduce or eliminate estate taxes or, alternatively, a way to pay for estate taxes, a portion of a portfolio may have to be liquidated prematurely.

Life Insurance Advisors-Life Insurance can be a great source of liquidity when someone dies since the proceeds of the policy will typically be paid prior to any estate taxes being due.   However, without consideration of a person’s assets, life insurance may create an estate tax where none would be due otherwise.  By working with an estate planning attorney to purchase or assign a life insurance policy to a trust, the full value of the death benefit can pass to the intended beneficiaries estate tax free.

Accountants-With many accountants serving as the “quarterback” for their clients over planning, having an estate plan in place ensures that the problems improper distributions or excess taxation harm their clients.  Some accountants will be responsible for the estate, gift and generation skipping transfer (GST) tax returns of theirs clients as well as fiduciary income tax returns for trusts and estates.  Having an estate plan in place makes the tax preparer’s job easier and less complicated.

Other Attorneys-Attorneys who practice in areas such as family, matrimonial and tax law will often be aware of the trusts and estates related issues that may complicate their work.   Real Estate and Corporate attorneys can also benefit from ensuring that their clients’ work with them is not compromised by estate related issues.   In some litigation matters,  having an estate plan in place can expedite the commencement or settlement of a lawsuit with a sick or deceased client.

In a similar vein, estate planning attorneys rely on our clients’ other advisors to help ensure the best results possible.  Advisors working together for the benefit a client enhances the client’s planning and the advisor’s reputation with the client.

Please contact info@levyestatelaw.com for more information.

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