3 Tips for Smoother Estate Planning with Clients

Mar 16, 2023 | Guides

Estate planning is always a tough topic of conversation for financial advisors and their clients.

“Even in the tightest-knit families, transfers can get a bit messy,” explains Kevin Andrews, owner of Idaho based wealth management practice Eagle Financial Group in an interview with CircleBlack. “It’s common for siblings to fight over their parents’ assets.”

Unfortunately, it’s the rule rather than the exception for advisors to be navigating tough conversations with their clients. After all, American society is going through a major wealth transfer of assets from older to younger generations.

Mortality is an inevitable part of the human experience, but discussions around the topic can be extremely emotional. Here’s how financial advisors can ease discussions for investors and their families.

1. Prevent surprises: Shepherd families through a plan

“It’s crucial that everyone knows what’s going on, so everyone can be on the same page,” explains Andrews.

One of Andrews’ approaches is to assemble teams that include trust attorneys and other financial professionals to help his clients feel secure in their plans.

This means taking a data-driven approach, so everyone involved can have focused and rational discussions. One solution that Andrews employs in his practice is to use software to calculate long-term projections, planning around tough questions, and drilling down into key details.

Leave the numbers to software algorithms rather than intense interpersonal discussion.

2. Don’t boil the ocean: Start small, instead

The topic of estate planning can be a lot for people to process.

“Estate planning, like budgeting, can seem overwhelming to clients at first,” writes David Jones for Financial Advisor Magazine. “By starting with small yet meaningful steps, advisors can help motivate clients to tackle bigger questions.”

Jones suggests the following recommendations:

  • Ask your clients if they’ve set up a legacy contact for their smartphone
  • Encourage clients to review and name beneficiaries for any accounts
  • Help clients review and name beneficiaries for any accounts or life insurance policies that require updating 

Instead of giving clients a series of tasks, ask questions. You can slowly move to more complex requests, according to Jones.

3. Be empathetic: Don’t forget that people are whole human beings

The topic of estate planning can understandably feel a bit awkward. Keep in mind that people may not feel comfortable coming to terms with their mortality. It’s important to keep conversations lighthearted in other areas.

Remind your clients that estate planning is only part of an overall wealth management equation. What’s most important is to enjoy life right now.

Don’t forget to stay connected to your clients’ values, interests, and personal milestones. While mortality is inevitable, life should not be about death.

Recognize the importance of proactive guidance

As a financial advisor, your ability to bring up a tough topic will bridge a critical gap in many peoples’ lives. Keep in mind, according to a study from D.A. Davidson, only one-third of Americans have an estate plan — that’s a problem, especially for family members who remain left behind.

Your guidance can help shift this troubling dynamic. It starts with one conversation.

About CircleBlack

CircleBlack is an all-in-one technology platform for relationship-focused financial advisors. To learn how our software can help you build, manage, and grow your wealth management practice, get in touch to request a demo.

This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal, or tax advice.

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