When clients approach financial advisors, they typically have two things on their mind. The first is saving money and the second is investing money, watching it grow along the way. It’s hard not to be excited by this. Who doesn’t want to watch their money multiply?
As financial advisors, however, it’s not just about giving the client what they think they want. It’s also about guiding them and helping them to make smart financial decisions. That is the true role of an advisor.
Estate planning is often forgotten in the long list of items on someone’s financial planning agendas. According to a recent Princeton Research Survey Associates poll, almost 60% of adults do not have a basic will or estate plan. It’s something most people don’t want to think about.
They say, “I’ll get to it later.” But “I’ll get to it later” doesn’t help families confronted with an unexpected loss of a loved one. If your clients’ wishes aren’t on paper, it will take their families a lot longer to access any money they’ve left behind for them. This is a big deal because the average funeral cost in America is approximately $7,000.
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And, often, if people don’t have their wishes clearly laid out on paper, it leads to hurtful disputes within their families.
The best thing to do is to plan an estate. As a financial advisor, you’ll be doing two different types of planning.
Basic Estate Planning
The first kind of plan is the most basic and doesn’t involve a call to their attorney. A lot of planning can be done by reviewing their account titling and beneficiary designations.
Another way to maintain ownership of an account, without making it a joint account, is adding a Transfer on Death designation, otherwise known as TOD. TOD essentially adds a beneficiary to a non-retirement account. Having joint titling or a TOD designation prevents clients’ families from having to go through probate court.