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.

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.

Retirement accounts are required to have beneficiary designations on file. Even with this requirement, some accounts do slip through the cracks. If an IRA has to go through probate rather than transfer by beneficiary designation, it turns into a lengthy process that leaves no tax planning options. The best plan of action is to keep the beneficiaries on retirement accounts up to date and review them every few years.

The most widely used method investors use when naming beneficiaries is per capita. In simple terms; if one of the beneficiaries passes before the account holder, the assets are split among the remaining beneficiaries. If the intended beneficiary is no longer alive but has children, there are options to have assets go to their grandchildren. This is known as per stripes and the designation follows the branch of the beneficiary.

Which designation you choose to use is dependent on your client’s current situation, and that situation can often change.

In-Depth Estate Planning

The second type of estate planning is more involved. It includes legal documents such as a will, advanced medical directives and even the creation of a trust or trusts.

When does it make sense for clients to start getting estate planning documents together?

“Yesterday,” Emily K. Lashley, an attorney with Whiteford, Taylor & Preston says. “But since that can’t happen, the sooner the better. It is so important to take care of your estate planning before something happens and you are unable to express your wishes. Planning ahead not only gives you peace of mind that your loved ones will be taken care of, but it saves your family the inevitable mess they will encounter if your affairs are not in order.”

If a client’s situation is pretty simple and straightforward with no one depending on their financial resources, you can help them with basic account titling. If they have dependents and a bigger net worth, it’s even more important that you encourage them to get serious about estate planning.


Joseph Conroy, CFP, is a financial advisor at Synergy Financial Group in Towson and the author of “Decades & Decisions: Financial Planning At Any Age.”  Securities offered through LPL Financial, Member FINRA/SIPC.  Investment Advice offered though SFG Wealth Management, a registered investment advisor.