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Holly Geerdes

Financial Planning > Trusts and Estates > Estate Planning

Do All of Your Clients Have an Estate Plan? They Probably Should.

By John Manganaro

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Estate planning is best understood as a process and not a one-time event, and while wills and trusts are the most commonly used tools, there are many more fundamental documents that a skilled estate planning attorney can help put in place that will result in superior asset protection.

But financial advisors and their clients must also be cautious about the estate planning process, as not all attorneys who offer support services in this area have the same amount of experience or knowledge, and in some important ways, poorly executed estate planning can actually be inferior to no planning at all.

This is according to attorney Holly Geerdes, who has sought over the past two decades to establish herself as one of the nation’s premier trial and asset protection attorneys in the United States. As the founding attorney at the Estate Law Center, Geerdes has extensive management and leadership experience in coordinating statewide projects for professional legal development related to improving the caliber of attorneys, and she’s trained everyone from novice attorneys to veteran judges on legal practice and the law.

In a recent interview with ThinkAdvisor, summarized in Q&A format below, Geerdes explained some of the fundamentals of successful estate planning, beginning with the fact that estate planning is not just a tool for the wealthy or those with complex financials.

It’s a series of questions many individuals and couples have, Geerdes says: “Who needs an estate plan? And when do we need to start estate planning?”

“The answer is, at every stage of adult life,” Geerdes suggests. “And, estate planning is not just something wealthy or older people undertake. It is important for the middle class and everyone else who has concerns about how their wealth will be treated after their death.”

The newly legal adult about to leave for college, the single mother of two struggling to pay the rent, the middle-aged married couple, the retiree downsizing, the 80-year-old without close family ties and everyone in between all require an estate plan, Geerdes says. Given the potential complexity, starting estate planning as soon as possible will yield the best results.

According to Geerdes, some 40% of baby boomers, 64% of Gen Xers and 78% of millennials do not have a will, and the process becomes more difficult the longer one waits to engage in such planning. Ultimately, Geerdes says, the financial planning professionals should take pains to educate themselves and their clients about the importance of estate planning and asset protection.

THINKADVISOR: When it comes to estate planning and related issues, what are the biggest trends you are seeing so far in 2023?  

HOLLY GEERDES: That’s an interesting question. We specialize in setting up wills and trusts, but we also do higher-level asset protection and estate tax planning work. In that context, one big trend we are seeing today is that pre-retirees and retirees are very concerned about addressing long-term care costs.

They are concerned for good reason, I would say. As you know, if a person becomes disabled later in life, physically or mentally, and they require some form of constant long-term care, that fact can take a perfectly sound retirement income strategy and just blow it up. This is especially true when the person lacks long-term care insurance, as so many people do.

Financial planner professionals are likely aware of this issue, but like their clients, they often assume that planning for and addressing this risk is something that should be done when a person is, say, in their 60s or 70s. But to successfully plan for this risk, you have to start early, because it just gets so much more expensive to buy insurance and to put other controls in place the longer you wait.

Yes, long-term care is expensive, but that is especially true when we are talking about older people trying to source such coverage. Younger people can actually find some attractive rates, and there are some really interesting emerging products that link a long-term care rider to tax-advantaged life insurance.

Another clear trend is people rushing to get estate planning in place under the current  favorable tax framework, which is set to expire in 2026. They want their planning to be grandfathered in with the current rates, because the broad expectation is that the estate taxes will go up again in the near future.

So, does that mean more young people should be proactively shopping for long-term care insurance?

Yes, I think so. Many more young people should be looking at these policies and considering the role they can play in their long-term plan. As I mentioned, considering life insurance policies with a long-term care rider is a key part of the asset protection process I undertake for my clients.

From experience, I can tell you that many people are comfortable with the idea of having life insurance be a part of their retirement and legacy strategy, so why not link the long-term care coverage in there while you are younger and can afford an attractive rate? If something happens and you do become disabled, this can be a powerful way to bring forward the value of the death benefit.

What other common issues are you speaking about with your clients?

Speaking generally, our clients are coming in to protect themselves from the need to go through the probate process, and to try to reduce estate taxes. Many of them come to us because they are worried about what could happen to their family’s wealth if their children go through a contentious divorce, or they are worried that some other type of lawsuit or issue could wipe out an inheritance.

As a first step, most of our clients choose to at least establish a basic revocable trust, and the purpose of doing this is to address the risk of probate and to keep their decisions private. However, as we counsel our clients, most revocable trusts can’t provide as much protection from lawsuits as many people think, especially if the attorney you work with has less experience.

For the clients who truly are concerned about the potential for an inheritance to be wiped out by life events — divorces or lawsuits — that’s where more advanced types of revocable trusts can come in. It is crucially important that such trusts be very carefully structured and that the language is very strategic and nuanced, especially with respect to the divorce issue.

Many clients’ primary goal is to see their assets remain in the bloodline, going to the children and grandchildren. This is a key goal, but whether it’s achieved or not depends on the skill of the attorney. Our profession is no different than any other. There are general practitioners that do everything, including wills and trusts. They don’t specialize, but this is a specialist area.

What basic steps go into a successful estate planning process?

We always start by going over the clients’ background information. We dig into the family dynamics, the assets and what their wishes, wants and concerns are regarding their estate. Once we get that idea, we can recommend whether it’s a situation where a will is enough, or if they need a trust or other more advanced forms of asset protection.

The main documents in every estate planning effort are the will, the financial power of attorney, the durable power of attorney and the health care directive documentation. For most of my clients, because they are coming to us knowing our expertise, they also want a trust, and they don’t want to wait till after their death for everything to be hammered out.

It’s interesting, another trend I’ve seen lately is an increase in planning needs that have to do with clients’ adult children having mental health issues, ranging from bipolar disorder and schizophrenia to alcohol and drug abuse disorders. These are cases where setting up the right trusts can be so essential to helping to ensure positive long-term financial outcomes.

When I have meetings with clients, they are very forthcoming with their private matters, because they understand how important the process is.

Do you have a viewpoint on the role of web-based will and trust planning for the masses? Are such services useful?

It’s a mixed picture, from my perspective as a true specialist attorney in this space. These services can be useful, but I worry that people will use some of these services and that they will assume they have far more protection in place than they actually do.

Don’t get me wrong, the mass education aspect is important. That part I appreciate, because they are helping to break down this assumption that only wealthy people need this type of planning. These services can help to show that, whatever you have, it’s worth doing something — especially taking that foundational step of creating a solid will.

The availability of creating an affordable online will is phenomenal, but when it comes to more advanced trusts and asset protection planning, a self-service portal isn’t enough.

Over your two decades of experience, how have discussions about death and mortality evolved?

My experience is that people are steadily growing more comfortable talking about all this stuff, and that makes our job easier and helps us to pursue the best outcomes. I think it comes from the fact that we now have more information out there that allows people to start this planning and to understand what is possible or necessary.

Children who are in the younger generations are also trying to explain to their parents that they want to see their parents get in a good spot. I actually have a lot of younger people coming to my workshops, and often they bring in their parents.

Not only do they get some valuable education, [but] it’s also a way for heirs to show the older generation that they can be responsible stewards of the family’s wealth.

(Pictured: Holly Geerdes)

John Manganaro

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