Warn Wealthy Clients Against Flimsy Asset Lists in Estate Plans

April Rosenberry would like to see someone inspect the details when you help clients with trust and estate planning.

“Time and time again, I have seen assets merely listed in an estate or trust document,” Rosenberry said in a recent email interview. “But merely listing an asset is not enough.”

Rosenberry, the director of estate planning at EP Wealth Advisors, said financial advisors, life insurance agents and others need to think hard about “asset funding,” or ensuring that each of the assets listed in a planning document is titled and set up in accordance with the client’s planning wishes.

“Asset funding is just the tip of the iceberg of all the easy-to-implement ideas for estate planning,” she said. “Having a proactive check-in with a client to discuss asset funding takes little time and yet has the potential to make a huge, positive impact.”

What It Means

Many stressful rounds of trust litigation are the result of asset funding failures, Rosenberry warned.

“Having an account or asset pay out to an unintended beneficiary, or being trapped in the court’s probate system, can be devastating to a client,” she said.

April Rosenberry

Rosenberry has a master of laws degree in taxation from the University of San Diego.

She started out in financial advice services as an associate tax specialist at KPMG US in 1999. Since then, she has run her own law firm, worked as a vice president at Wells Fargo’s private client arm, and served as managing attorney for estates and taxation at a law firm near San Diego.

She joined EP Wealth Advisors in 2021.

Good Asset Funding

Rosenberry said strong asset funding begins with three basic principles.

“First,” she said, “that means that all accounts with available beneficiary designation, pay-on-death or transfer-on-death fields should have an appropriate beneficiary listed, both a primary and secondary beneficiary. Whether the primary beneficiary should be a person, persons or a trust depends on the client’s financial goals and wishes.”

Putting ownership in the right name and getting the names right matter, too, she said.

“Asset funding means that all businesses should be appropriately titled to ensure protection from creditors and lawsuits, and to ensure the business can continue if the owner becomes incapacitated,” she explained.

“Last, but certainly not least, real estate should be titled appropriately — whether in a trust for probate avoidance or with co-owners for tax planning purposes,” she concluded.

She recommended that an advisor or agent who helps with estate planning be prepared to introduce clients to lawyers who can help them with asset funding.

Reviewing asset funding “is especially important for clients that have recently been married, divorced, updated their estate plan or changed accounts,” she said.

April Rosenberry. Credit: EP Wealth Advisors