Advisor Connections Newsletter™
Finding the Fun in Trust 'Fun'ding
Finding the Fun in Trust 'Fun'ding
A powerful collaboration is growing in the estate planning field. Attorneys and financial professionals are partnering more closely than ever to ensure that their mutual clients receive integrated planning tailored to the client’s unique needs and goals.
Trust-centered estate plans require financial assets be transferred to the living trust. This process is commonly referred to as trust funding. Trust funding occurs when asset title, ownership, and beneficiary designations are assigned to the client’s living trust. Trust funding must be carefully accomplished to ensure all client goals are accommodated. Trust funding considerations include important factors like estate and income tax ramifications as well as issues such as maintaining homestead exemptions, avoiding acceleration of promissory notes and mortgages, and maintaining property and casualty insurance coverage.
Client family circumstances like second marriage situations or long-term care concerns also may impact trust funding recommendations. The transferring of assets to a living trust should be done with careful legal and financial planning.
Involvement of the financial advisor during the trust funding process is helpful and prudent on many levels. Not only is it advantageous for the client, but is optimal for the financial advisor too. Let’s examine the benefits to financial advisors in greater detail.
Continuity and Trust: The participation of the financial advisor provides a measure of continuity that puts clients at ease during the estate planning process. When structuring assets to coordinate with the estate plan, clients routinely welcome the involvement of their financial advisors. They recognize the value of their advisor’s expertise and are reassured when both attorney and advisor concur on financial and trust funding recommendations. Confidence in both the estate plan and the planners themselves is greatly enhanced.
New Product Purchases: The prism of estate planning and trust funding provides a unique opportunity to revisit tax matters, asset allocation issues, asset consolidation, long-term care concerns, and other financial considerations that impact on the success of the estate plan. This planning process often leads to an assessment of particular holdings and products. In some circumstances, consolidating assets may make sense. Other times, acquiring a new product or policy is the preferred solution. The financial advisor is best positioned to offer guidance and coordinate new business when he or she is an active participant in trust funding process.
Staying the Course: Maintaining current financial positions that support the estate plan is as important as adopting new financial strategies. Estate planning attorneys can serve to reinforce wise financial positions and help to maintain those positions going forward. Although the assets will need to be transferred to trust through the funding process, the assets can be easily maintained under management of the advisor, consistent with how the assets were organized before the estate plan was established. Moreover, the attorney typically encourages clients to continue working with their advisor in the pursuit of their financial and estate planning goals.
Streamlining Paperwork: The financial advisor can also provide valuable support in facilitating the administrative paperwork required by most financial firms when transferring assets to trust. While trust funding can be cumbersome for clients to complete on their own, the financial advisor in concert with the attorney can make this process far more manageable. Routing account transfer applications, change of beneficiary forms, and service request letters through the appropriate company channels are services that clients appreciate and value.
Involved advisors can capitalize on additional service opportunities to distinguish themselves and demonstrate their continued effectiveness Assisting with the trust funding paperwork also ensures that continuity in financial planning is preserved.
New Client Referrals: Occasionally, clients come to estate planning without a financial advisor relationship. Attorneys are often looking for exceptional advisors with a working knowledge of estate planning to partner with these uncommitted clients in a team approach. When an advisor welcomes opportunities to collaborate with estate planning attorneys, they open new doors to grow their practice in ways that boosts revenue and their professional development. Additionally, the estate planning field can increase the number of higher net worth clients in the advisor’s practice.
Keeping the Plan Current: Regular financial plan reviews are important to the achievement of client goals. The same principle is true in estate planning. Changes in the law, changes in family, and changes in finances all impact on the estate plan over time. The client’s estate plan should be reviewed regularly to ensure that it is kept current with prevailing legal guidelines and the objectives of clients. Additionally, routine trust funding reviews are helpful in making sure the assets remain coordinated with the estate plan so that client goals are achieved. Trust funding reviews provide ideal opportunities to revisit estate planning and financial goals and make any needed adjustments. The involvement of the financial advisor in this area helps keeps the planning on track.
Moving Beyond Taxes: The estate planning field is evolving to embrace a definition of “wealth” beyond finances alone. Most estate planning clients express interest in transmitting not just financial wealth to loved ones, but their values, experiences, and accumulated wisdom. Client regularly report that conveying this philosophical wealth to future generations is as important to them as their passing along material goods. Increasingly, attorneys are embracing a wealth reception™ approach to planning – preparing both clients and their loved ones to exchange the cumulative value of human life and experience, not exclusively dollars and cents. Financial advisors can support this holistic planning philosophy by collaborating with attorneys who address both financial and values concerns in their planning.
For these reasons, the role financial advisors play in the success of quality estate plans is compelling. Advisors who embrace opportunities to partner with attorneys provide invaluable client service. They also reap business and professional benefits not often realized outside the alliance.
Most importantly, this team planning approach best serves their client’s interests and goals. Advisors who value this team planning approach and embrace opportunities to work closely with their legal counterparts are in demand in every market in the country. As the estate planning field fosters highly collaborative strategies, attorneys are seeking willing and enthusiastic partners in the financial planning community.
Scott A. Williams has been recognized by Avvo.com as Supurb rated and a Clients' Choice estate planning attorney, as seen below:
Contact us by email: Info@LifeDesignLaw.com
Request access to our Clients page, Click Here
Request access to our Advisors page, Click Here
5700 Lombardo Center Drive
Seven Hills, Ohio 44131
Phone: (216) 236-6480
Fax: (216) 236-6484