Estate planning is often misunderstood as simply drafting legal documents and filing them away. However, as we discovered in our work with clients this last quarter, effective estate planning is actually an ongoing process that involves much more than just paperwork. It requires organization, regular review, and thoughtful implementation to truly protect your legacy and loved ones.
Many people believe estate planning is solely the domain of attorneys, but financial advisors play a crucial role in ensuring your estate plan actually works when needed. While attorneys draft the essential documents—wills, trusts, healthcare directives, financial powers of attorney, and deeds—financial advisors help with implementation, organization, and maintenance of those documents to ensure they remain relevant and accessible.
One of the biggest estate planning mistakes we see is the “draft and forget” approach. Clients often receive a thick binder of documents from their attorney, file it away, and never look at it again. This creates problems when life circumstances change, like relationships deteriorating with the people you’ve named as trustees or guardians. Without regular review, your estate plan may no longer reflect your wishes or family situation. That’s why we work with clients to create simplified summaries of their documents, identifying who they’ve designated for various roles and organizing everything in an accessible format.
Beneficiary designations represent another critical area where estate planning intersects with financial planning. Many assets—like retirement accounts, life insurance policies, and even bank accounts—pass directly to beneficiaries regardless of what your will or trust says. We frequently discover outdated beneficiary designations when reviewing clients’ accounts, sometimes finding ex-spouses still listed on retirement plans or insurance policies. These oversights can completely derail your estate plan if not corrected.
Business interests present unique estate planning challenges that many entrepreneurs overlook. Unlike personal accounts, business accounts typically cannot have transfer-on-death designations or direct beneficiaries because legally, businesses don’t die—their owners do. Without proper planning through tools like general assignments of business interests, business assets may be forced through probate, creating delays and potentially disrupting operations. For business owners with significant assets tied up in their companies, addressing these issues is essential.
Perhaps the most overlooked aspect of estate planning involves incapacity planning through healthcare directives and powers of attorney. These documents aren’t about what happens after you’re gone, but rather about who makes decisions for you if you’re still alive but unable to communicate. Without clear written instructions, family members may face agonizing decisions about your care without knowing your wishes, potentially creating lasting family conflicts. Having these documents in place reduces the emotional burden on your loved ones during already difficult times.
Estate planning isn’t a one-time event but rather an ongoing process that requires maintenance and updates as your life changes. Just like you wouldn’t expect your car to run properly without regular maintenance, your estate plan needs periodic check-ups to ensure it still reflects your wishes and family circumstances. Working with both an attorney and a financial advisor creates a comprehensive approach that addresses both the legal framework and practical implementation of your estate plan.