Estate planning isn’t just for estate planners. If you’re a financial advisor, you might think estate planning is something that only benefits your clients. But the truth is, it directly impacts your business too.
Why Estate Planning is a Smart Business Move for Financial Advisors
Many financial advisors focus on growing wealth, but what happens when a client passes away? If there’s no estate plan—or a poorly executed one—it can cause:
- Estate taxes reducing assets under management
- Confusion and frustration for heirs
- Money leaving investments to pay for probate and legal fees
- Heirs moving assets to a different advisor
These issues don’t just affect your clients’ families. They impact your business, your retention rate, and your ability to grow through referrals.
How Estate Taxes Shrink Your Portfolio
In Massachusetts, estates over $2 million are taxed, often reducing the amount of investable assets heirs receive. For example, a client with a $5 million portfolio may have their estate taxed at roughly $400,000, leaving heirs with far less to invest. Proper estate planning can minimize taxes and keep assets growing.
A Bad Estate Plan Pushes Clients Away
Imagine this: You’ve worked with a client for 20 years. They trust you, rely on you, and value your advice. But when they pass away, their heirs are hit with a long, expensive probate process because no estate plan was in place.
What happens next?
🔹 The heirs blame the financial system that failed their family.
🔹 They withdraw money from investments to pay legal fees.
🔹 They take the remaining assets elsewhere—away from you.
Now, let’s look at the alternative.
If that client had a fully funded trust, clear instructions, and a smooth estate plan, their heirs wouldn’t experience frustration or financial panic. The investments would stay intact, and the heirs would see the value of keeping you as their financial advisor.
An Easy Addition to Your Annual Reviews
You don’t have to be an estate planner to help. Simply adding estate planning to your annual client reviews can prevent major issues. Here’s what to do:
✅ Ask if they have an estate plan (If not, refer them to an estate planning attorney.)
✅ Check for trust funding mismatches (Are all assets properly titled?)
✅ Discuss potential estate tax impacts (Is their estate over the MA exemption of $2 million?)
✅ Help clients understand how their wealth will transfer smoothly
Trust Funding: A Hidden Risk That’s Easy to Fix
Even clients who have trusts often don’t fund them correctly. If assets aren’t moved into the trust, the estate still goes through probate—defeating the entire purpose of the trust!
By checking trust funding as part of your financial reviews, you give clients peace of mind while also preventing future problems.
Estate Planning = Stronger Client Relationships
At the end of the day, financial advising is about relationships. Clients trust you to protect their wealth. When you help them with estate planning, you’re not just securing their assets—you’re securing their loyalty.
A well-served client doesn’t just stay with you. They:
🔹 Bring their spouse
🔹 Introduce their children
🔹 Refer their business partners and friends
Generational wealth starts with generational relationships.
Next Steps
If you’re a financial advisor and you want to integrate estate planning into your practice—let’s talk. Estate planning isn’t just about legacy. It’s about business growth.
