How financial planners create a successful estate plan

Last fall, Michael Piershale contributed an article to Trusts & Estates that highlighted the role of the financial planner when implementing estate plans for clients. The byline, which was published in September 2012, reviewed leading concerns of clients – such as titling mistakes, inheritance issues, and more.

The piece also outlined how financial planners keep these concerns in mind when developing (and accomplishing) successful estate planning goals. Below is an excerpt from the article:

25 YEARS OF EXPERIENCE: Michael Piershale shares his knowledge
with Trusts & Estates 

After practicing financial planning for almost 25 years, it has become evident that having estate planning documents does not always mean the estate planning goals are being accomplished. Usually, this is a result of not clarifying objectives before legal documents are drafted. In order to implement solid plans on behalf of your client, advisors and planners should review the key goals and make sure to consider the following: 

Avoid unnecessary death tax at both the federal and state level. One of the most important things for a planner to check in this area is if a married couple is properly using a credit shelter trust when their assets exceed the estate death tax exclusion amount, which next year will be $1 million. While the unlimited marital deduction protects widowed spouses when assets are passed, it is the later generations that advisors need to keep top of mind. By working with a client in advance and recognizing potential asset challenges that come with death tax, advisers can utilize a credit shelter trust and protect heirs from future tax bombs on the state and federal level. 

Avoid unnecessary probate costs. Many experts claim that the average US probate cost is 6 percent of the gross estate. This means it’s a percent of the “assets,” regardless of what the liabilities are. This can create unnecessary expenses, especially where leveraged property is involved. The most common thing that leads to probate is the titling of non-retirement assets with either a single name or joint tenancy. With such titling, when the last account owner dies, typically those assets will go through probate. Financial planners should be aware of such issues and make sure to point out potential titling problems. Be sure to pass the client to an attorney who would then very likely draft a revocable living trust to make sure assets are properly re-titled.

To read the full article, click here.