The Dynamic Partnership of Estate Planning Attorneys & Wealth Advisors
Co-Author – Amy R. Koontz, Attorney at Malouf Nakos Jackson & Swinson, P.C.
As American retirees prepare to transfer a staggering $36 trillion over the next 30 years to families, friends, and charitable organizations upon death1, it’s critical to understand that a seamless transfer of wealth requires more than just a will. This is especially true for those with substantial assets. A properly executed wealth transfer strategy does not merely dictate a financial transaction but, perhaps more importantly, can be used to preserve legacy, values, and familial bonds. Often, the first step in establishing a client’s legacy is creating a trust, the terms of which will implement a carefully designed and thoughtful transfer strategy.
Estate planning attorneys and wealth advisors play significant roles in shaping and safeguarding financial legacies. Their combined efforts can make the difference between a smoothly executed estate plan and a complicated, costly process.
The Estate Planner – Wealth Advisor Connection
Estate planning attorneys and wealth advisors have distinct but complementary roles in managing their client’s financial affairs.
Estate planning attorneys that are Board Certified by the Texas Board of Legal Specialization offer clients legal expertise and specialize in creating, reviewing, and updating legal documents related to wealth transfer and asset protection. They play a pivotal role in drafting wills, trusts, and other legal documents that dictate how assets are distributed and managed after one's passing. In addition, these attorneys are well versed in implementing specialized techniques, such as the creation and funding of irrevocable trusts and family-limited partnerships, to safeguard assets from creditors or legal disputes. Estate planning attorneys are well-versed in state and federal laws concerning inheritance, gift, and estate taxes, helping clients navigate complex tax considerations. Their involvement helps ensure that all legal requirements are satisfied, thereby reducing the risk of contested wills or trusts and potential disputes.
Wealth advisors, on the other hand, focus on managing and growing a client’s wealth according to the client’s long-term financial goals and objectives in order to enhance the value of one’s estate. They work closely with clients to create personalized financial plans, including retirement planning, education funding, and legacy planning. In doing so, wealth advisors offer advice on and access to diversified investment options, asset allocation strategies, and risk management to optimize returns while mitigating potential losses. Their role extends to monitoring investments, making necessary adjustments, and ensuring that an estate's financial strategy remains aligned with the client's overall objectives. They can assist in diversifying assets to potentially reduce the overall tax liability of an estate per their client’s goals and support their clients during financial transitions.
The Power of Collaboration: Wealth Advisors & Estate Attorneys
Yes, estate planning is multifaceted. And often, as an individual’s wealth grows, the complexities of wealth management and estate planning multiply.
Informed decisions surrounding estate transfer methods, tax considerations and specialized protections are crucial to forming an estate plan that delivers upon intended goals. When legal and financial professionals collaborate on behalf of a client, they can efficiently work together to strategize and design the plans necessary to safeguard wealth, minimize taxes, protect final wishes, and maximize the impact of one’s legacy.
Granite Harbor strategically partners with a highly-vetted network of estate attorneys to offer wealth transfer expertise for high-net-worth individuals and families. We consider collaboration with tax and legal professionals an integral part of all client relationships, as we firmly believe that a team of advisors with diverse perspectives from subject-matter experts are central to a client’s ability to achieve long-term financial success.
How Professional Partnerships Benefit Clients
When legal and financial professionals come together on behalf of a mutual client, it is the client who benefits most.
Collaboration between professional advisors allows for an individual's financial affairs to receive the benefit of multiple perspectives, with different (albeit complimentary) priorities in mind. This lends itself to greater ease in identifying potential scenarios where, for example, legal safeguards could mitigate adverse financial repercussions in the settling of one’s estate. Or, comparatively, where adjustments to a financial strategy could work to reduce risks, taxes, or fees associated with the distribution of one’s assets upon death. The synergy between legal and financial experts streamlines the estate planning and settlement process, creating efficiencies while allowing clients to make informed decisions to maximize their wealth and solidify their legacy.
Proactively Planning a Legacy: Wealth Transfer and Asset Protection Strategies
Emotions aside, estate planning can be complicated for a variety of reasons. There is no “one-size-fits-all” solution in estate planning. Families with minor children, for instance, have different considerations than families with adult special needs children. Business owners with a desire for the continued successful operation of a family business after their passing have priorities that are distinct from those of business owners who plan to sell their businesses to third parties during their lifetime. For other individuals, legacy planning may mean leaving an estate to a notable cause or charity rather than to family members or friends.
While every client has his or her own set of priorities, universally, clients typically seek to:
- minimize tax liabilities on the distribution or transfer of assets,
- plan for what-ifs and other unexpected life events,
- reduce or eliminate any unnecessary obstacles, decisions, or expenses for intended beneficiaries and
- maximize the estate value for intended beneficiaries or charitable organizations.
Every estate plan is unique, and personal situations require a tailored set of solutions for each client. Perhaps the single trait that all estate plans have in common is that all plans benefit from the professional support of both legal and financial advisors. Other planning considerations may include:
For families, efficient wealth transfer strategies may include utilizing life insurance for wealth transfer or employing other investment vehicles to help reduce tax burden. Establishing contingency plans and financial accounts to protect loved ones from unpredictable life events, such as sudden illness or changes in family dynamics, especially for households with minor children, is often a priority.
For individuals, charitable gifting strategies for clients with philanthropic goals can help maximize tax benefits and contribution impact. For example, a charitable remainder trust (CRT) enables clients to generate an income from their accumulated assets while living, with the remainder donated to favorite causes at death.
For business owners, evaluating tax-favorable corporate structures and limiting legal and financial liability exposure are essential for protecting wealth. Strategic collaboration between a trusted wealth advisor and estate planning attorney may encompass initiatives like:
- Succession planning
- Buy-sell agreements
- Key-man protection
- Facilitating business sales to an ESOP for enhanced liquidity
Related Topic: “Cash Flow Planning for Early Retirement: Six Considerations for High-Net-Worth Individuals”
What Makes an Effective Partnership Between Estate Planning Attorneys and Wealth Advisors?
To ensure an effective partnership, choosing professionals with best-in-class traits is essential. While professionals with a collaborative arrangement in place can be a value-add, clients can also bring together two or more trusted individuals with the directive to work on the client’s behalf. For clients seeking new professionals to partner with, criteria to evaluate include:
- Education and Experience: Clients should consider certifications, reputation, firm experience and range of services offered, and educational resources available to identify areas of expertise that align with needs.
- Ongoing Professional Development: With constantly changing tax laws, legal precedents and financial regulations, a commitment to ongoing education is paramount when working with financial and legal professionals. Estate planning attorneys that are Board Certified by the Texas Board of Legal Specialization, for instance, have heightened continuing legal education requirements than those attorneys that are not Board Certified.
- Objectivity and Independence: Maintaining objectivity is crucial in the realms of finance and law. A commitment to serving the client’s goals with integrity should be a top priority.
- Strong Communication: Effective communication is vital to any professional relationship. A trusted advisor should provide personal, proactive, and timely communications to clients. The client should feel comfortable asking clarifying questions, as the client’s understanding of the plan is of utmost importance.
Creating Trusted Advisor Relationships
Partnerships with the right professionals allow RIAs to offer enhanced services beyond mere investments. Understanding taxes, personal goals, business concepts, and the significance of future planning are all part of the comprehensive approach we advocate for at Granite Harbor.
Ultimately, the primary goal of every professional advisor should be to help the client with the best solutions possible for their unique situation. Granite Harbor encourages partnerships that prioritize the client’s best interests—making life easier for everyone involved.
Whether you’re an investor seeking the benefits of a proactive team or an estate planning professional interested in exploring partnership opportunities, schedule a call today to discuss how we can help.
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