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- [00:00]
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Foreign.
- [00:09]
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What is up? And welcome back, everyone, to another episode of the Practical Planner Podcast. I'm your host, Thomas Colpelman, and here with me are both Dave and Ann. And I'm excited for this episode. I feel like, you know, we. We go between media episodes on very dense, you know, estate plan topics to like, okay, how can advisor better help on estate planning? And I think we've talked in some previous episodes about, like, kind of what' some of our roles are. But today's episode, we're really going to be breaking down kind of like the three phases of where advisors help, right? So phase one is just actually nudging people to get their estate planning done, educating them, et cetera. The second one is, okay, your estate plan is done. Now what do we help you do? Right? Like attorneys, I think they give them the estate plan. They kind of give the breakdown of, here's the things that you need to go do, but they're really not ongoing helping you year after year, making sure everything gets implemented. And then the third phase is reviewing and changing and updating, etc. And so we just want to think about how does an advisor best serve in this area? So when you guys think about phase one, you know, before it's even done, where do you see the. What do you see as the advisor's role?
- [01:19]
C
I mean, I think the advisor is a key motivator. They're the captain of the ship. You know, when I was practicing, you know, clients may. They may have come in from a referral from a financial advisor, may have come from another area. But when I sit down with them, that's usually the first time meeting them. And it's a really short snapshot to get as much information as possible to create that plan. And there's a lot of context missing, a lot of context that the advisor has in their possession over years of a relationship, that they've been meeting with the client annually. They know the family dynamics, they know their level of sophistication, they know their needs, their personal biases, all things that are really critical to have context for the estate planning conversation. And if the advisor isn't pushing them to help them get towards getting the plan in place, I think they're doing them a disservice because they sit in a really key role. And usually that client trusts that advisor maybe more than any other financial professional that they have. And their voice in getting them across the finish line could be really, really impactful.
- [02:29]
B
I think that's a really good point. So there's actually like 1A and 1B here, right? 1A is how do I actually nudge my client to getting it done? Because let's be real, you know, my, my client average age is 40 years old. Most of them haven't done their estate plan, and I haven't found any higher success by age, right? So we know there's already an issue here. People don't want to get their estate plan done, they put it off. And so as an advisor, you know, we can help put it to the front of their mind, right? And I think one part is initially when you start the client helping, put it on the, you know, some timeline, right? Like, hey, maybe phase one of working together is we're gonna go through cash flow, investments, taxes. Phase two is maybe in insurances and college planning, whatever. And then phase three is estate planning. So you've already kind of nudged them into it. But I think every other advisor here can attest to this, that it's still something that people push off, right? Even when we get to that phase, it can be on their homework, maybe they don't do it. And I think this is where, you know, nudges based on life events become super helpful, right? So for me, with working with this audience, one of my clients would be like, hey, gotta let you know we're pregnant and we're due. Or, hey, maybe we're having our second child or something like that where you're like, great, you need your estate plan done before this second baby is here, right? You need guardians, you don't, you know, you can share some life stories of things that happen inside of other clients you work with or people, you know, to kind of push them into it. And let's be real with estate planning, fear based is probably a little bit of the way to do it, right? Like, what if this happens? Do you want that to happen? So I think there's those nudges, right? It could be kids, it could be maybe a parent passes away and maybe, you know, I recently used one where I had a buddy who passed away at 29 and I feel like I had to email my clients about it, right? Like, we all feel like this won't happen to us, you know, it happens to other people. But in reality, it could happen to you, and it does happen to people just like you. And so there's all of these stories and just life events that you can help nudge people into it. And I think that's like part one. And did you have something you wanted to add to that?
- [04:33]
A
No. I mean, I think you're Right. And I had some financial advisors I worked with who would use like vacation as a time to like, remind somebody, like before you go. Yeah, like people, you know, you have a big family trip planned and like, everybody's going to be on a boat potentially, like, you know, and so you can really use, use those types of moments where they come to you to like, think through that angle and say, you know, what would it be? I think fear is a good motivator. I would also say that, you know, normalizing just the fact that, like, people are doing the estate plan, so doing it on a cadence can also work for some people. So you just kind of have to know your client as well.
- [05:16]
B
Yeah. I think fear based doesn't work for everybody, but naturally it works in a lot of areas. Right. I mean, you can look at every parallel. Right. Like health and fitness. Right. Fear based of weight or whatever can be a nudge. Right. So over here in personal finance, it just might be like, you don't want this to happen to your kids. Or it could be statistics about, you know, how many people pass away before X number age. I don't know what it is, but fear based, especially because I think in most people's mind, estate planning feels less about, like, fulfilling what they want to more about, like, fear of that. Like, fear of that is why I need an estate plan. So I've naturally found that to be successful for, you know, the right people. But so I think that's 1A. 1A is the nudges, right? How do we push people to get this done? And I, I think Maybe there's even 1B and 1C. To me, 1B is just educating them and connecting them to an attorney or having them go through wealth. Right. I think part of it is that and the other part is educating them to understand what even they're thinking about. Right. Like when you're going to work in the estate planning attorney, a lot of people's minds are, how do I reduce this time and reduce the fees. Right. So they've never heard about a will, a revocable trust, you know, joint versus individual trust, all the other documents, key people to pick, et cetera. Well, the attorney's gonna need to take the time to educate them on it. So like me personally, in my process, after I talk to a client and push them into this phase, I send them an email that has we talk about in the call. And then I send them an email with five blog posts and five podcasts I've done educating them on all of those key parts so they can spend some time of hey, I know you just talked to me about this for 30 to 60 minutes, but you threw, you know, basically a hundred level course of college at me in that amount of time. I'm not going to digest, understand all of that. So then they get the second time of learning about it through that content. I think again, this is a huge reason why I created content advisors should is them learning from you is super powerful for a lot of reasons. But educating them there, we connect them to the attorney and then the last part before it is educating the attorney on their life. I think if you have connections with estate planning attorneys that you use, they're never going to charge you to educate you about their client because they're excited about the business you're sending them and so you get to share with them who they are, key things that you need to know about, key things that we're thinking about. So that goes back to kind of Dave's point of like I don't have the time and they don't really want to pay me for the time for the whole get to know process. Let the advisor kind of handle that part.
- [07:44]
C
Yeah, absolutely. And I think another big part of it is to understand, especially for those clients who have nothing in place yet, that they can really start simple and just start with the foundation. They don't have to tackle it all at once if it's something that could be overwhelming and they have a paralysis of analysis and they have LLCs and they think they might need irrevocable trusts in place and they have all these different priorities that they want to tackle with their estate planning. But they don't even have a will or revocable trust or powers of attorney in place yet. I think that's another key area is just trying to calm it down, don't let it be so overwhelming because obviously death is not something people want to think about. They want to put it off as much as possible. And to the extent that you can break it down, obviously if you can offer them resources in accessibility to just start with the foundation. Foundation, get their base estate plan in place and then build off it from there so that they at least have something in place. And it's not just going to be up to the state to decide, you know, what happens if, if they become incapacitated or they pass away because it's going to be a real mess in the first step towards fixing that mess is just getting the basic documents in place.
- [09:02]
A
And something here that I'll add to Dave's Point is, I'm sure that all of you have had this frustration sometimes where you, like, finally get this CL over the hurdle. You're like, go get your estate plan done here, like three attorneys. And maybe they picked even they did, like, three calls, half hour long. At least they put in all this time to like, pick their attorney. And then as you're going through the asset list or maybe like, their goals, all of a sudden the attorney is like, well, you're going to have to hire a second attorney to do xyz, because I don't have that capability. So I'm thinking, for example, in my case, I had a client who was located in Georgia, and they happen to have California real estate. And I got kind of, like, brought in because I could do the, like, real estate component. We have something called Prop 13 here in California where you can do some planning around that. It's like a small part of the planning. It's important, right. If you have, like, really appreciated property. But then the client just, like, panicked and was like, I didn't sign up for two attorneys. I didn't sign up for, like, this $5,000 quote to become, like $7,000. And they just left the project. Just, like, did not want to do even their Georgia plan. Right. And so you should also kind of like prep them to be like, at least get the Georgia part done. Let's get some of it done, even if it's not perfect. And when they have, like, a little bit more of like, it's like doing a renovation on a house. Like, some people are like gut Renault, and some are like, oh, I'll work on the bathroom first, and I don't want to move out of this house. Right. So you kind of need to know your client's appetite for this and just like, like, getting something in place even if it's not perfect today is okay.
- [10:47]
B
Yeah, Yeah, I completely agree. So that really gets you through this first phase. Right. And then now what we're talking about is we're meeting with the attorney. I think part of the advisor's role can be if it's simple. You probably don't need to go to those calls with the attorney, but you can, right? I think that one's optional. I doubt you're going to go to all the interviews unless you're like, family office level. The other ones might be, hey, go to these three. They're all great. Hire one, and then I can either come to the call or just help you review the estate plan when it's done. Right. Those are kind of your two options, I think there's value in both. I think as the advisor coming to the call can be helpful because there might just be things that they don't think about. But I think the next one, and one thing that I do with a lot of my clients is before they sign and put it in force, I use wealth to visualize it. Because what I found is almost no good Estate planning attorneys have good visuals. Afterwards, everybody's pretty much lost on what they decided on. So we put it into wealth, use the visual, go through it and say, like, here's the key things that you picked. This all looks good to me. Do you guys feel good about it now that you're able to digest it? Right? And then they go get it notarized. Our job is to help make sure it gets funded, right? Funded one, with real estate. But two, also the whole part after that. Because what I found is a state planning attorneys kind of give this, like, now that the trust is set up, here's what you need to do. But they're only going to do the things that are actually like document changes or deed transfers, right? So they may move businesses in, they might move houses in, but they're not going to go retitle your taxable account for you or your bank accounts or change your beneficiary designations. And so this is where the advisor can really come in. And if you're managing the assets, right, you can make beneficiary changes and title changes, or if you're only managing some, you can help ensure that all of those get done. Because at the end of the day, right, we need to make sure that the estate plan is funded and the beneficiary designations follow it, or maybe not worthless, but it's not. It's not living up to the full potential.
- [12:46]
C
Yeah, absolutely.
- [12:47]
A
I will say funding is really annoying for you, but also for your client, right. Because it just feels like homework. It could like getting your estate plan done. Everyone knows, like, oh, I have to do that. Getting the trust funded feels like even more homework, even more of something you can pull off. But the thing is, what's wonderful from your perspective is if you did the funding and you know, the ins and outs of that person's estate plan when they pass away, you are the natural person, they call that. That's absolutely. To you to fund that trust.
- [13:23]
C
And it can go the other way. Honestly, I've seen it where, you know, changing the beneficiaries or changing the title on a brokerage account, it is annoying and it requires paperwork and sometimes it can be frustrating. It's not going to necessarily help your aum, you're just moving things around. But if you're frustrated and not super helpful, let's say if the attorney tries to coordinate with you to get that in place, it's going to come back to the client and it's not going to sound real good. And so it is important because there are some attorneys who do handhold through that process and they actually will coordinate with the advisor. And they have to coordinate with the advisor because they need those, those forms, that paperwork. They don't know the process to get it in place. So a really important role that the advisor has to help make sure that that estate plan is comprehensive and it actually works.
- [14:19]
B
And I think that's a really good point there too of like, I think at the end of the day, that's how you win with your clients is in those little things. They might be big, but those little things that don't add more revenue for you. Right. Like, I think they actually see you do some things that are like, okay, that's not, it's not insurance product, it's not more in assets. So at the end of the day, you know, I love that you're willing to step out and help me on this, even though it doesn't really do much for you. Because I've, from a lot of people I've met with, they said like, it feels like my advisor will only talk about things that make them more money. And that's not how you want your clients to think about you.
- [14:54]
C
Right.
- [14:56]
B
Okay, so then now we're going through the funding side of things. So then part three is making sure your estate plan is always up to date and reflecting your life. How do you guys see the advisor's role and what are some common times of updates and nudges that we need to put for them?
- [15:13]
C
I think there's natural points and then there's just pure passage of time. Natural points are life events when they have a child or they have grandchildren or there's an unfortunate accident or someone's having a substance abuse issue. A minor becomes age of majority. There's so many different areas where you should look at your estate plan again. And that's why, you know, it's so critical with an advisor. Most of them have this annual requirement that they meet with their client every year. Have estate planning be a part of that. And if you have tools like with wealth.com, where you can easily upload documents and get a quick summary to get an understanding of where they sit. I mean, it's, it's a great way to be able to make sure that they're on top of their estate plan and it's not becoming stale. Because, you know, I've talked about this where when people get their estate plan done, I think they breathe a sigh of relief and they're like, oh, that's done. But it's a living and breathing process and a few years down the line it might become stale or obsolete. You know, I tell the story about burning CDs, you know, I found one at my mother's house where I burned a cd and I looked back at it, you know, it's probably 20 years ago. And I was like, well, that was my taste in music, you know, that, that, you know. And you know, you think about it, when you create something that long ago, inevitably there are going to be things that are probably different that you probably want to change. And a lot of clients are sitting with documents that are 10, 15 years old. Their family dynamics have changed, the laws have changed, their net worth has changed. So if they just had the ability to just on an annual basis just, just do a checkup on it and it might, they might not need to change anything for, you know, five years, 10 years. It depends on the circumstances. But at least have ey on it so that you know that you're constantly keeping up with the maintenance of it so that you're not going to fall into a situation where it's stale and then something happens to you and the plan doesn't roll out the way that you thought it would.
- [17:17]
B
I think it's a great point. I think you also have to think about the people, right? So like trustee, maybe you didn't want your kids because they were young, but now you have adult kids and you think they would be good. Or hey, you picked your dad or your mom and one of them passed away, right? Like now you need to move some of those out. So I think there are some of those life events that can be helpful, especially if you're an advisor and your client lets you know, like, oh, my dad passed away this year. It might be easy for you to obviously be there for them, but the next meeting be like, hey, I know this was part of your estate plan. We need to make sure we get this updated because otherwise, you know, there's no co trustee or backup trustee or contingent trustee and that, that could be an issue.
- [17:55]
A
The other thing that I will say is, you know, this is the, we're living the great wealth transfer right now and so naturally, I think your clients have family members who pass away, perhaps their own parents, and kind of it's okay, I think, to show a natural curiosity about how things are going with that estate administration, how they're feeling about it, you know, beyond just, you know, what is it that you're going to get, that we're going to get to invest, or, you know, like that is going to now figure into your portfolio. But more about the process. Right. And like, are they playing the role of trustee or executor potentially? How's that going? Right. Or are they just a beneficiary and somebody else is handling the administration? How's that going? And just through that, just having a conversation around it, you might actually uncover those nuggets that you can use later or within that same conversation to encourage your client to do their own estate plan too.
- [18:55]
B
Great point, great point. So I feel like at the end of the day, the advisor plays a really critical role. I mean, research shows that advisors are like the number one push for people to get their estate planning done. And so I think the takeaway for advisors here is like your first job is to get people to get their estate plan done. Whether that's using life events, whether it's using statistics, whether it's using stories of other clients or your life. Like, help get them there, help them pick the attorney if they don't really have one, or have them use wealth.com if you want. Right. Then educate them so they go into it. Not like everything is brand new. Have it, get it done, review it, make sure everything gets put in force. Right. Everything that needs to be moved in the trust does, if it's a trust, if not, you know, beneficiary designations, either way, and then review it on a regular basis. Right. It should be part of your process. I think most advisors either do this on a every one, two or three year basis, review, make sure it's correct, update it, make sure beneficiary designations are still there. So, like, even though estate planning is a job of the estate planning attorney, I almost feel like the advisor job is at least 50% of the role on the estate plan. And then there's also a lot that we can do if a spouse passes away or one of your clients passes away. Right. There's a pretty big role in the hand holding and helping ensure that everything gets carried out the right way. Anything I missed there that you guys feel like we need to add in? Okay, perfect. Well, I feel like that was a really helpful episode for advisors. I know early on I always wondered about this. Like, I just know people need their estate plan done, but what does that mean? How do I help? What's my role? Am I overstepping? Am I not? And so hopefully this is helpful for you advisors to just become better, do more than manage assets. Really help on this, you know, life planning, family planning side of things. And if you guys felt like this episode was helpful, please don't forget to give us five stars. Rain subscribe. And again, if you guys have any questions, we're always coming up with more topics, so feel free to submit them and we'll make sure to get them answered. But we'll see you guys back here in a couple weeks. It.