"Our role is to raise questions and get clarity for clients, making sure the documents reflect their wishes," says Marilyn Capelli Dimitroff, president of Capelli Financial Services in Bloomfield Hills, Mich. "Many clients will come in with old documents that are not aligned with their current situation and they don't even realize it."
In today's difficult economy, it may no longer be enough simply to point out that a document is out of date. Planners may have to demonstrate a significant inadequacy in order to convince clients that it's in their best interests to pay for updated documents.
GOING TO MEETINGS
Carolyn McClanahan, founder and director of planning at Life Planning Partners in Jacksonville, Fla., agrees that estate planning needs to be a team process. "We attend every meeting a client has with his or her estate planning attorney," McClanahan says. "We really prefer a team of independent advisors." That is the benefit of the team approach.
Holly P. Thomas, who has her own planning firm in Tampa, Fla., offers to help clients interview estate planning attorneys. "We'll also go to meetings with them if they wish," she said. "This is helpful because if the client doesn't remember or doesn't understand something, we can fill in the missing links." It takes many hours of her time, but Thomas believes it's worth the effort.
"We also foster accountability and even serve as a meeting planner, if necessary," she adds. "One of the upfront conditions we have about retaining new clients is that they must address estate planning, or we aren't the right firm for them."
The reverse should also be true:Estate planning clients should have a financial plan in place. Yet often many insist on structuring gift programs, making insurance purchases and taking other-often irrevocable-estate planning steps without the background knowledge to ascertain whether those steps were appropriate in the first place.
Still, Thomas views the lawyer as the expert. "Even if we know the answer, we direct a client to the lawyer so that the client feels the urgency and need to interact with his or her estate planning attorney. We position ourselves as a general practitioner on these ancillary matters, and then we bring in the experts. We believe our role is to coordinate the experts and bring the process to fruition."
Dimitroff agrees about the need for coordination, but bemoans that meetings of the full team don't happen more often. "Unfortunately, the process usually happens piecemeal," she says. "The client has to be open and savvy enough to appreciate the cost benefits of this type of meeting." If a client is recalcitrant, an advisor might consider holding a conference call or a web-based meeting.
Greg Plechner, principal and wealth manager at Modera Wealth Management in Westwood, N.J., says there should be at least an annual review meeting of all of his or her advisors. His firm has a proactive approach to encouraging the planning team to gather. "We tell clients that any meeting their attorney or CPA comes to, we will credit 10% off their next quarterly bill," he says.
In spite of this enticement, the meetings still don't happen as often as Plechner would like. "When they do happen, we get better results with all professionals on the same page," he says. "For example, the CPA and attorney can be informed about a Roth conversion, producing some cash flow analysis that might be essential to a gift plan."
Similarly, the CPA might tell the planner about tax strategies for business clients that impact how and when gains and losses are harvested, and the estate attorney may have information on a trust or forthcoming inheritance that may change the picture. Without the coordinated interaction at a meeting, all parties may fail to see the richest planning opportunities for clients - and the costliest traps.
INTEGRATION CHALLENGES
What are the impediments to offering integrated estate planning services? A major one is compensation. A key challenge for all planners is to educate clients about the cost and benefits of having a team.
Typically, a client may pay a percentage of assets under management to the advisor, but he or she must also pay the lawyer and accountant. Thomas believes "most financial planners simply won't address estate tax planning with sufficient vigor [because] there is no incentive to pursue this type of planning. Some planners would love to do really complete plans, but struggle to get clients to pay for the cost." Unless a client's assets under management are so high that the fee provides leeway to support more sophisticated planning, many advisors might have to charge extra for estate planning services.
