What's the right way for an advisor to handle estate planning? Is there even one right way? Apparently not. Before I began to write my 50th estate planning column for Financial Planning, I asked four financial planners how they approach such efforts. There were some common threads, but each emphasized and elaborated on different points.


One common view: Advisors uniformly see estate planning as a critical part of the financial planning process. "We work holistically. Estate planning is always part of what we address for clients," says Marilyn Capelli Dimitroff, president of Capelli Financial Services in Bloomfield Hills, Mich.

Estate planning is a major reason why clients seek out advisors. "Clients view our involvement with estate planning as a pivotal piece of their planning," says Greg Plechner, principal and wealth manager at Modera Wealth Management in Westwood, N.J. "People come to us because we provide holistic planning, including estate planning," adds Carolyn McClanahan, founder and director of planning at Life Planning Partners in Jacksonville, Fla.

As the comments demonstrate, the word "holistic" came up a lot. Indeed, "Estate planning is so important to our clients and the planning process that we dedicate a quarter a year to reviewing estate plans," McClanahan says.

Holly P. Thomas, who runs her own planning firm in Tampa, Fla., echoes the concept as well. "I believe in touching every aspect of the client's financial life, and estate planning is a great starting point," she says.

"If the estate plan is not addressed, it could represent the biggest risk to the client's plan. So many clients have not done a plan, or their plan is so old or from another state, that we start with the assumption that a new client doesn't have a plan until we learn otherwise. We educate them on the importance of this. If your wealth will not be transferred to where you want it to go, how can any plan be effective?" Thomas asks.


How does estate planning really get addressed? I asked the four planners about what topics they think qualify as estate planning, how deeply involved they are in the process and how much time they devote to it.

"Estate planning is defined as the process of getting resources to where you want them to go with the least cost and least problem," Capelli Dimitroff says. She defines the process as one that includes risk management, a review of insurance coverage - life, disability and liability - tax planning, cash flow analysis and more.

Thomas has a different perspective on estate planning, and minimizing estate taxes isn't central to it. "My clients tend to have between $1 million and $5 million. Estate taxes are no longer an issue," she says.

"Their estates are big enough that what we do need to address are health care, children fighting over money and second marriages. Caring for elderly parents, multigenerational relationships and other personal planning issues remain significant," she adds. "Many people are more receptive to memorializing their thoughts and wishes for their heirs, and protecting their health care wishes, than they are to taxes. We found this to be true even when the estate exemption was only $600,000."

While her comments may be taken as blasphemy by estate-tax attorneys, they reflect the reality of what planning should focus on, as the four advisors see it. With estimates of only 5,600 estates a year paying federal estate taxes, Thomas' observations are likely to ring truer in the future - barring a return to much higher estate taxes when current laws expire in 2013.

The scope of the estate planning process also needs to be defined. How far does the involvement of the advisor extend?

"We endeavor to provide the broad strokes and frame the discussion without recommending only one course of action," Plechner says. "There is not a great deal of uniformity in how estate planning attorneys solve problems, and there is often more than one way to accomplish a client's objectives. What we do is identify issues and potential costs of ignoring them, and then encourage the client to investigate the most appropriate solutions," he adds.

When McClanahan's firm conducts its quarterly estate planning review, planners confirm that beneficiary designations and intended distributions in a client's will match current wishes. "We maintain a spreadsheet for a client that summarizes key provisions of the estate plan," she says.

Thomas believes there's a significant gap between what some financial planners say about estate planning and what they actually do. "That gap needs to be filled," she asserts. "Some planners only give lip service to planning, and they'd benefit their clients and their practice development by expanding the scope of estate planning services."


Advisors who are serious about estate planning know the process has to begin with a conversation with the client. That's often easier said than done.

"People don't like doing estate planning," Capelli Dimitroff says. "It is amazing how many people put it off. They don't want to deal with it. Clients come to us for investment planning and financial planning, and we can slip in the estate planning discussion. We'll open the conversation with the client by asking them about how they want their finances handled if they cannot function or after they pass away. We also get a complete set of documents, scan them and read them to get a sense of what happens at death under any existing plan," she explains.

To initiate the discussion with clients, an advisor will often suggest creating a trust for children or grandchildren which, upon the client's death, would distribute assets when a beneficiary reaches a specified age, such as 30 or 35. Capelli Dimitroff may suggest alternatives so that if a child is going through a divorce or being sued, for example, the money isn't put at risk. That's a great way to get a client's attention and push the estate planning process forward, she adds.

The approach might depend on the particular expertise of a planning firm. At a minimum, a CFP has had the review and studied for the estate planning component of the CFP exam. But many advisors have substantially more expertise.

Capelli Dimitroff headed a personal trust department for a regional bank, for example, so it's an area in which she has additional expertise. Plechner is an enrolled agent with the IRS, which means he has extensive tax knowledge.


In most cases, estate planning is a group effort rather than an individual one. Often both attorneys and accountants are involved.

Next month, we'll take a closer look at how advisors quarterback a team approach to estate planning for their client, running interference when necessary and working hard to ensure that integration is as seamless as possible.

Martin M. Shenkman, CPA, PFS, JD, is an estate planner lawyer in Paramus, N.J. He runs laweasy.com, a free legal website.

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