Nearly 1 in 6 Americans over 55 were
Dolly Parton, who died at 80 last week after decades of very public, deliberate giving, was worth a reported $450 million and represents both an exception and an example for advisors to
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More than a year-end tax conversation
Part of the challenge around the subject involves going beyond preconceived notions about estate planning and philanthropy. The reframe for advisors, according to Deb Dubin of St. Louis-based Moneta, involves helping clients to think bigger.
When consulting with clients, she distinguishes different setups. One is purposeful, which is the tax-savvy, deliberate vehicle choice, while the other is purpose-filled, which can be more meaningful and aligned with client values.
"It's not only money," she said. "It's time, talent and ties. It's also your leadership, your voice, testimony, showing up in public and saying what you think. That's philanthropy."
To get beyond the numbers and go deeper into the heart of it, advisors can ask clients specific questions around the legacy they want to leave. Advisors also need to get clarity about what matters to their clients and open up the conversation by asking about their family history and values before ever bringing up dollar amounts.
At times, Dubin added, clients might want to see their giving unfold while they are still alive. Literacy was near and dear to Parton's heart, which can be seen through her Imagination Library. The program gave free books to children under the age of 5 to the tune of 332 million books since its founding in 1995. Importantly, Parton was able to see the impact through what Dubin calls "giving while living."
"She could see, touch and feel it. She could take risks," said Dubin. "She could evaluate whether the philanthropy was effective, and she also brought so much joy in her lifetime and got joy herself in return. Dolly didn't wait."
Rethinking heirs and estates
For the child-free client, like Parton, consideration of heirs can present a larger challenge. Bri Conn, a wealth specialist at Mount Juliet, Tennessee-based Child Free Insights, said one icebreaker with clients starts with simple questions about documents.
When Conn asks clients what happens to their bills if they become incapacitated or die without documents in place, she said, "So many people say, 'I have nobody to name.'"
That gap impacts the estate in two ways. Without a will, state law decides who inherits the client's assets. And without a designated power of attorney, state law also decides who makes financial or medical decisions if the client becomes incapacitated. Sometimes, it defaults to a relative the client might not choose.
In that second scenario, "I see resistance in clients," she said, adding that they know they need to pick someone, but having to choose can feel stressful for them. To get around that complication, Conn can cite real-life examples of people she is close to who don't have proper plans in place.
"In the case of my friend, I know for a fact that they do not want the person who, by law, would make their decisions for them, to make their decisions for them," said Conn.
She also helps her clients redefine what constitutes heirs and estates by asking, "Do you want to make an impact and if so, how?"
Conn advises child-free couples, whether married or long-time partners, to consider blind spots, such as one partner, or "solo spouse," handling things while the other is unprepared. Both partners need to go deeper than signing documents and ensure that they understand things like where accounts are located, she said.
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The dream team factor
The industry adage goes that as life gets longer, estates get more complicated. The average client might not have the dollar amounts and concentrated assets like intellectual property, personal brands or private business interests like Parton, but advisors can still take inspiration from how the estate moved.
Rather than try to do everything, advisors should coordinate with professionals to take on anything they're not skilled in, according to Nolan James, a trust and estates attorney with UB Greensfelder in Cleveland, Ohio. Division of responsibility can be broken up by attorney, CPA and financial advisor, according to James.
None of them need to do the other person's job. Instead, "make sure that everyone on the team is working together and rowing in the same direction," he said. "I think that's one of the most valuable takeaways."
Being proactive is also a good idea, according to James, who suggests advisors build up networks and contacts through bar associations, trade groups and organic connections they form on shared cases. Advisors should also maintain those connections rather than simply reach out when they need something.
"When you close that estate, you can take the relationships you developed with the professionals who were involved," he said. "Ask them for a cup of coffee after it's all said and done so that you can connect on a human level. That way you can leverage that relationship to help your next client."
