Are You Getting Legal Advice From Your Financial Advisor? | Brentwood, Tennessee Estate Planning Attorney

At the forefront, let me say the following: majority of financial planners are upstanding people of great moral and ethical character that always put their client’s interests first. However, with that, most clients will speak more with their financial planner each year than they will speak with their attorney.

During the course of a relationship with a client, most financial planners will inform their clients to address their estate planning and will make a referral to a qualified estate planning attorney, or will inform their client generally to address those questions with an attorney.

Sometime, unfortunately, financial planners give a quick answer to the client regarding estate planning legal and tax strategies.

For example, I was recently speaking with a client that had old wills from when their children were young, and now their children were in their 40s with children of their own, and the client realized that it was time to update their estate plan. During our initial client meeting, we discussed their planning goals including: (1) who should be in charge of settling their estate, (2) how they wished their estate to be divided upon both of their deaths, and (3) how they wanted their incapacity to be determined, among many other questions.

However, when we began to discuss their financial assets and financial accounts, the client froze up and said, “why do you need to know all of this information.” I responded, “depending upon the type of accounts that you have and the amount of assets you own, it may be beneficial to explore one legal strategy over another.” This client then stated, “I don’t think we need to discuss this because I have less than $11 million, and my financial planner told me that unless I have more than $11 million, all I need is a Will.”

First, if this financial planner did say this (hopefully he or she did not), but if the financial planner did say this, then it’s really bad legal advice (plus, it may be a crime in some jurisdictions)!

Whether or not you have $11 million in assets or not is completely irrelevant to whether you need a will or a trust. First of all, the exemption is not $11 million before your estate will incur estate taxes, it is $5.48 million (indexed annually for inflation), but can be as high as $10.96 million between married couples who are U.S. citizens if the surviving spouse elect’s portability within 9 months of the date of death (assuming that the parties did not use up any of their lifetime exemption by making taxable gifts during their lifetime).

In addition, having a revocable living trust will do absolutely nothing to avoid potential estate taxes if you have an estate over the $10.96 million estate tax exemption.

Depending upon a client’s needs, your family may benefit from a trust based estate plan if you have a net worth of $1 million. For example, what if you own property in two different states, have an adult child who is suffering from creditor issues, have an adult child who is a spendthrift, have a child who is going through a divorce, or you own property with a low tax basis and potentially high capital gains tax liability for your surviving spouse? A family having any one of these issues regarding their estate planning could potentially benefit from having a trust.

As I tell many people that I speak with each day, estate planning affects the areas of estate and probate law, tax law, family law, real estate law, and even law across multiple states. Each strategy that a family pursues with their estate planning can have an impact across each one of these areas, and will be completely different from family to family based upon unique family circumstances and financial circumstances.

For this reason, as is customary in our office, we invite the financial planner and the CPA into the client meeting so that we can discuss the proposed legal strategy and why this strategy is beneficial over another.

Therefore, when you seek out estate planning legal advice, be careful. Make sure you seek out a qualified and experienced estate planning attorney to address your questions and recommend a planning strategy that makes sense for you and your family.

If you have questions about estate planning, and want to schedule a meeting with your financial planner and CPA to discuss your worries and concerns, please contact us at (615) 472-2482 or e-mail us at [email protected] to schedule an initial consultation to discuss your estate planning worries, concerns, and goals.

We look forward to seeing you in our office and developing a life-long relationship! 

Daniel A. Perry
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Focused on helping seniors, individuals with disabilities and small business owners make informed decisions.
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