Financial and Estate Planners: An Important Partnership
You know it is important to plan for your future: college for the kids, retirement, and security for your family should anything happen to you. We hear all the time that the whole things seems so overwhelming – and often, people just put it off because it just seems so daunting. But once you’ve decided to make the call, who exactly are you supposed to speak with? Is a financial planner the right person? Or an estate planner?
The answer: BOTH! But don’t worry – having to engage both professionals doesn’t make the process more daunting. It can actually ensure the whole thing is smoother, more effective, and less scary.
Your Financial Planner’s Role
Your financial planner will help you identify your long-term financial goals, and put a plan in place to help you achieve them. This process includes analyzing your current net worth, your plans (college, retirement), and a risk profile, which is an evaluation of your willingness to take financial risks and the conditions that can affect that. For example, as you get closer to retirement, you may want to take fewer risks with your investments.
Your financial planner’s job is to educate and empower you when it comes to your finances. And they should actively engage with you over the long term. They should be monitoring your investments and assets, and helping you make decisions based on your circumstances and market conditions.
Because your financial planner is intimately involved in your plans, goals and tolerance for risk, they can be a critical part of your estate planning team. But, they are not experts. That’s why you need both professionals. Often, your financial planner may have an estate planning firm that they work with closely.
Your Estate Planning Attorney’s Role
Estate planners are attorneys who understand the laws and policies in this area. If your financial planner’s role is to help you accumulate wealth, your estate planner’s role is to help you maintain control over it and plan for its distribution upon death.
This includes both the development of wills and trusts to distribute your assets after you’ve died; and also includes planning for possible incapacity during your lifetime. A sudden accident, dementia, or another medical condition could mean you’re unable to manage your personal, financial or medical decisions yourself. A complete estate plan goes beyond wills and trusts to include medical and financial powers of attorney, and contemplates MassHealth rules to ensure you are covered if you need long-term care.
Much like a financial planner, your estate planning attorney will help you evaluate your goals and develop a plan designed to provide security for you and your family, minimize taxes, and avoid probate. You’ll also want to work with your estate planning team to think about MassHealth/Medicaid planning and asset protection in the event you may need in-home, assisted living, or nursing home-level care in the future.
Because the law, your assets, and your family circumstances can all change and evolve over your lifetime, estate planning, like financial planning, is a continuous process. You can’t just do it and be done. You should review your estate plan with your attorney regularly, and update it as necessary.
Why Your Financial Planner and Estate Planner Should Work Together
While your financial planner and estate planning attorney have different roles, their work complements one another. To be effective, you should keep your financial planner apprised of your estate plan and vice versa. In fact, a perfect scenario is one in which both professionals partner together to plan holistically, and in tandem. Many of our clients choose to approach their estate plan this way, and we partner with many reputable and effective financial planners in Massachusetts.
To learn more about our offerings, and talk about the ways we partner with financial planners, please contact our office at 508-532-8639 today.