What is Really Important in Estate Planning

When clients ask, “What's really important in estate planning?” we as professionals put on our "expert hat" and generally respond with something like "you want to maximize estate tax savings" or "you must avoid probate.” We go on to wax eloquently, often a great length, about the many strategies for protecting assets and saving taxes. While these are laudable goals, they fail to take into account what should be the primary goal in estate planning, protecting the client’s loved ones.

As planners we are often more comfortable with the details of estate tax law than we are with discussing the personal situations of our clients. We tell them all the wonderful things they can do, rather than determining what they want to do, then try to fashion a tax and probate savings strategy around that. Discovering what clients really want for their families is sometimes difficult because they may not know themselves. They may be struggling with various issues with their spouses, children, grandchildren, or even parents and have not been able to voice those issues to anyone.

While we are all great technicians, perhaps we should spend much more time becoming great listeners. We serve our clients best not by telling them what they can do, but by asking them questions to better understand their concerns and desires for their family.

Some questions that may help clients articulate their wishes include:

1. Do you know the current value of all of your assets and how they are owned?
2. What kind of future lifestyle do you and your spouse want to enjoy?
3. Are you worried that the lifestyle you want to maintain may mean your children will receive a smaller amount than you would like to leave them?
4. Do you have any concerns about the financial acumen and spending habits of your spouse or significant other?
5. What is your relationship with each of you children, and will that affect what you would want to leave them at your death?
6. Do any of your children have any issues such as alcohol or drug dependencies, troubled marriages, gambling problems or other issues that affect their ability to handle money that you leave them at your death?
7. If you could place restrictions on the money these children eventually receive, what would you like to do?
8. Do you have any elderly relatives to think about if something happens to you unexpectedly?
9. Do you have any charitable inclinations you would like to have met from the funds available at your death?
10. Are you comfortable that the assets you currently have are sufficient to allow you to make small, or even large, gifts to your children or grandchildren?
11. Whom do you trust to make medical and financial decisions for you and your family if you are incapacitated or after you pass away?

After clients answer these questions, and more that stem from them, then we can explain the technical issues. In this way, our clients understand that within all the strategies and documents their true wishes and hopes for their family can be met.

In this ever-changing world, it is not enough to know the law. We must make a concerted effort to know our clients better and understand their needs before making any recommendations. Only then can we truly serve them well.

Alan Ferrara and Matt Ferrara