Why You Shouldn't Do an Estate Plan Without a Financial Planner

A financial planner meets with clients in her office to talk about estate planning.

(Image credit: Getty Images)

Estate planning is about protecting your loved ones, preserving your values and ensuring your legacy lives on.

Yet over 50% of Americans still don’t have an estate plan in place. That’s where financial guidance can make all the difference.

Getting the documents in place is an important step, but it’s not the finish line. Legal documents alone don’t guarantee that your estate plan reflects your full intentions.

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Estate attorneys are experts in the legal process, but they often work from a snapshot in time, without the context of your broader financial picture.

The Kiplinger Building Wealth program handpicks financial advisers and business owners from around the world to share retirement, estate planning and tax strategies to preserve and grow your wealth. These experts, who never pay for inclusion on the site, include professional wealth managers, fiduciary financial planners, CPAs and lawyers. Most of them have certifications including CFP®, ChFC®, IAR, AIF®, CDFA® and more, and their stellar records can be checked through the SEC or FINRA.

As financial planners, we have a different vantage point. We walk with you through life’s transitions, understand your goals on a deeper level and help ensure your estate plan stays aligned with your values, family dynamics and long-term strategy.

Together with your attorney, we can make sure the technical and the personal work in harmony.

Essential documents

When many people think of an estate plan, they often think of the last will and testament, which spells out who will get your “stuff” when you’re not here.

However, estate plans are more than just doling out belongings. Here are a few documents to consider:

Last will and testament. This legal document directs how your assets should be distributed and names someone you trust to carry out those wishes. But it can also outline guardianship for minor children and other final instructions.

Wills must go through probate, a public court process that validates the document and oversees asset distribution.

Financial power of attorney. A power of attorney appoints someone to manage your financial affairs if you're ever unable to do so yourself. This ensures bills are paid, accounts are managed and decisions are made in your best interest.

Health care power of attorney. Designates someone to make medical decisions on your behalf if you’re unable to communicate your wishes. This helps your loved ones act confidently and in alignment with your desires.

Trust. Not everyone will need a trust, but it can be a powerful legal tool for those with more detailed wishes. It allows you to control how and when your assets are distributed, during your life and after.

A trust can help avoid probate, maintain privacy, offer clarity in complex family or financial situations, and even provide asset protection after your passing.

Beneficiary designations. These are instructions tied directly to accounts like IRAs, 401ks and life insurance policies. They override your will or trust, so it's critical they’re kept up to date and coordinated with your overall estate plan.

Avoid common mistakes in estate planning

Having the right documents is important, but an effective estate plan goes beyond forms. It must reflect your family dynamics, financial circumstances and intentions, and it needs to stay current as life evolves.

Too often, we see plans that look complete on paper but fall short in real life. For example, families may intend to divide assets equally between two children. But if one child earns significantly less than the other, an even split could result in unequal outcomes after taxes.

A financial planner is trained to notice these nuances, something a legal document alone won’t address.

Another common oversight? Outdated beneficiary designations. We’ve seen clients with 401(k)s that still list ex-spouses as beneficiaries. In that case, those assets would pass to the ex-spouse, regardless of what the will or trust says.

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Too often, small details fall through the cracks. Estate plans can span hundreds of pages, and it’s not uncommon for people to receive documents they don’t fully understand.

They may believe their wishes are clearly outlined, only for relatives to learn later that the documents say something else entirely.

The days following a loss are already difficult; sorting through confusion shouldn’t be part of that experience. Estate planning isn’t something to rush through, and it’s certainly not a one-and-done task.

Your plan should be reviewed at least every 10 years, or sooner if life changes, so it continues to reflect your goals and protect the people you love.

While financial planners aren’t estate attorneys, we offer a different and highly valuable perspective. Attorneys ensure legal accuracy, but we help make sure your documents align with your real-life goals. We stay connected through the seasons of your life, helping you adapt and adjust as needed.

Whether you’re building your estate plan from scratch or reviewing what you already have, a financial planner can help simplify the process and ensure it reflects your full life, not just your assets.

Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Jennifer Lahaie is co-owner and co-founder, with her husband Eric Lahaie, of JEHM Wealth & Retirement. Jennifer is a Retirement Income Certified Professional (RICP®), Certified Annuity Specialist (CAS®) and Certified Tax Specialist (CTS™). She is an alumna of the American College of Financial Services and a member of the Institute of Business & Finance.