The Financial Advisor Usually Sees it First

After over two decades of practicing in the area of estate planning and probate, I’ve learned that the person who first realizes a client has an estate-planning problem is often not the estate-planning attorney.

It’s the financial advisor.

The attorney may see the client every five or ten years. The advisor may see the client several times a year and is often involved when the things that actually affect an estate plan begin to change.

A client mentions that she and her husband are separating, but no one has looked at the beneficiary designations on the retirement accounts and life insurance policies. A widowed client starts relying heavily on one adult child to help manage bills and investments, and the advisor begins to notice that the family dynamic has changed. A client sells a business, receives an inheritance, buys property in another state, remarries, has a child with problems managing money, or begins asking increasingly vague questions about accounts he has understood perfectly well for twenty years.

None of those conversations necessarily begin with, “I need to update my estate plan.”

In my experience, they usually don’t.  They begin as financial-planning conversations. And very often the advisor is rightfully sitting there thinking: This is bigger than an investment issue

That is the point at which estate planning belongs in the advisor-client conversation. Not because the advisor should become the trust lawyer. Some of the best advisors I know actually understand enough estate-planning law to play one on TV. They know what a defective beneficiary designation can do. They understand why a revocable trust that was never funded is a problem. They can spot when a client’s family circumstances, business interests, or account titling no longer line up with the plan.

But they also know where the line is.  And rather than crossing it, they do something far more valuable: they recognize the issue, explain to the client why it deserves attention, and get the estate-planning attorney involved.

In many ways, they are the heroes in the process.  Clients tell their financial advisors things they may not think to tell anyone else. They talk about the son who cannot manage money, the daughter whose marriage is in trouble, the new relationship they have not quite figured out how to discuss with the family, the business partner they no longer trust, or the parent who is beginning to slip cognitively. A seasoned advisor hears all of that, understands enough to know when the estate plan may no longer fit the client’s life, and encourages the client to revisit it before the problem becomes harder to solve.

The challenge is that clients frequently don’t recognize the legal issue themselves.  I have had clients come into my office with estate plans that were technically fine when they were signed but made very little sense in light of what had happened since. The children who were named as fiduciaries fifteen years earlier were no longer the obvious choices. A beneficiary who was supposed to receive assets outright had developed creditor, addiction, or marital problems. An old power of attorney named someone the client barely spoke to anymore. The client had moved to Texas but was still carrying around documents prepared decades earlier in another state. A business that had once been a relatively small asset had become the most valuable asset in the estate, yet there was no meaningful succession plan.

By the time those inconsistencies reach an estate lawyer’s desk after a death or incapacity, the options are considerably more limited.  Financial advisors tend to understand this better than almost anyone because they are often the ones who see the pieces that do not fit. They know which accounts are titled incorrectly. They know which beneficiary designation has not been touched in twelve years. They know when the client keeps putting off the attorney appointment. They know when the family story has changed even though the estate documents have not.

And they are often left in an uncomfortable position: they see the risk, they know it matters, but they do not want to practice law.  And they shouldn’t.  Just like lawyers shouldn’t advise clients on how to invest their money.

But there is a very large space between giving legal advice and saying nothing at all.

An advisor can help a client understand that a change in the client’s financial life, family life, health, residence, or business may have estate-planning consequences. The advisor can ask when the estate plan was last reviewed. The advisor can point out that a beneficiary designation deserves another look. The advisor can tell the client, “This is something I think you should discuss with your estate-planning attorney.”

That may sound simple. It is also enormously valuable.  Some of the most preventable estate-planning problems I have seen were not caused by bad documents. They were caused by good documents that sat untouched while the client’s life changed around them.  And financial advisors are often the professionals in the best position to notice that change first.

That is why I believe estate planning belongs in the advisor-client conversation.  Not because advisors should practice law. Not because every client conversation needs to become an estate-planning seminar. But because the advisor is often the person with the clearest view of the client’s financial life, the longest-running relationship, and the best chance of recognizing when the plan no longer matches the person.

Sometimes the most valuable thing an advisor can do is not solve the problem.  It is to recognize it early enough that it can still be solved.  The great advisors do just that.