Why an Estate Plan is NOT a Financial Plan

May 30, 2017

For the average person, understanding estate planning law or financial planning in intricate detail just isn’t necessary. Many people trust your estate planning attorney or financial planner to take care of what’s necessary and give you the important details to make the most critical decisions. But others may not work with both an estate planning attorney or financial planner, or may not understand the specific roles and decisions of each individual, and how they fit into your long-term plans and security.

You may have created a financial plan to retirement with your financial advisor. Or perhaps you have created an estate plan with your estate planning attorney. Congratulations on taking important steps toward protecting your future! But while you may have completed one of those documents, unless you’ve met with two distinct professionals, you likely haven’t completed the other one.

Following is a high-level breakdown of why an estate plan is not a financial plan (and what elements go hand in hand):

• Their definitions are distinctly different. In the literal sense, financial planning focuses on the accumulation and preservation of wealth. They help you organize your financial life so that you can accomplish your short- and long-term financial goals.
• Accumulation and management of wealth falls under one specific umbrella. Estate planning typically focuses not on the accumulation of wealth, but on the protection and distribution of your assets (later in life and upon your passing). While your estate planning attorney should have a solid understanding of the accounts and elements of your financial portfolio, it is not within his or her responsibilities to manage that portfolio — that falls to your financial planner.
• Both professionals should work together. The work of your financial planner (in other words, your portfolio) is important to share with your estate planning attorney, so that your attorney can help you best protect your wishes regarding your finances. Your financial plan will likely include your current beneficiaries, your financial goals, income and expenses, and current investment — important information your estate planning attorney will need to know.
• Both documents should constantly be evolving. It’s important to know that both your estate plan and your financial plan are not ‘set it and forget it,’ but are fluid processes and documents that you should update and review regularly with your estate planning attorney and financial planner.

Whether it’s for your estate plan or your financial plan, choosing the right partner is key. Here at Restaino Reddien, LLP, we’re here to help. Call ust at 235-5885 to schedule your free consultation.

 



Related Topics: Estate Planning

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