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How to Start Estate Planning as a Financial Advisor: Complete Guide, Tips, and Examples from 13+ Financial Advisors (September 2024)

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Reviewed by: Katie Noles, CEP

In this article:

Do Financial Advisors Handle Estate Planning?

Key Benefits of Adding Estate Planning to Your Firm

How To Start an Estate Planning Practice Without Practicing Law

When To Use Estate Planning Software

What Tools Do You Need for Estate Planning?

Encore Can Help With Your Estate Planning Practice

Do Financial Advisors Handle Estate Planning?

Yes, they do, especially since financial professionals look at legal documents all day.

It’s a common misconception that only attorneys can help clients prepare their estate plans. Advisors often leave money on the table by referring clients to local attorneys for estate planning.

The difference between you and an attorney is that you are not drafting the documents or telling the client what plan type they need (that's what Encore and its resources are for).

Financial advisors are needed for estate planning now more than ever thanks to the estate attorney shortage.

According to a recent Business Insider article, estate attorneys are burning out and retiring in droves thanks to estate planning demand skyrocketing during COVID[*].

Related: 3 Steps to Avoid Unauthorized Practice of Law + Examples

 

Key Benefits of Adding Estate Planning to Your Firm

  • Clients need an estate plan!
    • Once they know what plan type they want to proceed with, most clients complete their responses within an hour (30 to 45 min if you're using a tool like Encore + have a process in place).
  • Ensures clients’ hard-earned assets aren't squandered on fees or tied up in probate.
    • “If you don’t have a plan," says Robin Darden from the Encore Operations Team, "then the state will have a plan.”
  • You're irreplaceable in clients’ eyes, especially if you’re able to become a one-stop shop for all things financial planning.
    • You become “more sticky” and trusted in clients’ eyes according to Scott Leonard of Navigoe, Adam Sommers of Sommers Financial Management, and David Littlejohn of Littlejohn Financial Services.
  • Brings in more assets (and information) under management.
    • Estate planning can become the lead-in to a long-term financial planning engagement with future clients.

 

How To Start an Estate Planning Practice Without Practicing Law

You’re already at the center of your clients’ finances, so why not bring all of it together into a revocable living trust that you help them create and fund?

According to 13 advisors we’ve interviewed, here are the easiest and most painless ways to start up your estate planning practice:

Step 1A: Consult Your Compliance Team First

According to Eric Negron of ForeFront Wealth Partners, you should “consult your compliance team first” (unless you like wearing orange jumpsuits and white slip-ons everyday).

Negron also recommends having estate planning built into your disclosure documents with both the SEC and the states your clients are in. “It’s super simple language," he says. "It’s not hard to put this [disclosure] language in there.”

 

Step 1B: Look at Where Else You Can Expand Your Services

In clients’ eyes, estate planning is an expansion of your services and capabilities they’re already enjoying.

Even the act of considering adding estate planning is a good forcing function to stop and think about how to improve and diversify your offerings and services.

You could also think about client segments that are under-served, like Amy Irvine of Rooted Planning Group (who serves busy women and their families) or Daniel Kopp of Wise Stewardship Financial Planning (who serves young widows and widowers, and service members and their families).

PRO TIP: Ask your clients for ideas and suggestions on how you can better serve them.

 
Step 2: Own the Estate Planning Process (Stop Referring It Out)

You’re already adding tons of value to your clients (it’s why they keep coming back). But when it comes to estate planning, clients would rather cheesegrate their face than get their documents drafted.

And why continue pursuing a one-sided relationship with an estate attorney whom you refer clients to, only to never hear back from either of them about the estate plan or next steps? Any local attorney worth their salt would send your clients back to you to complete the funding.

If you already have the core pieces in place, why leave all of this up to chance?

After referring this line of business out for about 11 years (and leaving money on the table), Tushar Kumar of Twin Peaks Advisors decided to own the estate planning process from start to finish:

“For the better part of 11 years of my career, I was constantly referring that business to someone else and not being able to own that process. More often than not, [the estate plans] didn't get to the finish line.”

“I wanted to have greater control over a very basic process. In our first year, we did 54 plans: just getting very basic trusts set up [with] mostly clients that we had we had already been in business with for over a decade.”

PRO TIP: The best way to create your process for estate planning is to ask other advisors how they did it.

Related: Advisors Share Their Estate Planning Tips and Practices

 

Step 3: Figure Out Your Service Model, then Operational Execution

Your estate planning service model probably won’t be too different from the rest of your planning offerings.

Here are a few things to consider as part of your service model:

  • Will you hire staff (e.g., estate planner, attorney) or adopt software to handle estate planning?
    • If hiring staff: account for candidate search + hiring time, in addition to ramp up time.
    • If adopting a tool: account for learning curve + staff training time.
  • Do you have checklists and follow-up processes for each phase of the estate planning process, especially for post-document creation and funding?
  • Do you have client-facing resources like templatized answers and FAQs that you can send clients quickly?
If you need some checklists to get started, Encore has resources for implementing estate planning Into your practice.

Related: How to Provide General Legal Information to Your Clients

 

Step 4: Leverage Estate Planning Software

With your drive to create an estate planning practice in full effect, consider your team’s capacity to execute your vision.

Unless their firms are over capacity, many advisors leverage software like Encore to help them fulfill their clients’ estate planning needs. They get up and running quickly with less than 30 minutes of required training.

Another route firms pursue is hiring a dedicated estate planner or estate attorney to handle this new line of business. Firms looking to further grow their firms tend to hire a planner or attorney who has an existing book of business, but eventually adopt tools to help them streamline their estate planning process.

When to Use Estate Planning Software

Financial advisors typically consider adopting software to:

  • Streamline their team’s estate planning workflows.
  • Gain access to expert guidance. (not all software provides this)
  • Help most clients fulfill their need to complete a straightforward plan.
  • Extend their firm’s capabilities in servicing clients.
  • Templatize estate planning documents and provide parts of the overall template for different clients’ needs (like an attorney does).

When it comes to evaluating tools, consider using Eric Negron's evaluation criteria:

“I chose Encore for a couple of reasons. First and foremost, it had nothing to do with technology.

It had to do with culture. For us, it was:

- Who are the people that are leading the organization?
- What sort of character, what sort of heart do they have?
- What are their core values?
- What are they about?"

David Littlejohn of Littlejohn Financial Services also echoes Negron’s sentiment:

“I was surprised how easy you guys made it. There's such a great knowledge base where you can go in and customer service at Encore is fantastic. I drop a text in and I get answers very quickly.”

Related: Resources for Implementing Estate Planning Into Your Practice

 

Step 5: Nail Down Your Process

You could come up with a process that works for you.

Or, you could adopt the following process from the advisors and estate planners below (who started their estate planning practices from scratch and have generously shared their internal processes).

 
1. Announce your estate planning capabilities to clients.

For current clients, explain how you’re now able to help them finalize their estate docs.

PRO TIP: Send an email to clients without estate planning docs with the subject line “We need you to update your client profile.” That subject line has been very effective in Katie Noles’s (of Advisors EP) experience.

Noles also recommends asking clients whose estate plan is complete, “May we see your current estate plan?” Doing so helps you check:

  • If the plan is outdated.
  • If the beneficiaries differ.
  • If the plan needs updates to reflect clients' current wishes.

You’ll fulfill your fiduciary duty by double-checking clients’ plans and ultimately help clients flag things that might be missing or incorrect.

For new clients, it’s a great way to show new clients how you and your firm work. They want to know the people behind the proverbial curtain.

Here are some great announcement examples from advisors on LinkedIn:

 
2. Explain how you charge for the work you do.

Explaining the price breakdowns helps a lot, especially when clients are comparison shopping.

For example, advisors like Joel Top of Plan Wiser Financial and Eric Bishoff of Bishoff Financial Group charge clients the same amount it costs to create a trust-based estate plan in Encore ($550).

 
3. Explain what your firm will do from start to finish.

Showing what’s under the proverbial hood goes a long way in clients’ eyes, especially with helping them demystify everything.

PRO TIP: Consider adding a money-back guarantee where you’ll refund the money if clients feel like they got no value from how your firm works + communicates the data. Bishoff has seen great success with this offer, especially for helping de-risk the engagement in clients’ eyes.

ANOTHER PRO TIP: Lead with estate planning to uncover wallet share, then bring in new assets under management over time as you strengthen your relationship with clients.

Both Eric Bishoff and Katie Noles recommend this approach, with Noles adding, “Onboarding estate plans first with clients allow you to do all [of the financial planning] at once since you already have all of your clients’ information. There’s no backtracking to correct beneficiary designations and account ownership, either.”

Eric Negron sums it up nicely:

"Money is love."

“When you do estate planning, you know who’s in the family, who’s important, who’s benefiting from financial assets, and who people love that they want to make sure are taken care of if something happens to them.”

 

Step 6: Drink Your Own Champagne aka Walk In Your Clients’ Shoes

Run through your entire estate planning process from start to finish to see what it’s really like for clients.

For example, before they fully rolled out Encore, all the advisors we interviewed for The Advisors' Guide to Estate Planning podcast created their own estate plans in Encore to get a feel for the document creation process.

Doing all of this helps you spot potential hiccups and blindspots in your estate planning delivery, and helps you find gaps in the pre-, during, and post-plan phases (e.g., # of follow-ups re: funding you should end after docs are notarized).

 

What Tools Do You Need for Estate Planning?

At the most basic level, you need:

  1. A way to make trusts and wills on-demand WITHOUT needing to pay a monthly subscription.
  2. A place to connect all your clients’ assets.
  3. A tool that has guided workflows and estate attorneys on staff who can answer all of your questions.
  4. Someone on your team to help clients execute funding instructions.

 

Encore Can Help With Your Estate Planning Practice

Encore can help when you’re building out your estate planning practice, but we can also augment your advisor tech stack.

We have attorney-quality estate documents at a fraction of the cost that you can use any time for clients, from trust-based estate plans to property deed recordings – it’s all pay as you go (no monthly or annual fees).