How an estate planner differs from a financial planner

On Behalf of | Nov 12, 2021 | Estate Planning

Most residents of the Bay Area who are exploring the possibility of creating an estate plan soon run into financial planners who sell themselves as estate planning experts. Many estate planning experts also attempt to convince potential clients that they can be trusted with the financial aspects of an estate plan. Who is right? How can a lay person make a sensible and useful choice?

What does an estate planner do?

Most professionals who advertise themselves as “estate planners” are usually lawyers with many years of experience in drafting documents necessary to execute an estate plan. These documents include a will, one or more trust documents, conveyances that are necessary to transfer assets according to the wishes of the owner of the assets (the “testator”). An experienced estate planning attorney also takes pains to ensure that all documents necessary to transfer the testator’s property are drafted to comply with California state law.

What does a financial planner do?

Financial planners concern themselves principally with the financial aspects of the testator’s assets and the financial consequences of the overall estate plan. A financial planner can help a client formulate his or her goals for the future management of the client’s assets and for the ultimate transfer of those assets. Most financial planners are very knowledgeable about the income tax consequences of various estate planning decisions. A financial planner can evaluate the financial future of particular investments or financial products such as life insurance policies.

Overlap between the two

As can be seen there is much overlap between the roles of an estate planner and a financial planner. Occasionally, a person seeking assistance in formulating an estate plan will meet a professional with one or more professional specialties: an attorney who is a CPA, or a CPA who is a tax lawyer. Before retaining either type of professional, the client should meet with each personally and attempt to develop a genuine relationship with each professional. Generally, client satisfaction depends upon the nature of the relationship with each professional. Regardless of the specialty of an estate or financial planner, the success of the financial plan will depend upon the extent to which the planner examines every possible scenario and ensures that the estate plan will adequately address each of those scenarios. An interview with an experienced estate planning attorney is an excellent first step in creating an estate plan.