The Wealth Counselor
Don't Allow New Accounts to Catch Clients Unaware
As a financial advisor, what could be more important than the financial health of your clients? As you know, a comprehensive trust-centered estate plan allows your clients to provide for loved ones, affording them immense peace of mind. But, estate planning is not a one-time event since trust-centered estate plans require careful supervision and regular reviews to function properly. Accordingly, it’s crucial that you participate in the maintenance of your clients’ trusts by monitoring important financial changes and helping clients to update their plans to reflect these changes.
Significant Changes in Wealth
Setting your clients up for success with their trusts is not difficult. Keep an eye out for any significant changes in wealth. One such important development in a portfolio is the addition of a new account, such as an IRA or new taxable investment account. Any time a new account is opened, it’s imperative that you schedule a trust funding review. This review ensures that new accounts and any new sources of wealth are incorporated into the planning process. In some cases, a major overhaul is necessary, whereas in others it may only need to be notated on the trust’s schedule of assets. In any case, accounts must be funded properly into the trust if it is to work as intended, providing a sense of security and stability to generations to come. Any time you have helped a client open a new account, it is a good idea for us to have a discussion.
Other New Assets
You are often on the front lines for a client’s other acquisitions. Has the client withdrawn money to purchase a boat, RV, vacation home, new residence, or to start a business? Like a new investment account, each of these assets has unique ownership issues that must be considered as part of the client’s estate plan. Help your clients optimize their plans by looping us in when you are made aware of new assets.
Is it time for a trust funding review?
During a trust funding review, a comprehensive look is taken at the client’s plan. We take a 360-degree view of the trust’s terms and the client’s assets. A trust funding review is not a one-size-fits-all process. The scope and depth of a trust funding review will vary with the concerns of the client and the advisor. A basic review for a client with only a few changes may involve a phone call or brief meeting. On the other hand, a client with many changes (such as many new assets or a significant change in wealth) may be tantamount to the creation of a new plan since changes to the trust may be necessary.
In either case, the best case of action is to get started on the funding review. The impact of a client’s changes—like new accounts, new assets, or changes in wealth—may be substantial.
Be Prepared for Your Clients’ Benefit
New accounts opened by clients during the course of the past year along with any other new assets must be taken into consideration during a trust funding review. Make sure your clients know they can depend on you and on their full team of qualified, experienced estate planning professionals to optimize their financial and legal well-being. You can put their minds at ease by reaching out to us to coordinate any necessary reviews. We are here to help.
Office Location: 2655 First Street, Suite 250 | Simi Valley, CA 93065 | Phone: (805) 915-4760 | Fax: (866) 316-1170