Estate Planning Financial Advisor - SmartAsset

An estate plan is a set of documents describing the way you want your assets to be distributed when you die or become incapacitated. Along with retirement planning, managing risk and investments, an estate plan is a basic part of a full financial plan. Financial advisors help clients prepare estate plans by working with them to clarify their objectives, showing them the processes to make them happen and working with other estate planning professionals, like attorneys. Estate planning financial advisors typically charge flat fees, and may also receive fees based on the percentage of assets you place under their management. The latter is especially common if they also manage your investment portfolio.

Consider working with a financial advisor who can help you address all of your estate, financial and retirement planning needs.

Estate Planning Services Through a Financial Advisor

One of a financial advisor’s first tasks is to help a client understand his or her objectives for estate planning. For the average individual contemplating estate planning for the first time, it’s not always clear which assets should be covered in a plan and how their distribution can be directed.

Advisors can help make sure important issues get addressed, including sensitive topics clients may be tempted to avoid. For instance, clients may require some prodding to think through whether they want their children or a charity to be financial beneficiaries of their estates. Similarly, solving knotty problems such as how to provide for step-children can benefit from a financial planner’s assistance.

Estate planning financial advisors work alongside attorneys who specialize in estate planning. Many estate planning financial advisors are attorneys themselves. Legal expertise is invaluable when drawing up the many legal documents that can be part of a complete estate plan. In addition to drafting wills, their crafting powers of attorney and setting up trusts. Attorneys can also help estate planning clients legally avoid probate and minimize estate taxes. During the probate process, an attorney can provide legal representation.

Costs Related to Estate Planning Financial Advisors

The basic document in an estate plan, a will, can be drawn up by an attorney for anywhere from a few hundred dollars if it is a simple estate. Attorneys can also help with other estate planning documents such as those creating trusts and assigning powers of attorney on a la carte basis for fees ranging up to, in the case of complex trusts, thousands of dollars each.

It’s often most economical to pay an estate planner a flat fee. A full financial plan including an estate plan can cost anywhere from $1,500 to $2,500. You can also hire an advisor to only draw up the estate plan portion, but this may be less cost-effective than bundling one into a full financial plan.

In either case, more costs are likely. For instance, the plan will likely need annual updating. The planner will charge an additional fee to do that. If the estate planner is not an attorney, one will have to be paid more draw up the necessary legal documents. For estate planners who are attorneys, a flat fee can be negotiated that covers necessary documents and any additional consultations.

Estate planners may instead charge by the hour. Attorneys typically bill $150 to $350 an hour. Advisors may charge from $100 to $400 on an hourly basis. Advisors often also charge a percentage of assets under management, specifically if they also manage your investments. This typically comes to about 1% of the assets the advisor is managing for you. For instance, if the advisor is managing $500,000, the annual fee would be $5,000.

Some advisors don’t charge flat fees or percentages of assets. They may be compensated entirely by commissions from sellers of financial products such as mutual funds, insurance policies and annuities. Still others get compensated from a mix of flat fees and percentages charged to clients, and commissions paid on sales of investment products.

How to Make the Most of an Estate Planning Financial Advisor’s Services

To benefit from an estate planning financial advisor’s services, educate yourself as much as possible before contacting potential matches. Gain some understanding of wills, beneficiaries, trusts, probate and estate taxes so you’ll know what applies to your situation, which questions to ask and how to interpret the answers you get.

You can usually get an initial consultation with an estate planner for free. At this meeting, discuss the services the planner will provide and their costs. Make sure the details are covered and get everything in writing.

You may consider working with an advisor who has specific estate planning credentials. One example is the certified estate planner (CEP), a credential offered by the National Institute of Certified Estate Planners. Holders of this credential get specialized training in estate planning, including setting up trusts, handling estate taxes and providing for disability.

Bottom Line

Estate planning financial advisors can be useful guides for people finding their way through the complex process of planning for the distribution of their assets after death or disability. They can help clarify objectives, select appropriate and draw up legal documents to see clients’ wishes are followed. Estate planner fees depend on the size and complexity of the estate, and can be flat, hourly, percentage-based or a combination.

Tips on Estate Planning

If you’re setting up an estate plan, consider working with a financial advisor who can help. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
As a comprehensive look at the challenges and opportunities of estate planning, SmartAsset’s estate planning guide is an invaluable resource. It includes, among other things, a state-by-state breakdown of estate taxes and inheritance laws.