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How Wealth Management and Estate Planning Work Together


Wealth management focuses on growing and preserving assets through investment strategies, tax planning and risk management. Estate planning, on the other hand, ensures that your wealth is distributed according to your wishes after your passing, while also minimizing taxes and legal complications for your heirs. Combining wealth management and estate planning can also provide you with the peace of mind of knowing that your financial goals are aligned with the legacy you want to leave.

If you’re thinking of combining your wealth management and estate planning needs, you may want to consider reaching out to a financial advisor to help with the process.

Benefits of an Estate Planning Wealth Management Strategy

Combining wealth management and estate planning strategies can offer you a comprehensive approach to growing and preserving your assets. This integrated strategy provides personalized investment management, tax-efficient planning and risk management personalized for your individual goals. Additionally, it can facilitate a smooth transfer of wealth to future generations, as well as minimize legal complications and potential tax liabilities. Let’s take a closer look at four general benefits:

Optimized Asset Growth and Protection

Using estate planning as a wealth management strategy can take a holistic approach to managing your finances. It can help you optimize asset growth and structure asset distribution to minimize taxes, manage risks and preserve wealth efficiently so that you can transfer it to beneficiaries. One way to do this is by establishing a tax-efficient trust. This strategy can reduce the tax burden on an estate, allowing more assets to remain invested and grow over time, rather than being lost to taxes.

Efficient Wealth Transfer

Another one of the primary benefits is the ease with which it can transfer your wealth. Estate planning involves the creation of wills, trusts and other legal instruments that dictate how assets are distributed upon your passing. When these documents are drawn in tandem with your wealth management plan, it can help you make a smooth transition of assets as well as minimize any potential disputes among heirs.

Tax Advantages

Integrating these strategies can also lead to significant tax benefits. Effective estate planning includes strategies to minimize estate and inheritance taxes, such as gifting strategies, charitable donations and the use of tax-advantaged accounts. Another common strategy includes creating an irrevocable trust to remove assets from your taxable estate, thereby reducing estate taxes and allowing assets to grow tax-free.

Continuous Financial Guidance

Combining both wealth management and estate planning strategies can help you get continuous financial advice to guide you through changing personal circumstances, market conditions and legal requirements. For example, taking this integrated approach with a financial advisor, can help you allocate savings between retirement accounts and growth investments, while simultaneously drafting a will and establishing a healthcare directive, so that you can address both short-term financial goals and long-term legacy planning.

Bottom Line

A couple meeting with their financial advisor to review their wealth management strategy.

Taking this integrated approach can offer you many benefits, from optimizing asset growth and protection to significant tax advantages, as well as transferring wealth efficiently to beneficiaries. Make sure you consider your financial goals, risk tolerance, tax implications, legal requirements and the long-term needs of you and your beneficiaries.

Estate Planning Tips

  • A financial advisor can help you make the most of an estate plan. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • While it may be tempting to save some money and do it yourself, making an estate plan is not easy — it requires numerous legal documents, including wills and trusts.

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