To help a client plan to pass on his or her estate is one of the areas of financial planning that may be considered dull at best and morbid at worst. How can you turn estate planning into something pleasant or possibly even exciting?

The answer is to go beyond estate planning and help clients create a legacy plan. A legacy plan will help them pass down their values, lessons, life stories, contributions, records, and final instructions, to the people and organizations that are important to them. You are uniquely positioned to help clients with all aspects of a legacy plan. If you don't do it, who will?

This article will discuss the three parts of a legacy plan—the estate or financial segment, the personal or family portion and the contribution or charitable piece. Let's begin with the estate or financial section.

Basic estate planning is included in the six areas of financial planning because it is the financial part of a comprehensive legacy plan. The first step in basic estate planning is choosing your team as needed. Team members may include accountants, attorneys, insurance professionals, trust officers, planned giving specialists, videographers, and of course, you as the financial advisor.

The next step is to gather relevant data from the client such as goals, beneficiaries, assets and liabilities, and any other desired heirs. After you gather the data, analyze it by pretending the client's death occurred yesterday. What would happen to his estate, business or family? What if the client dies in 10 or 20 years?

You and your team analyze the data and prepare recommendations for your client. You then meet with the client, present the team's recommendations and begin implementation of the client's choices. Finally, you schedule periodic review meetings to keep the plan up to date.

Next, let's discuss moving beyond basic financial estate planning into helping the client design and create the personal legacy he or she wishes to leave his or her family.

When you remember your loved ones who have passed away, you remember much more than the financial aspects. These personal memories are much more valuable and are a treasure that goes far beyond money. People have been leaving legacies since the dawn of time. Now in the digital age, there are tools commercially available for you to help the client. Yes, the client could purchase the tools on their own, just like they can buy an investment or anything else on their own. Your job as always is to educate the client on the choices available and then help them follow through.

One of the tools available to help organize a client's life stories, values and lessons they want to pass on is an ethical will. Ethical wills are not legal documents. Instead, an ethical will is designed to pass ethical values from one generation to the next. Tools for passing on values and memories include scrapbooks, videotapes, and special legacy planning guides designed specifically for this purpose.

Commercial videotaping companies are available for the express purpose of helping clients archive their lives and memories on video. One advisor I know actually charges tens of thousands of dollars in fees for helping clients with the legacy videotaping process.

How a client chooses to preserve and pass on treasured stories, pictures, values and memories can be in the form of a book, a video, or even online websites designed for this purpose. This is a choice you can help the client make.

Next, you will also need to help clients organize their records and final instructions. Where are their tax records, how should pets be cared for, where are the real estate records, any computer or account passwords family members may need, etc.? There are commercial document planners available expressly for this purpose.

Your job is to help the client choose one and make sure they follow through and complete it.

How do you think the client's heirs and family members will feel when they have this wonderfully prepared record organizer, complete with final instructions and the personal legacy document organizer, online planner or video that you helped the client prepare in advance for this moment, which sadly one day we all have to face? My guess is they will be highly appreciative and more likely to want to continue a relationship with you themselves.

Now, let's discuss the third part of a legacy plan, which is contribution.

Have you ever noticed that a lot of hospitals have entire wings named after people? How about statues or parks in your community or places of worship? Do you think people donated money to make these things possible just for the financial or tax benefits? They most likely did it for many reasons, and not just for the financial incentives.

When you help clients create the contribution part of their legacy plan, you need to do the following with them and for them, including:

1) Designing the best planned giving techniques by evaluating the client's goals and objectives;

2) Discussing how charitable donations can enhance basic and advanced legacy planning;

3) Explaining how to minimize taxes and optimize income;

4) Creating a list of organizations the client would like to support and prioritize the list based on the client's criteria; and

5) Designing a gifting strategy.

Does the client want to begin a series of donations starting immediately or give a lump sum after they pass? Do they want to establish a trust and pass on earnings from the trust, while leaving principle in the trust for the future?

As an advisor, you may even look into designations in the specialization of planned giving if you feel it is necessary based on the complexity of your client's needs.

Finally, if you are moving beyond basic estate planning into comprehensive legacy planning, how do you get compensated for the added work? The most common way is to charge a fee. I would prepare a one-page presentation that clearly demonstrates the difference between basic estate planning and comprehensive legacy planning, along with the fee for each, and let the client choose. If you want a template for this presentation, I will send one if you email me.

By breaking down the three parts of a legacy plan for your client, you are uniquely positioned to help him or her, while creating competitive advantage for your practice. All of us must face the inevitable event of our passing. If you don't help your client prepare, who will?


Todd Colbeck is principal and founder of the
Colbeck Coaching Group, a subsidiary of General Business Center, Inc.
You can reach him at this email address.


Register or login for access to this item and much more

All On Wall Street content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access