As we begin a new year, there are several important needs your clients have related to estate planning that remain constant, regardless of the new year and the new laws. Often new clients come to me and say “I have been meaning to do this,” or “we’ve put this off for far too long.” Like other New Year’s Resolutions, clients start out the year strong, but then the pressures of life push those resolutions down the list.

1) Your Clients Need a Complete Plan

As a trusted advisor, one of your duties is to help your clients create goals, maintain focus on those goals and create a plan to accomplish those goals in a set timeframe. Whether your client wants to retire in ten years, or buy a vacation home next month, the goal of completing the estate plan is vital to the overall financial picture for each of your clients.

A full estate plan includes the transfer document, as well as what have been dubbed the “ancillary” documents. Each of these documents serves a valuable purpose. The transfer document may be a Last Will and Testament or a Revocable Living Trust. The ancillary documents are: Financial Power of Attorney, Health Care Power of Attorney and Living Will.

2) Your Clients Need To Be Prepared For Themselves

As tax laws continue to change in favor of the individual taxpayer, as in the current environment, the need for complex, tax-driven transfer documents is less common. In years when the estate tax exemption is low, the transfer document tends to lead the conversation and the powers of attorney are purely ancillary, or supportive, of that transfer document. As the estate tax exemption increases, the drive for estate planning tends to drop, because clients are less worried about the risk of losing assets to the estate tax, without realizing that minimizing the estate tax burden is only one purpose of a full and complete estate plan. Whether the current tax laws are beneficial or burdensome to the individual taxpayer, the ancillary documents maintain a place of importance.

The continuing need for the ancillary documents can be summarized in this way: drunk drivers and heart attacks do not check a victim’s financial status or tax bracket before striking.

The many horrible things that can happen to a client in his or her day-to-day life are not contingent upon the wealth accumulated by the client, or upon the size of the client’s estate. Financial powers of attorney, health care powers of attorney and living wills name those people your clients trust most to make financial and medical decisions. These documents also govern the responsibilities and obligations owed to your client when he or she is not able to make those decisions any longer.

3) Your Clients Need to Plan for Aging Parents

I predict that, under the new tax structure, the transfer documents will play a lesser role in getting clients to engage in conversation with their trusted advisors than in previous years. What will drive the conversation for many clients will be the realization of the vast considerations that come with the responsibility of caring for an aging parent. As the population continues to age, and parents live longer, I foresee powers of attorney documents for aging parents as being a higher priority for adult children than even their own Wills.

Frequently I receive phone calls from adult children asking to help them “get mom’s/dad’s power of attorney.” Usually this call comes after the parent has started showing signs of dementia or Alzheimer’s. The powers granted in the powers of attorney documents are the parents’ powers to give away; they are not the child’s power to take. Because of that, the parent must be the one to decide whether or not he or she will execute powers of attorney in favor of the adult child. This can be frustrating, or even a legal impossibility, depending on how advanced the decline in health has become.

As trusted advisors, we have a responsibility to our clients to inform them of the importance of these ancillary documents, for our clients themselves, but also to empower them to take action at the appropriate time with their own parents. When clients approach the trusted advisor about obtaining their parents’ power of attorney, the advisor has the opportunity to address the core concerns, evaluate the environment surrounding those needs, and guide the client in the appropriate direction to get the right type of counsel for the circumstances.


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