Back to All Articles

The Role of a Financial Advisor in Estate Planning

June 8, 2023
2 min read
Woman speaking to a financial advisor about her estate plan.

Turn to a professional to set up saving strategies with your beneficiaries in mind

Financial advisors or planners aren’t the pros you turn to when you need to create a Will or Trust, but they still play a key role in getting your estate plan in order. While their primary, simplified purpose is to help you accumulate wealth, they’re a key partner for all sorts of financial decision-making.

They are your partner in setting and reaching your financial goals—such as saving for kids’ college tuition, paying down a mortgage, taking a trip to France, or having enough funds to retire comfortably. They’ll provide options and insights on investments, retirement savings plans, life insurance, and other ways to manage and grow your estate.

But the real value of a financial planner to your estate plan is in advising you on how your savings strategies should be set up, at least in part, based on how you want the financial assets of your estate to be disbursed when you die. You can use various types of financial accounts in ways that minimize taxes and make sense for how and what you’d like to share with beneficiaries.

Many of these decisions hinge on how different types of accounts are taxed. For example, a financial planner can help put together a gifting strategy that makes the best use of different kinds of investments. If you want to leave some of your estate to your children and some to your favorite charities, it might make the most sense to leave tax-deferred accounts, like 401(k) or pension plans, to charities—since they don’t pay taxes—and to leave taxable or tax-free accounts, including Roth IRAs, mutual funds, or stocks, to your beneficiaries.

Although planning what parts of your estate to pass on is important, it’s important to remember this: You can’t take it with you. A financial planner who is invested in your goals also will help you create responsible spending strategies. After all, the money you’ve worked so hard to earn and save should be used to help you do the things you enjoy with your friends and loved ones while you’re still alive.

Related articles