In this article, you'll learn the difference between an estate planner and a financial planner, as well as how the two professions work together.

What does an estate planner do?

An estate planner creates a financial plan for their client, usually after the birth of a child or when assets have accumulated. Estate planners help with drafting wills, naming guardians and conservators, investment selection, asset allocation, passing down assets to heirs, and minimizing unnecessary taxes. They do all this while considering an individual's unique background and circumstances.

Is a financial advisor better than a planner?

A financial advisor is a term that can be applied to anyone who helps you manage your money. On the other hand, a financial planner is a consultative professional who meets with clients to discuss strategies to help them reach their financial goals, which can include accumulating assets, asset protection, and retirement income planning. There are some factors to consider when choosing between a financial advisor or financial planner.

First,  consider the amount of time that they have been in business and their level of expertise. The longer they have been in business, the more likely they are to have financial planning experience and be better equipped to identify what kind of assistance you need. It is also important to consider their educational background and academic achievements in the professional field of finance. 

Which is better suited for your needs will depend on what you are looking for. If you are looking for a financial planning service where you will meet with someone to chart a course towards your financial goals, a planner may be a better option. If you are more interested in product selection or talking about investments, then your best bet is an advisor.

What is financial and estate planning?

The world of taxes is a complicated one. If you don't know what you are doing, it can be very easy to make mistakes and pay more than what you should in taxes. In addition to this fact, as people approach retirement,  retirement planning becomes necessary to determine a retirement income strategy.  While many of us may know a thing or two about taxes and investing, we may not know everything we need to plan for our future. This is why it may be beneficial to speak with a professional who can help organize your financial future and develop a comprehensive financial plan that will cover things from an estate perspective, as well as from a retirement and tax perspective.

Do financial advisors help with estate planning?

This is a question that often arises when the topic of financial advisors comes up. The simple answer is yes, but it can be trickier than just hiring somebody to help you prepare your estate planning documents. Most people who are looking for an estate planner will interview at least two or three attorneys before they make any decisions about which one they want to hire. They will want to know how much experience the attorney has and if they specialize in any specific circumstances that pertain to the client, such as planning for a special needs child.

Do I need to include estate planning in my personal financial planning?

In general, it's advised to include estate planning in your financial planning. Estate planning is essential even if you don't have wealth or children in order to determine your healthcare directives, powers of attorney, figure out how to reduce estate debts so your spouse isn’t saddled with debt at your passing, and to reduce probate costs and other unnecessary fees.  Basic estate plans can be created for a few hundred dollars and are well worth the cost.

If you have children or want to make sure your wishes are carried out in regards to the distribution of your assets, it is important to plan accordingly.

Should I get a financial advisor or planner?

Financial planning is the process of choosing a course of action based on goals, time frame, risk tolerance, and ability to take risks. Financial planning helps you devise a plan for how much money you need to save for retirement and college expenses. On the other hand, a financial advisor is a general term that can be applied to anyone who helps you manage your money.

Do financial advisors do estate planning?

While financial advisors can help with estate planning, they can’t do it alone. You would need to also work with a lawyer regarding many estate planning needs. An estate planning attorney is necessary to prepare legal documents and assisting with the financial aspects of setting up trusts and wills for you and your heirs. Most financial advisors can work together with your estate planning attorney as a team to ensure that your estate plan is executed according to their privacy policy.

Can a financial planner prepare a will?

Only an estate planning attorney can create your estate planning documents. The attorney will ensure the will is worded correctly, is legally binding, and will ensure that your wishes for your loved ones are well-documented. An estate planning attorney or financial planner can also advise you on ways to provide for your heirs outside of probate. For example, many people own life insurance, a non-probate asset, and a life insurance policy will go to the named beneficiary upon death.

Contact us at The American College of Financial Services if you have more questions regarding your financial future and visit YourAdvisorGuide.com to find an advisor who fits your financial planning needs.