Do All of Your Clients Have an Estate Plan? They Probably Should.

Holly Geerdes

Estate planning is best understood as a process and not a one-time event, and while wills and trusts are the most commonly used tools, there are many more fundamental documents that a skilled estate planning attorney can help put in place that will result in superior asset protection.

But financial advisors and their clients must also be cautious about the estate planning process, as not all attorneys who offer support services in this area have the same amount of experience or knowledge, and in some important ways, poorly executed estate planning can actually be inferior to no planning at all.

This is according to attorney Holly Geerdes, who has sought over the past two decades to establish herself as one of the nation’s premier trial and asset protection attorneys in the United States. As the founding attorney at the Estate Law Center, Geerdes has extensive management and leadership experience in coordinating statewide projects for professional legal development related to improving the caliber of attorneys, and she’s trained everyone from novice attorneys to veteran judges on legal practice and the law.

In a recent interview with ThinkAdvisor, summarized in Q&A format below, Geerdes explained some of the fundamentals of successful estate planning, beginning with the fact that estate planning is not just a tool for the wealthy or those with complex financials.

It’s a series of questions many individuals and couples have, Geerdes says: “Who needs an estate plan? And when do we need to start estate planning?”

“The answer is, at every stage of adult life,” Geerdes suggests. “And, estate planning is not just something wealthy or older people undertake. It is important for the middle class and everyone else who has concerns about how their wealth will be treated after their death.”

The newly legal adult about to leave for college, the single mother of two struggling to pay the rent, the middle-aged married couple, the retiree downsizing, the 80-year-old without close family ties and everyone in between all require an estate plan, Geerdes says. Given the potential complexity, starting estate planning as soon as possible will yield the best results.

According to Geerdes, some 40% of baby boomers, 64% of Gen Xers and 78% of millennials do not have a will, and the process becomes more difficult the longer one waits to engage in such planning. Ultimately, Geerdes says, the financial planning professionals should take pains to educate themselves and their clients about the importance of estate planning and asset protection.

THINKADVISOR: When it comes to estate planning and related issues, what are the biggest trends you are seeing so far in 2023?  

HOLLY GEERDES: That’s an interesting question. We specialize in setting up wills and trusts, but we also do higher-level asset protection and estate tax planning work. In that context, one big trend we are seeing today is that pre-retirees and retirees are very concerned about addressing long-term care costs.

They are concerned for good reason, I would say. As you know, if a person becomes disabled later in life, physically or mentally, and they require some form of constant long-term care, that fact can take a perfectly sound retirement income strategy and just blow it up. This is especially true when the person lacks long-term care insurance, as so many people do.

Financial planner professionals are likely aware of this issue, but like their clients, they often assume that planning for and addressing this risk is something that should be done when a person is, say, in their 60s or 70s. But to successfully plan for this risk, you have to start early, because it just gets so much more expensive to buy insurance and to put other controls in place the longer you wait.

Yes, long-term care is expensive, but that is especially true when we are talking about older people trying to source such coverage. Younger people can actually find some attractive rates, and there are some really interesting emerging products that link a long-term care rider to tax-advantaged life insurance.

Another clear trend is people rushing to get estate planning in place under the current  favorable tax framework, which is set to expire in 2026. They want their planning to be grandfathered in with the current rates, because the broad expectation is that the estate taxes will go up again in the near future.

So, does that mean more young people should be proactively shopping for long-term care insurance?

Yes, I think so. Many more young people should be looking at these policies and considering the role they can play in their long-term plan. As I mentioned, considering life insurance policies with a long-term care rider is a key part of the asset protection process I undertake for my clients.

From experience, I can tell you that many people are comfortable with the idea of having life insurance be a part of their retirement and legacy strategy, so why not link the long-term care coverage in there while you are younger and can afford an attractive rate? If something happens and you do become disabled, this can be a powerful way to bring forward the value of the death benefit.

What other common issues are you speaking about with your clients?