Trending
Written by: Michele Holmes | EncorEstate Plans
If Dante Alighieri wrote The Divine Comedy today, he’d certainly add probate as the Tenth Circle of Hell: it’s a costly, drawn-out, and complex ordeal that varies significantly across states. For savvy advisors, understanding these differences isn’t just academic; it can shape how they counsel clients to avoid probate’s pitfalls.
Take California, for example. Probate here can mean a grueling 12-18 month process (sometimes longer due to backlogs, such as those in Orange County), where every asset the client has, from their stamp collection to retirement accounts, becomes subject to public court review. Alongside prolonged timelines come significant fees — attorney costs, executor compensation, and court probate fees — that can quickly eat into the estate. The asset-protection implications can be profound for clients who assume ‘it will all just go to family.’ Multi-million-dollar estates can be whittled down by taxes and court costs, potentially leaving heirs with far less than clients intended.
Other states paint varied pictures. While some offer streamlined or small-estate procedures that reduce time and cost, others still enforce traditional, judicially intensive probate processes. Pennsylvania requires notice to creditors in succession cases; Florida uses ancillary probate for out-of-state property. In Texas, a valid transfer-on-death deed bypasses probate. Knowing these nuances equips advisors to tailor estate plans to clients’ residency or asset location, proactively managing exposure to the consequences of probate. For child-free, childless, and dual-income, no kids (DINK) clients, these differences often determine where assets go, with preferred charities, siblings, or the state as the default.
Advisors know that comprehensive estate planning transcends net worth or family structure. It is critical to safeguard client legacies and minimize probate exposure. Ensuring clients have an estate plan in place is a strategic tool advisors can leverage to advance client control and optimize legacy outcomes. A well-crafted estate plan gives clients the last word on everything that’s important, from naming the guardians of pets to specifying favorite charities as the primary beneficiary of all assets. Without an estate plan, clients default to intestacy statutes, which vary drastically across jurisdictions and often contradict their wishes.
Get the Last Word on Everything That’s Important
For financial advisors who are working with their clients to help them articulate, document, formalize, and fund their estate plans, these are important conversations. Estate planning is actually much simpler than most people think, especially for child-free and childless people, including many DINK clients, whose choices are often more flexible than they realize.
Your clients can consider their estate plan done when they have the answers to these five questions:
1. Who gets their assets when they pass away? (Who are the beneficiaries? e.g., charities, siblings, nieces and nephews)
2. How will their beneficiaries get their assets? (Method of distribution)
3. Who will make financial decisions for them when they’re not able to? (Successor Trustee/Executor/Financial Power of Attorney)
4. Who will make health care decisions for them when they're not able to? (Health Care Agent/Power of Attorney)
5. Who will have legal custody of their pets should they pass away? (Guardian(s))
Once you, as their financial advisor, have these answers, your next step is to ensure that their estate plan is officially signed and notarized, along with all the necessary witnesses.
Estate Planning is a Team Sport
A financial advisor recently asked for guidance on how to convey the importance of having an estate plan to her new dual-income, no kids clients (they kept insisting they didn’t need one). We suggested starting small. She said to her clients, ‘Estate planning is a team sport: you need trusted people in your life to help you manage your finances and medical care in case you’re incapacitated or deceased.’ That simple framing allowed the advisor to facilitate the creation of “powers documents” (e.g., power of attorney, advanced health care directive, and HIPAA release) for their clients while opening the broader conversation of getting their living trust in place.
The Bottom Line
Estate planning is about control and is important for anyone who has assets to protect. Although many people think estate planning is only for families with children, it’s even more important to plan ahead if they don't have children. Advisors can help their child-free and childless clients plan ahead with proper estate and tax planning and considerations. For these households without an estate plan in place, their assets will go through probate and be decided by state law and a judge. This could mean that their assets, most valuable possessions, and beloved pets will end up in the hands of that sibling they haven't spoken to in years (or worse).
That takes time and money out of their assets, potentially leaving their family, friends, and charity beneficiaries with little to no assets that could have been received. A good estate plan allows your clients to make decisions about what they want to happen to their assets and gives them control over their wishes and legacy. And, the silver lining is that you, as their trusted advisor, remain in the primary counselor seat throughout the entire process, thus creating more meaningful conversations and a deeper relationship that could result in additional share-of-wallet and referrals from an especially happy client who appreciates this added benefit of working together.
Related: Why Financial Advisors Should Embrace AI Workflow Automation in Their Practice