Estate planning for “A” clients – how to value add and get referrals

By Hans Egger | November 15, 2015 Estate planning

The kids have all finished school, the mortgage paid off, there’s plenty of money in the super fund and your client is either approaching retirement or already retired. As Financial Planners, over many years we have provided them financial guidance and they pay us well – these are the clients we love!

However – there are still a few hidden traps out there that could financially ruin a carefully planned and prepared retirement. To learn more about what these could be, register now for AstuteWheel’s free presentation seminars on Estate Planning tools for advisers.

Here are a few questions the Modern Adviser should be asking…

About Life Insurance

“How confident are you that your children have adequate insurance in place or will they be asking you for money if something goes wrong?” If the adult son, married with 2 children were to have a car accident and either die or become TPD does he have adequate insurance in place to provide for his family if his income suddenly stops?

Clients are usually shocked when I model the impact of $20k or $30k pa. from their retirement fund being used to support the surviving family for the next 20 years. Suddenly their perfect retirement is not looking so healthy. This provides a great opportunity for your client to encourage their children to engage with you for advice and for you to introduce this second generation to the benefits of financial advice.

» See AstuteWheel’s Insurance calculators.

About Estate Planning

If you were unlucky enough to be on Malaysian Airways MH17 how would your wealth be distributed and would this be ideal?”

Usually these clients have simple Wills implemented when the children were born that covers them adequately if either passes away, but what happens if they both pass away? Let’s say they have $3m in assets and 3 children, each child receives $1m:

Child 1 (Charlie) – is 20 years of age and in his first year of university. Having received $1m do you think he will have the motivation to complete his studies or would he be tempted to start spending that money only to find it all gone by age 30 and no degree and no career to fall back on?

Child 2 (Libby) – is 23 years of age and has finished university, she’s started her career and is the sensible one in the family, she has recently moved in with her boyfriend and if it all works out they will probably get married in a few years’ time.

But what if it doesn’t work out? Do they understand that the de-facto boyfriend may be entitled to half Libby’s inheritance?

Child 3 (Brian) – is 27 years of age and is the entrepreneur of the family, his first business didn’t end well but that was due mainly to the global financial crisis and in any case he learned a lot from his mistakes. His new business is on a much bigger scale and all going well should break even soon. But what if it doesn’t, do they understand that any creditors can access his inheritance to pay for that 5 year property & equipment lease and any other costs in winding up the business.

For the sake of a few thousand dollars these clients could protect their children from these potential outcomes by implementing a Testamentary Trust. As part of the process, it would also be beneficial to also implement Powers of Attorney for financial issues and Powers of Guardianship for medical issues and identify any other concerns.

New estate planning software provides the modern adviser with a simple but thorough process to guide your pre-retirees and retirees through a comprehensive estate plan discussion. The briefing notes generated by the system are taken to a lawyer to ensure that adequate estate documents are implemented.

By just posing a few simple scenarios, and providing a solution to the financial security and long term benefit of the wider family unit, you’ve once again added value to this important client, you can charge for the advice and open the door for referrals from their children and their friends.


Hans Egger  is Co-founder and managing director of AstuteWheel Financial Planning Software and Estate Planning Software and admin of The Modern Adviser