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Why a holistic approach to estate planning is so important

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Angela Harry, Attwood Marshall Lawyers Partner and member of STEP (Society of Trust and Estate Practitioners) explains why financial advisors, accountants and estate planning lawyers should work together to give their clients better advice and why estate plans need to be looked at from all angles.

Introduction

There has been a significant shift in succession law over the years and what is involved in the estate planning. From the day when a simple Will was the main tool used to formulate an estate plan to establishing testamentary trusts, superannuation proceeds trusts, life estates, right through to succession planning for intergenerational wealth, the process of estate planning is more complex than ever before. This is because today’s estate planning process aligns with the complex nature of how families are comprised, how assets are structured, and the different dynamics that need to be catered for when doing an estate plan.

There are a number of reasons why the “simple estate plan” is a thing of the past, which is a combination of the fact there is a lot more wealth in today’s day and age, people hold that wealth in complicated structures, such as trusts and self-managed superannuation funds, and often have blended families which they need to consider.

Estate planning is so much more than a simple Will

In essence, an estate plan outlines what you want to happen with your assets after your death as well as direct who you want to make financial and health decisions on your behalf in the event of your inability to do so while you are still alive.

Estate planning is so much more than a Will. It not only includes the preparation of a Will but can also involve the inclusion of testamentary trusts (as part of the Will), superannuation nominations (whether binding, non-binding or reversionary pensions), deeds of variational succession for the family trust, family constitutions, Enduring Powers of Attorney, Appointment of Enduring Guardian and Advance Health Care Directives.

Part of the estate planning process is meeting with the client and identifying what is important to them (for example, asset protection or tax planning) and determining how that can be achieved based on the family dynamics and structure of the client’s assets.

The process – financial advisors, accountants, and lawyers working together

Many people have multiple advisors, whose role is to provide legal, financial and tax advice. The problem we often see is that these professionals do not work together or are not aware of what the others are doing. These professionals all have very different skill sets and it can be of enormous benefit to clients to interweave the skill sets to give them holistic advice.

Quite often, a collaborative approach is the best approach where a financial advisor, an accountant, and a lawyer can join forces to ensure the client’s financial affairs and testamentary intentions align. The process of estate planning is often a delicate balance of both well-thought-out strategy and careful planning.

It is often the case that when a lawyer comes into the estate planning piece that it can be very transactional. As a result of this, the lawyer involved may not have the benefit of an ongoing relationship where they have been privy to the client’s nuanced family history or have copies of the source documents required for an estate plan (such as trust deeds, prior estate planning documents, binding nominations, loan account documents, etc).

When a client involves their financial advisor and accountant in the estate planning process, particularly in circumstances where there is a long-standing relationship, it can be extremely helpful to the lawyer who is instructed to put together an estate plan. 

It is impossible for any single professional to have all the answers. There are so many opportunities for professional advisers to work together in the estate planning process.

For the advisors to work together, there needs to be communication and clarity. Ultimately the aim of the advisors is to act in the best interests of their clients and to do so it is important for the advisors to build a trusted working relationship and respect and understand that each advisor has different skill sets in terms of their particular area of practice.  

Who is doing what?

There needs to be clarity with the client and the advisors on who is doing what. The advisors that work together need to establish a clear document handling process and clarity around who is giving what advice.   

It is common for financial advisors and accountants to talk about estate planning with their clients, and discuss the importance of getting their Will done, doing a Power of Attorney or superannuation nominations. However, when it comes down to putting those documents in place and giving advice around those documents, that is the role of the lawyer.

With online products becoming more readily available, there seems to be an increase in scope for non-legal advisers to utilise such services for their clients without involving a lawyer in the process. In many cases, people assume that these documents have the same level of protection and legal advice sitting behind them, however, that is simply not the case. Financial advisors and accountants need to be very careful and clear on where the line is if they are giving advice that could be deemed legal advice. The same goes for lawyers, part of the estate planning process can often involve tax planning or financial advice which should always be deferred to the advisor who can provide that advice.   

Whether it is giving legal, investment or tax advice there are minimal legal requirements for the various professionals. For instance:

  • Each of the states and territories have legislation in place that a person must not engage in legal practice unless they are admitted to the legal profession and hold a current practising certificate.
  • When it comes to giving tax advice that can only be given by someone who is registered with the Australian tax office as a tax or BAS agent.
  • For someone to provide advice on financial products they must hold an Australian financial services licence (or be a representative of someone who holds a license).


Some rules for financial advisors, accountants, and lawyers

  • Lawyers should not give advice on investments or tax. They should, however, have a working knowledge and understanding of tax law so they can identify potential taxation issues and refer the client to the appropriate advisor for specialist advice.
  • Accountants should not give advice on trusts and estates or investing. They should be giving taxation advice.
  • Financial planners should not advise on tax, trusts Wills and estates. They should advise on investments and insurance.


Attwood Marshall Lawyers – a leading law firm with dedicated teams who specialise in estate planning, estate administration and estate litigation

Our estate planning lawyers practice exclusively in this area and have a large scope looking after everything from mums and dads to pensioners, to high-net-wealth clients. They have the skills and experience to ensure that their client’s wealth that they have built up over their life ends up with who they intend it to.

We are not a generalist law firm and take great pride in the fact we have specialist teams who practice exclusively in their fields. Our lawyers are passionate about their chosen fields and understand how to communicate effectively with clients to deliver a personalised and comprehensive service.

We empathise with clients and connect with them to truly understand the “why” behind their testamentary intentions. We do not believe in being “order takers” and work hard to build solid relationships to give our clients the right advice.

If you have a client who requires a holistic approach to their estate planning and wants advice they can depend on, we would love to help them.

To discuss our Wills and Estates services, you can contact our team any time on 1800 621 071, or call Wills and Estates Department Manager Donna Tolley on direct line 07 5506 8241, or email dtolley@attwoodmarshall.com.au

Read more:

SUPER MISTAKE: Financial Planner faces damages claim after preparing faulty Binding Nomination

Binding Death Benefit Nominations and Self Managed Super Funds – Life and Death Paperwork!

Estate planning is essential to ensure your retirement savings are passed on to your loved ones

Estate planning for young people: Why Generation Z and Millennials should write a Will

 
 
 
 

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Angela Harry

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