Estate planning often sits at the bottom of people’s to-do lists, but it plays a crucial role in securing your family’s financial future. It ensures your loved ones are provided for after you pass away, and outlines how your belongings are distributed.

“Estate planning is for everyone, not just wealthy people,” says Stephen Kates, a certified financial planner and financial analyst at Bankrate. “Simplifying your heirs’ responsibilities in closing your estate may be one of the best gifts you can give.”

Without a proper estate plan in place, the legal system decides how your assets are distributed, which can cause problems for your beneficiaries. This process, known as dying intestate, can lead to a time-consuming and costly ordeal in probate court.

While an estate planning lawyer is vital for drafting certain legal documents, a financial adviser brings a broader perspective to the table. They analyze your income sources, investment portfolio, retirement accounts and insurance coverage, providing financial context that might not be apparent to a lawyer.

From picking the right long-term care insurance to maximizing charitable contributions, a skilled financial adviser can make all the difference during the estate planning process.

1. Guides you in gathering the necessary documents

A financial adviser can help you draft an estate planning checklist and organize all your documents, including:

A legal document that outlines your wishes regarding the distribution of your assets.

Designates someone to make financial and/or medical decisions on your behalf if you become unable to do so.

Informs doctors and medical professionals about how you want to be treated if you cannot make your own decisions about emergency treatment.

While an adviser can help you gather these documents, they can’t provide legal advice. For help with drafting and finalizing a will, consult a lawyer.

2. Works through the division of your assets

Dividing assets can be one of the most emotional aspects of estate planning.

If you have a diverse portfolio of real estate, investments and cash holdings, a financial adviser can recommend the most equitable way to distribute these assets without triggering major tax implications for your beneficiaries. They can also use their expertise to help estimate the value of your estate.

“Organizing your assets, possessions and intentions are the most important aspects of a good estate plan,” says Kates.

3. Establishes financial plans to carry out your wishes

A trust is a legal structure that protects assets, provides for beneficiaries and specifies under what conditions assets can be distributed.

By working with an estate attorney, a financial adviser can help establish a family trust or other plans that ensure your wishes are carried out after you’re gone.

•Consider this scenario: You want to establish a trust for your children, and you also want to maximize the returns on your investments inside the trust. An estate planning attorney will draft the trust documents, ensuring they comply with state laws. Then your financial planner steps in to offer advice on which investments and assets to place in the trust. This helps you benefit from professional tax planning strategies and potentially higher returns over time.

A financial planner can also ensure beneficiary designations are properly set up on retirement plans and life insurance policies. They can also help you open joint bank accounts or set up payable-on-death forms at your financial institution so those accounts avoid probate.

4. Helps you choose coverage plans

Life insurance and long-term care coverage are often folded into the estate planning process because they provide financial support to a policy owner’s family. But navigating the complex landscape of policy types, riders and coverage amounts can be daunting on your own.

An estate planning adviser can help you compare options and quotes from different providers so you secure the best coverage for your budget.

They’ll also assess how much life insurance you need and offer guidance on how to submit your application to the insurance company.

5. Maximizes tax benefits on charitable donations

If philanthropy is close to your heart, a financial adviser can provide valuable guidance on making the most of your charitable giving.

They can help structure contributions in a way that maximizes tax benefits. For example, a financial adviser may recommend utilizing a donor-advised fund, which lets you make contributions, receive an immediate tax deduction and then distribute funds to chosen charities over time. This not only streamlines the giving process but also offers significant tax advantages.

Tips for choosing a financial adviser for estate planning

You want to find a financial adviser with experience in the industry who can work alongside your estate planning attorney. A good adviser will identify risks in your financial plan, help you prioritize action items and explain any potential costs involved in the estate planning process.

As you begin your search for a financial adviser, keep these factors in mind.

•Credentials and experience: Look for advisers with relevant certifications, like the certified financial planner (CFP) designation. Make sure to ask about their experience in estate planning.

•Client referrals: Seek out reviews and testimonials from past clients. Referrals from friends and family can provide valuable insight too, as well as input from your tax adviser or attorney.

•Transparent fee structure: Understand how the adviser is compensated. Look for a fee-only fiduciary who is obligated to act in your best interest.

•Good communication: Estate planning can get complicated, so look for an adviser with good communication skills.

•Ask questions: Take advantage of any free consultations by interviewing potential advisers. If it doesn’t feel like a good fit, or you’re not getting the answers you need, move on to the next candidate.

Key takeaways

•While lawyers draft wills and trusts, financial advisers help align those legal documents with your full financial picture, from investments to insurance.

•From organizing documents to setting up trusts, advisers help manage the many moving parts of estate planning so nothing falls through the cracks.

•If you want to leave a charitable legacy, advisers can help you use tools like donor-advised funds to maximize both your impact and your tax deductions.

•Look for an adviser with CFP credentials, solid referrals, transparent fees and a collaborative attitude. If an adviser can’t explain things clearly, they’re not the right fit.

Bottom line

Engaging a financial adviser in your estate planning journey is a smart move. advisers ensure your investments, insurance and overall financial goals align with how you want your assets handled. From minimizing taxes to avoiding probate headaches, their guidance can save your loved ones time, money and stress.