Estate Planning vs. Financial Planning

estate vs financial

You’ve decided that it’s time to start the estate planning process. You may be wondering whether you should work with an estate planner or a financial planner. It’s common to confuse the responsibilities of estate planners and financial planners. Both of these professionals offer clients substantial value by helping them organize their assets, plan for the future, and create security and peace of mind. 

However, these professionals have distinct differences in their areas of practice. Estate planning is typically directed by an attorney, not a financial planner. A financial planner focuses on your long-term financial goals. When creating the legal documents that will protect you and your loved ones, you need an estate planning attorney. The skilled estate planning attorneys at Surprenant & Beneski, PC, take a comprehensive approach when working with clients. We will work with you and your financial planner to keep your affairs in order. 

What Is Financial Planning?

Financial planners help clients understand and implement their long-term financial goals. Typically, financial planners will help clients create a financial plan that includes a client’s net worth statement, a risk profile, as well as financial and retirement goals. The individual risk profile will evaluate the client’s willingness to take risks that could impact his or her future. For example, clients reaching their retirement years are often less willing to take on financial risks. 

Ultimately, the main goal of financial planners is to help clients understand how best to handle their finances to meet their goals. Financial planners help clients use their financial plan as a road map for achieving their goals. After considering and analyzing a client’s investments, the planner will advise the client about how likely they are to serve those goals. They will typically make recommendations to help clients bring their investments more in line with their financial goals. 

What Does Estate Planning Mean?

There is a common misunderstanding that only high net-worth individuals have estates and need an estate plan. On the contrary, nearly everyone has an estate. An estate comprises all of a person’s assets, including their home, checking and savings accounts, investments, home, other real estate, life insurance, and personal possessions. The goal of estate planning is to decide in advance who will receive your assets after you die. 

An estate planning attorney will help you create legal documents to ensure that the people or charities you select will receive your assets. Without an estate plan in place, the state of Massachusetts will distribute your property according to their intestacy laws. When a person dies without an estate plan, their assets may be distributed to a person they wouldn’t have chosen to receive them. Estate planning can help you achieve all of the following goals:

  • Provide instructions for your care should you become disabled before you pass away
  • Name a guardian if you have any minor children
  • Financially provide for family members with special needs without making them ineligible for public benefits, such as MassHealth and Medicare
  • Provide for loved ones who may be irresponsible with money or may need protection from divorce or creditors
  • Dictate how you’d like your digital assets to be handled
  • Give specific direction for the transfer or sale of your business at your disability, retirement, or death
  • Minimize court costs, taxes, and unnecessary legal fees

An Estate Planning Attorney Can Help You WIth Advance Care Planning

An important aspect of estate planning that a financial planner can’t tackle alone includes advance care planning. An estate planner can help you select the best type of life insurance that will provide for your family at yoru death. If you become unable to work due to disability or illness, an estate planner can help you ensure that you have long-term care insurance to pay for your care. 

While financial planners can advise you of the pros and cons of each type of insurance product, you will need an estate planning attorney if you’d like to create a life insurance trust or another trust for the specific purpose of protecting your assets and helping you become eligible for long-term care insurance through MassHealth. The drafting of legal documents requires the services of a skilled estate planning attorney. 

The Benefits of Financial Planning with a Financial Planner 

Financial planning and estate planning are ongoing processes. Creating an estate plan or a financial plan isn’t a one-time event. Major life changes, such as marriage, divorce, the birth of a child, and the death of a loved one can all require an update to your plans. It’s important that you review and update your legal documents and financial goals as your circumstances change over time. 

The best way to achieve this goal is to work with a financial planner and an estate planning attorney. An estate planning attorney won’t be able to offer the kind of detailed financial reports and planning that a financial planning professional offers. Likewise, a financial planner cannot help you plan and draft all of the documents you need for a comprehensive estate plan. The attorneys at Surprenant & Beneski, PC know how important it is to work with our clients’ financial planners to ensure that we’re incorporating our clients’ financial goals into their estate plans. 

Reach Out to an Experienced Estate Planning Attorney

Financial planning and estate planning are both important, but for different reasons. At Surprenant & Beneski, PC, we will work with your tax advisor and financial planner estate to create a comprehensive estate plan that protects your assets and your wishes regarding how they should be distributed at your death. When you work with Surprenant & Beneski, PC, we take a comprehensive approach to estate planning. Many of our clients remain with us for life and rely on our skilled attorneys to help them navigate all of their life changes and challenges. Contact Surprenant & Beneski, PC today to schedule your initial consultation.