The Trusted Advisor’s Playbook for Legacy and Estate Planning

As a trusted advisor myself with over three decades of experience, I know that the role of a trusted advisor transcends the boundaries of traditional advice. You are placed at the heart of your clients’ financial story. And your clients expect that the unique financial planning strategies that you craft for them not only preserves their wealth, but also ensures that their legacy is as they intended it to be.

As an advisor, you are positioned to help guide your clients through the complexities of estate planning. A key component of estate planning is the integration of advanced and innovative life insurance strategies.

Let me offer a step-by-step guide on how you can seamlessly integrate these strategies into your clients’ estate plans. After all, elevating the value of their estate and securing their legacy for generations to come is what they are entrusting you to do.

The Role of Life Insurance in Estate Planning

Life insurance, often perceived simply as a tool for providing financial support to beneficiaries upon the insured’s death, holds far greater strategic value in estate planning.

Beyond its basic function, life insurance can serve as a cornerstone in estate planning, liquidity provision, and even to provided ongoing support to beloved charities.

For affluent clients, the thoughtful selection and integration of life insurance policies can significantly enhance estate value while ensuring a smooth transition of wealth.

Step 1: Assessing Client Needs

Your journey begins with assisting your client through a thorough assessment of their current financial situation, goals, and potential challenges they may face in wealth transfer. This involves:

  • Evaluating Current Financial Statements: Gain a comprehensive overview of your client’s assets, liabilities, and current insurance policies.
  • Identifying Goals and Concerns: Understand your client’s legacy aspirations and any specific concerns they may have regarding their estate.
  • Anticipating Potential Estate Tax Liabilities: Estimate potential estate tax implications based on the current & projected future asset valuations and tax environment.

Step 2: Educating Clients on the Strategic Benefits of Life Insurance

Many clients may not be aware of the strategic applications of life insurance in estate planning. Introduce them to an expert who will educate them on how life insurance can:

  • Provide Guaranteed Estate Liquidity: Ensure there are sufficient funds available to cover estate taxes and any other defined intentions without the need to liquidate other assets.
  • Equalize Inheritance: Use life insurance to provide equitable distribution among heirs, especially when the estate comprises illiquid assets like a family business.
  • Enhance Philanthropic Goals: Fund charitable bequests in a tax-efficient manner.

Step 3: Integrating Life Insurance into the Estate Plan

With a clear understanding of your client’s estate planning goals and the strategic benefits of life insurance, the next step is integration. This involves working with a licensed life insurance specialist to:

  • Select the Right Type of Policy: Based on your client’s needs, decide between term life insurance for temporary coverage or permanent life insurance for long-term estate planning goals. 
  • Ownership and Beneficiary Designations: Advise on the optimal policy ownership structure to ensure the proceeds are distributed as intended in a tax-efficient manner.
  • Policy Funding Strategies: Develop a plan for premium payments that aligns with your client’s cash flow and tax planning strategies.

Step 4: Ongoing Review and Adjustments

Estate planning is not a “set-it-and-forget-it” endeavour. Regular reviews of the estate plan and life insurance policies are essential to adapting to changes in your client’s financial situation, family dynamics, and evolving tax legislation. Schedule annual reviews to:

  • Evaluate Policy Values: Ensure that life insurance coverage is still appropriate and adjust as necessary.
  • Update Estate Valuation: Reflect changes in asset values and reassess potential estate tax liabilities.
  • Revise Beneficiary Designations: Ensure that beneficiary designations remain aligned with your client’s estate planning objectives.

Without question, the strategic integration of life insurance into estate planning offers a powerful tool for wealth preservation and legacy enhancement.

As a Trusted Advisor your guidance is instrumental in helping your clients navigate through the nuances of this process, ensuring their estate planning objectives are achieved with diligence and foresight.

If you’d like to learn more about how we can help your clients, let’s connect to discuss. With basic anonymous information provided by you, we can create a unique proposal showing our approach to legacy and estate planning.

doug leyland headshot CPA, CA

Doug Leyland CPA, CA, MBA

President, Leyland & Matters Private Client Insurance Advisors

Doug Leyland brings over three decades of wealth management expertise to high net worth individuals and business owners. A Chartered Accountant with an MBA, Doug excels in crafting integrated estate and tax planning strategies that safeguard clients’ legacies using complex life insurance strategies.