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Estate Planning and Financial Planning

Estate Planning and Financial Planning: How One Enhances the Other

Certified financial planners (CFPs) and Estate Planning Attorneys are two complementary professions that work together to ensure your present and future financial well-being. 

CFPs help you organize your finances by working with you to design a plan that allows you to meet your economic goals. This involves a yearly calculation of your net worth, projections concerning your retirement savings, and a risk tolerance analysis that ensures success based on your personal circumstances.

Once you have designed a financial plan, your CFP will work with you to build an investment portfolio that meets your goals. Investing is a life-long project that requires regular adjustments to ensure you maintain a balance of stocks, government bonds, and cash suited to your needs. As you age, meet important milestones, and ready your finances for retirement the balance of your holdings will need to change and your CFP will be there to explain how and why.

Throughout this entire process, your estate planning attorney will also play an active role.

An estate planning attorney ensures your assets are efficiently and advantageously distributed at the end of your life. They will assist in drafting essential documents such as Wills, trusts, and advance directives. They will also instruct you on how to avoid or streamline probate, minimize taxes, and secure your family’s future.

In addition, your estate planning attorney will help you institute contingencies for unthinkable but not-impossible outcomes such as an incapacitating car accident or the onset of dementia. Protections from such tragedies come in the form of execution of a durable power of attorney and healthcare directive and the institution of a long-term care plan.

None of an estate planning attorney’s tasks are possible without a comprehensive understanding of your finances which is why it is crucial that your attorney understand the plan you have drafted in consultation with your CFP. Likewise, a CFP cannot help you accurately plan your finances without a clear grasp of your estate planning goals. For these reasons, the two need to be able to communicate.

Communication between your estate planning attorney and CFP is not a one-time thing. Just as an estate plan and financial plan require regular maintenance and updates, so too does each professional’s understanding of the other’s work.

In an ideal world (and why not aim for ideals, right?), every adult would begin estate planning as soon as they reach the age of majority and begin financial planning upon the arrival of their first paycheck. While this rarely happens, both tasks should at a minimum be undertaken as soon as you invite a spouse into your life and begin to expand your family. Then, as your priorities continue to evolve, your financial and estate plan should both be updated accordingly. This means that your CFP and estate planning attorney should maintain an ongoing dialogue about your growing financial priorities.

To learn more about how financial planners and estate planners work hand-in-hand to ensure your economic success in both the short and long-term and to begin building a plan today, do not hesitate to reach out to the Law Firm of Christopher W. Dumm either by calling 417-623-2062 or using the contact form on our website.


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