The do’s and don'ts of estate planning

5 minutes  
Date: 08 August 2018

Take outs

  • Wills and estate planning can be complex and emotional issues for clients
  • Transfer of trust is key to retaining clients as wealth shifts across generations
  • Advisers must be aware of a client’s capacity to make decisions


Wills and estates can be complex but provide an opportunity for advisers to add value for their clients and make connections across generations.

National Manager of Estate Planning at Australian Unity Trustees Legal Services, Anna Hacker, joined us for the Netwealth webinar, The transfer of trust: Effective estate planning for financial advisers.

As an accredited specialist in wills and estates, Anna discussed some of the do’s and don'ts for advisers when it comes to estate planning services and why it’s important to pull estate planning into your advice conversation.

Do be prepared to talk about family relationships

Death and incapacity are sensitive issues and may need a softer hand and more thought into communication styles than a straightforward advice and financial planning session.

“It’s quite common for clients to get emotional when dealing with family relationships and how that affects their estate. Just recently I had a client crying as they discussed excluding children from their will,” Anna says.

“It's important to remain empathetic, but also to introduce the practical and procedural side; you need to put a document in place, you need to talk about the family relationships and create a structure for your assets.”

The outcomes for families dealing with death or incapacity without a will in place can be disastrous.

“Putting things in place in their lifetime won’t be effective if the will doesn’t support your wishes.”

Do remember individuals have unique needs

It’s import that advisers keep an open mind and treat each person as an individual with their own priorities and circumstances. If advisers can show they understand what’s important for the client, the client is much more likely to understand the importance of the estate planning process.

Anna advises focussing on what is important to the client, which can range from minimising tax on themselves or their beneficiaries, to the caring of furry friends.

“An adviser can’t take a one size fits all approach and have the same conversation with every client or assume everyone has the same priorities,” she says.

“You might be surprised how important pets become in the estate planning process. I've seen extremely complicated wills with significant wealth attached where the processes for how pets are looked after are much more detailed than what is left for the children.”

Do connect with the next generation

The transfer of trust between generations is key to retaining the client portfolio when assets change hands after death or incapacity.

“It’s vital to ensure that the trust and credibility you’ve built with your client is transferred to the next generation. Otherwise, you may lose that client and the opportunity to assist them with their own financial planning and wealth accumulation needs,” Anna says.

“Without the trust, we all know clients won't stick around for long.”

Don’t ignore potential capacity issues

Providing financial advice and carrying out transactions when there is any risk of your client having lost capacity (the ability to make decisions in their own best interest) risks your client’s wealth and may leave advisers open to fraud or negligence charges.

Anna recommends getting processes and documents in place early, with a practical and objective process to make tough conversations easier.

“Think about what you might do if your client is making unusual requests about their money or giving up control. Are you going to ask if their nephew is the best person to have power of attorney? How would you raise the possibility that they may no longer be making the best decisions for themselves?”

Having an objective process agreed upon with the client can help bring issues to light without alienating them.

“Have a checklist in place and agree to go through it as a standard practice. If two issues are ticked off, the process automatically moves to asking for a medical certificate of capacity. These triggers might be as simple as not working full-time and being over a certain age.”

Don’t let clients assume planning is only about death

If a person loses capacity and can no longer make their own decisions, they rely on having appropriate, valid documents in place which may include a power of attorney and a health care directive. If these documents aren’t in place, an application to appoint an administrator and/or a guardian must be made to the relevant Guardianship Tribunal in their State.

An administrator structure can provide more protection than an attorney, because they generally have to provide financial reports each year for review.

“For example in Victoria VCAT look at financial reports and give sign-off on any big decisions like selling a property,” Anna explains.

“They may look at if the sale is in the person's best interests. Whereas in theory, an attorney can make those decisions without the same oversight.”

Communicating the importance of planning ahead

Engaging clients on the importance of professional estate planning is an important role for a financial adviser.

“You may have those clients who say they don’t need a will because their estate isn’t that valuable. They see it as uncomplicated and think a will kit will be enough,” says Anna .

“It’s up to advisers to join the dots for them and make the connection on why they need it, and what can happen without it.”

Find out more

Listen to the Netwealth webinar, The transfer of trust: Effective estate planning for financial advisers, for more.