Estate planning is a crucial first step in preserving an individual’s legacy, setting out a plan for how assets will be managed and distributed after their death. But what happens after that? Many legal practices stop at the estate planning stage, leaving the business of estate administration to rival firms. However, by integrating estate administration with planning, professionals can offer a seamless, holistic service that honors the wishes of the deceased and addresses the complete lifecycle of an estate.
In this post, we’ll delve into the benefits of integrating estate administration into an estate planning practice, address some of the challenges that might arise, and share a few tips for getting started.
Adding estate administration enables you to offer comprehensive end-to-end services, from creating an estate plan and drafting wills and trusts, to executing the plan and distributing assets after their death. When both services are considered together, you can anticipate potential issues and ensure smooth asset transitions. Beneficiaries will appreciate the convenience of having a single point of contact.
Assisting a family through estate administration can help deepen your relationships with clients. The deceased trusted you with their estate plan; now you can build on that trust by being there for the beneficiaries during challenging times. Who knows—perhaps the family will engage your services to create their own estate plan in turn.
Estate administration can be a significant revenue stream for your practice, whether you calculate fees on an hourly basis or as a percentage of the total value of the estate. While it’s a time-consuming process that does require specialist expertise, you’ll have efficiency on your side. For example, being involved in the estate planning stage means that you’ll have all the key documents at hand. This cuts down on information gathering and data entry, allowing you to hit the ground running.
Above all, estate administration is concerned with honoring the wishes of the deceased. So who better to achieve this than the professionals who helped put together their estate plan in the first place? You’ll have an in-depth understanding of the complexities of the estate, and you’ll be able to avoid the misunderstandings that can arise when planning and administration are handled by different practices.
There’s no doubt that integrating estate administration brings a potential increase in workload. Managing an estate involves a complicated sequence of steps, including asset inventory, valuation and management; dealing with debts and taxes; financial reporting; and making distributions to beneficiaries. It’s important to streamline workflows and facilitate collaboration in order to maximize revenue while still offering a stellar service to clients.
Expanded liability is another consideration. Estate administration carries a number of risks, particularly around compliance. Beneficiaries have the right to complain if they feel that the estate is being mismanaged, and this can lead to a full-blown dispute and costly litigation. It’s essential to keep meticulous records to protect your practice in the event of a dispute, and to consider additional liability insurance.
It’s also important to think about where the responsibility lies to ensure the plan is executed. For example, if the estate plan includes an inter-vivos trust, the planning attorney can draft the trust deed, but who is liable if there is insufficient funding of the trust in question—the client, the trustees or the planning attorney? Offering an estate administration service in complement to estate planning makes it more likely the estate plan will be properly executed, but these considerations will still need to be ironed out.
Then there’s the question of expertise. Administering an estate effectively entails wearing a number of different hats: at various points in the process you might require tax, wealth management, or asset valuation expertise. Establishing a network of trusted consultants is something your practice will need to address.
Technology helps legal practices overcome many of these challenges. Online platforms such as Estateably automate manual tasks, generating reports and filling in forms at the touch of a button so that you can streamline your workload. Document libraries and scheduling tools help to keep your practice compliant, while dedicated accounting tools put specialist expertise in the palm of your hand. Administration software empowers estate planning practices to expand the services they offer without having to call on external consultants.
If you’re considering taking the plunge into estate administration services, here are a few tips to consider:
Building on your estate planning practice to offer estate administration offers multifaceted benefits. While not without its challenges, adding this service can bolster client relationships, increase revenue, and lead to more favorable client outcomes.
If you’re thinking about expanding your practice area, technology can show you the way. Estateably’s cloud-based solution simplifies and streamlines trust and estate administration for professionals through document automation, report generation and powerful accounting tools. Get in touch with our team or book a free demo to find out how our industry-leading platform can propel your practice into profitable new territory.
Estateably Inc. © 2024
Estateably Inc. © 2023
