RUSSELL TOWERS was recently presented with a Lifetime Achievement Award from the Rhode Island Estate Planning Council. The award is given to a current or previous member who has excelled in his or her respective field and demonstrated a professional leadership and service to their community. Towers serves as vice president of business and estate planning for Brokers’ Service Marketing Group.
What are some of the unique challenges involved in estate planning work? There are many challenges in estate planning from a legal, tax and financial point of view. My career was heavily involved as a sales support person on how life insurance fits into an estate plan. It was vitally important that the financial assets and objectives of a prospective client be accurately and truthfully disclosed. The challenge was always to take this financial data and craft a financial solution that would solve the estate planning objectives of the client. Often times, this involved the concept of an irrevocable life insurance trust. The ILIT is often thought of as the cornerstone of estate planning because it provides the tax free and leveraged financial power to accomplish many estate planning objectives a client may desire.
Are there any common misconceptions, or anything you wish more people knew about estate planning? There are many misconceptions about estate planning, too numerous to mention here. Some estate plans are very simple and some are very complicated depending on the net worth of a client and how many different types of assets comprise the estate of a client. One misconception that clients have is that all of their assets will pass according to the terms of their will administered through the Probate Court. Nothing could be further from the truth. Many assets will not pass through Probate, but will pass on to heirs by such legal methods as joint ownership with right of survivorship, beneficiary designations with life insurance, annuities and qualified retirement plans, assets titled in revocable trusts or irrevocable trusts, and transfer-on-death designations. Only assets titled in the sole individual name of a deceased individual will pass via the will and the Probate process.
Estate planning can be a sensitive topic for a lot of people. How do you ensure that customers feel comfortable talking about and making decisions regarding their assets? Clients must understand that estate planning is not easy and it involves a highly confidential relationship with their professional advisers. Clients must develop trust with numerous professionals, such as a life insurance adviser, an investment portfolio adviser, an attorney to provide legal advice and draft estate planning documents, a tax adviser [such as] a CPA to provide tax advice and file various tax forms with IRS, and often a banking relationship with a trust department to administer any trusts that the client may include as part of their estate plan. This professional team approach is not expected by a client who thinks estate planning is easy and only one adviser is needed to put their plan into effect. This team approach is often the most difficult concept for a client to internalize and a client must be made to feel comfortable that this team of multiple advisers is absolutely needed to make their estate plan work. The client must understand that estate planning is not a one-time event. It is an ongoing process that must be monitored over time to achieve the best result.