Estate planning offerings, once considered an optional value-add, are swiftly becoming table stakes for wealth managers.
According to a recent survey of 1,000 clients by (admittedly self-interested) online estate planning platform Vanilla. Fully 80% of respondents answered that they expect estate planning to be integrated into their advisor’s offerings, either directly or through collaboration. More than half view estate planning as a non-negotiable service.
Though 93% believe that it’s imperative to discuss estate planning issues with family, family-focused concerns were only of middling importance to most respondents. “Providing for loved one’s financial security” and “reducing family conflict” ranked third and fourth (out of five) in terms of importance to a plan, respectively. “Protecting assets from probate” and “minimizing estate taxes” topped the list.
There is some dissonance here, though, as the relatively lackluster performance of “softer” concerns in terms of importance to a plan isn’t borne out in respondents answers about their top priorities when leaving a legacy—“Ensuring my family upholds my personal values” was the top response here at 42%, well ahead of “Structuring my finances to preserve long-term wealth” at 34%. Additionally, and perhaps most informatively, “Making sure my family upholds my personal values” was also the consensus most difficult aspect to plan according to 45% of respondents, again comfortably beating out “Structuring my finances to preserve long-term wealth” at 32%. So, avoidance may play a role in the “importance” rankings.
Taxes are a big concern, so it should come as no surprise that nine in 10 respondents are concerned about the impact of taxes on their estates. Overall, 86% of respondents believe that minimizing tax liability is important, and 57% view it as “very important.” Nearly 90% of respondents value tax expertise when selecting an estate planner, with 61% considering it “very important.”
Despite these high levels of concern, less than half (42%) have taken proactive steps to minimize taxes through planning with a professional.
Respondents generally feel willing to embrace online estate planning technology, with 60% answering that they feel comfortable using an online platform for simple estate planning tasks, like creating a will. However, there are caveats; as estate planning becomes more complex (such as choosing trusts, navigating tax implications or addressing family dynamics), respondents are less and less comfortable with an online-only approach. Notably, only 22% were comfortable trusting online-only platforms with planning for tax-efficient wealth transfer strategies.
That said, many simply feel more comfortable working with a person. A whopping 75% answered that they would be more likely to consider an online estate planning platform if it offered personalized support from a live advisor.
Clients increasingly view estate planning as a core element of holistic wealth management, not just a one-time task. The survey results imply a preference for advisory services that integrate estate planning into broader financial strategies, with concerns around taxes and complicated, often conflicting feelings about legacy driving more personalized and comprehensive estate strategies.