Estate planning offerings, once considered an optional value add, are rapidly becoming table stakes for wealth managers.
According to a recent survey of 1,000 clients by the (admittedly self-interested) online estate planning platform Vanilla. Fully 80% of respondents said they expect estate planning to be integrated into their advisors' offerings, either directly or through collaboration. More than half see estate planning as a non-negotiable service.
Although 93% believe it is imperative to discuss estate planning issues with family, family-centered concerns were of medium importance to most respondents. “Ensuring a loved one's financial security” and “reducing family conflict” are ranked third and fourth (out of five), respectively, in terms of importance to a plan. “Protecting assets from probate” and “minimizing estate taxes” topped the list.
However, there is a dissonance here, as the relatively poor performance of “softer” concerns in terms of the importance of a plan does not result in respondents' answers regarding their top priorities when leaving a legacy – “Ensure that my family supports my personal values” was the top answer here at 42%, well ahead of “Structuring my finances to preserve long-term wealth” at 34%.Furthermore, and perhaps more informatively, “Making sure my family preserves my personal values” was also the consensus hardest aspect to plan for according to 45% of respondents, again handily beating out “Structuring my finances to preserve long-term wealth ” at age 32. %. So avoidance may play a role in the “importance” ranking.
Taxes are a big concern, so it should come as no surprise that nine out of 10 respondents are worried about the impact of taxes on their properties. Overall, 86% of respondents believe that minimizing tax liability is important and 57% see it as “very important”. Nearly 90% of respondents value tax expertise when choosing 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 ready to embrace online estate planning technology, with 60% of respondents feeling comfortable using an online platform for simple estate planning tasks such as 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 are simply more comfortable working with one person. A whopping 75% responded 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 an essential 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 tax concerns and complicated, often conflicting feelings about inheritance, driving more personalized and comprehensive estate strategies.