Attorney vs. Financial Advisor for Estate Planning

Estate planning involves both legal documents and financial decisions. It’s an important part of securing your wishes and protecting your legacy. But who do you call to help you put together an effective plan—an attorney or a financial advisor?

Many confuse these roles. Both help with estate planning, but each has distinct expertise. Understanding the difference ensures you choose the right professional.

This article explains the differences between legal professionals and financial advisors in planning an estate. It covers their typical responsibilities, expertise, and when you might need one or both.

Role of an Estate Planning Attorney

A central element of estate planning is navigating legal nuance and establishing key documents, directives, and vehicles. Therefore, it is essential to have an attorney by your side to create a plan that safeguards your wealth and wishes.

Here are specific tasks an attorney can assist with:

• Drafting and updating a will.
• Creating trusts (revocable, irrevocable, etc.), and, in some cases, acting as a trustee.
• Establishing powers of attorney (POA) and advance healthcare directives.
• Ensuring the legal validity of your estate, including compliance with local and federal laws.
• Dealing with disputes or claims on your estate from relatives, former spouses, or creditors.

Attorneys implement your estate plan and create a solid legal framework. They translate complex legal issues, recommend estate components, and ensure your plan is follows the law.

“An estate planning attorney is exactly that – an attorney. They’re licensed to give legal advice and create legal documents such as revocable living trusts, wills, powers of attorney, health care directives, and transfer deeds,” says Rebecca Secord, owner and managing attorney at Your Home Legal, APC. “They also advise on tax and property implications, plan for incapacity, and structure how assets will transfer when you die,” she adds.

Unlike financial advisors, attorneys draft documents and provide legal counsel, making them essential for estate planning. However, they typically don’t give detailed financial or investment advice and don’t replace an advisory professional.

Role of a Financial Advisor in Estate Planning

Financial advisors can also play a pivotal role in estate planning. However, theirs often looks much different than that of an attorney. Rather than legal advice and execution and document creation, advisors carry knowledge around protecting, managing, and transferring wealth as part of an underlying financial strategy.

“The most common way a person gets started with estate planning is through their financial advisor,” explains Mike Bennett, COO and Head of Estate Planning at EncorEstate Plans. “Once the financial planning process has been started, it is a natural progression to have an estate plan as the cherry on top of a financial plan.”

Here’s how a financial advisor may help plan and manage your estate:

• Exploring the impact of estate planning in a comprehensive financial plan.
• Providing guidance on asset protection, using trusts or other vehicles.
• Reviewing and updating beneficiary designations for retirement accounts (IRA, Roth IRA, 401(k), etc.) or life insurance policies.
• Delivering support on federal and estate taxes, including strategies to minimize them.
• Giving advice on charitable giving strategies.

Advisors can also be helpful if you’re unsure how to begin an estate plan. Since they have a comprehensive knowledge of your situation and needs, they can share how an estate strategy intertwines with your existing financial goals and life circumstances and the first steps needed to begin one.

“A number of financial advisors, specifically Certified Financial Planners (CFPs), have extensive experience in estate planning,” says Bennett. “They also generally have a lot more knowledge about a particular client due to the ongoing relationship.”

A financial professional can be an especially helpful resource if you have a high net worth or complex investment portfolio. For instance, they might help better understand how to structure your estate to minimize taxes upon wealth transfer, or the impact of placing assets in a trust.

Financial Advisors Have Legal Limitations

Despite their involvement in estate planning for clients, financial advisors can’t replace an attorney. It’s a common misconception for people to assume that since their advisor offers guidance on building an estate, they’ll be able to handle everything. This is not the case, however.

“Many clients will ask their financial advisors legal questions. This isn’t surprising, because financial advisors often serve as a ‘jack of all trades’ outside of financial advising,” says Geoff Hoatson, CEO and founding attorney of Family First Firm Elder Law. “They work as a quarterback for their clients, ensuring that all of their needs are met. This leads clients to assume that their advisors are legal experts, and we’ve seen this create problems where the advisor gave legal advice which was incorrect or incomplete.”

It’s important to note that financial advisors “may or may not have legal training” and “most do not and cannot provide legal advice,” explains Secord. Many of them don’t carry the necessary background or credentials (e.g., JD, bar license, etc.) to do so. “Their expertise is in wealth building, investment strategy, retirement planning, and ensuring assets are titled and beneficiary designations match the client’s goals,” she adds.

Bennett points out that because “they are not licensed to practice law,” a financial advisor “needs to be aware of their limits” and, thus, must be ready to defer to an attorney when needed.

How They Work Together

Attorneys and financial advisors both play roles in the estate planning process, despite their unique expertise and credentials. In many cases, it’s most effective when they can collaborate and offer the best of both worlds for your estate and legacy plans.

“The attorney and advisor can work together for the best client outcome,” Bennett explains. “A financial plan is not complete until you have an estate plan. As a result, having these roles coming together in a cohesive way is vital.”

Your estate planning attorney’s and financial advisor’s tasks can vary depending on your situation. In practice, though, it’s common to begin discussing your estate strategy with an advisor, then transition to working with an attorney when it’s time to assemble the elements of that plan, such as a trust, will, or other documents.

“Most financial advisors will ask their clients about their estate planning and their goals with their finances. Once they’ve identified a need, the advisors should be referring to an estate planning or elder law attorney to have a deeper discussion,” highlights Hoatson.

It’s also essential that both professionals keep up an open line of communication with each other and with you. According to Hoatson, “The attorney should often be involving the advisor so they are aware of the legal strategies being implemented and can look for any areas or decisions the client may make in the future which would cause problems for the effectiveness of the estate plan.”

When working together, both experts can lay the foundation for an effective estate plan. Your financial advisor and attorney can work alongside you to develop a cohesive strategy that secures your assets and wishes.

When to Hire an Attorney, a Financial Advisor, or Both

Estate planning is a complex yet highly critical part of managing your finances and directing your legacy. Consequently, it’s smart to have the right professionals in your corner to help you avoid mistakes and point you in the right direction.

Attorneys hold an important role in handling the legal side of your estate, including navigating complex documents and tools, such as wills, trusts, POA documents, and structuring your estate to avoid probate and minimize estate taxes.

Financial advisors, on the other hand, can provide especially personalized advice related to your financial circumstances and goals. They can help strategize taxes, retirement, and estate needs, and are often experienced working with high-net-worth individuals and families who have complex situations and portfolios to manage and safeguard.

In many cases, however, it’s most effective to have both professionals. Financial advisors can help you design a strategy that’s aligned with your long-term goals and needs. Meanwhile, an estate planning attorney is the one who’s legally authorized to help you put that plan into action and lend additional guidance on legal nuance.

The table below summarizes the scenarios where each type of professional could assist with your estate planning needs:

Scenario or Need	Estate Planning Attorney	Financial Advisor
Drafting wills, trusts, or POA documents	Handles legal documents and ensures compliance with state law.	Cannot draft legal documents.
Wealth transfer and minimizing estate taxes	Works with advisor to structure trusts and protect assets.	Creates tax-efficient investment and estate strategies.
Managing investments or retirement accounts	Not typically able to provide financial advice.	Develops and manages investment strategy.
Dealing with probate or disputes	Represents estate and ensures legal compliance.	Refers client to attorney for disputes.
Aligning your financial goals with your estate plan	May review for legal implications.	Integrates estate plan into long-term financial strategy.

Finding Qualified Estate Planning Professionals

When searching for both legal and financial professionals, it’s important to ensure you’re working with qualified, trustworthy experts. For both roles, this typically means they carry a certain level of expertise, experience, and education, as well as recognized credentials and designations.

For estate planning attorneys, be on the lookout for those who specialize in estate and elder law and hold licenses through your state’s bar association. Similarly, look for legal professionals with memberships in the American Bar Association (ABA) or the American College of Trust and Estate Counsel (ACTEC), or those with the Certified Elder Law Attorney (CELA) designation from the National Elder Law Foundation (NELF).

For financial advisors, it’s first crucial to prioritize professionals who uphold a fiduciary duty, as these will be legally required to put your best interest first. Professional certifications are a good way to spot fiduciaries. Experts with reputable titles such as Certified Financial Planner (CFP), Chartered Financial Consultant (ChFC), and Accredited Estate Planner (AEP) often hold well-rounded financial and estate planning backgrounds, while being bound by high ethical standards.