Estate planning is a critical aspect of financial management that often gets overlooked until it’s too late. It involves deciding how your assets will be distributed after your death.
To navigate the complexities of estate planning effectively, many individuals and families in Grand Rapids turn to financial advisors for guidance.
The Role of a Financial Advisor in Estate Planning
A financial advisor’s role extends beyond managing investments. They play a pivotal role in estate planning. Here are some of the ways a qualified advisor can help:
Goals and Objectives: A financial advisor will understand your unique financial situation, family dynamics, and long-term goals. This includes determining how you want your assets to be distributed and minimizing or eliminating estate taxes.
Comprehensive Estate Plan: Your financial advisor will help you develop a comprehensive estate plan based on your goals and objectives. The advisor will help conceptualize your plan and coordinate with trusts and estate attorneys to prepare the legal documents.
Investments: Your financial advisor will also manage your assets, making strategic investment decisions that align with your objectives and risk tolerance.
Review and Revise: Estate planning isn’t a one-and-done process. Laws and regulations change, as do your circumstances. A good financial advisor adjusts your estate plan accordingly.
Qualifications
Estate planning involves many financial considerations, including investment management, tax planning, and accounting. Having an advisor who has both the Chartered Financial Analysts (CFA®) and Certified Public Accountant (CPA) designations can help you navigate the intricate financial aspects of estate planning.
Chartered Financial Analyst
The Chartered Financial Analyst designation is a highly respected credential in finance. It is awarded by the CFA Institute, a global association of investment professionals. The CFA® designation reflects a deep understanding of investment management, portfolio analysis, and financial planning.
Requirements for Earning the CFA Designation
To become a CFA® charter holder, an advisor must have a bachelor’s degree from an accredited institution or equivalent education or work experience.
The CFA® program consists of three levels of exams that candidates must pass sequentially. These exams are known for their rigor and are designed to test a wide range of knowledge and skills related to finance and investment.
In addition to passing the exams, candidates must have at least four years of qualified work experience related to investment decision-making.
Candidates must adhere to the CFA Institute’s Code of Ethics and Standards of Professional Conduct throughout their careers. This includes maintaining the highest level of integrity and professionalism.
To earn the CFA® designation, candidates must become members of the CFA Institute and adhere to its membership rules and regulations.
Candidates must provide professional references who can attest to their character and work experience.
Certified Public Accountant
The Certified Public Accountant designation is a globally recognized credential for accounting professionals. It is awarded by the American Institute of Certified Public Accountants (AICPA) in the United States.
The CPA designation is highly regarded in accounting, auditing, taxation, and consulting.
Requirements for Earning the CPA Designation
The educational requirements for earning a CPA designation vary by state. Generally, candidates need a bachelor’s degree with a major in accounting or a related field. Some states also require a minimum number of accounting and business credit hours.
Candidates must pass the Uniform CPA Exam, which consists of four sections:
Auditing and Attestation: This section covers auditing procedures and standards, attestation engagements, and ethics.
Business Environment and Concepts (BEC): BEC focuses on business concepts, financial management, information technology, and corporate governance.
Financial Accounting and Reporting (FAR): FAR covers financial accounting principles, financial statement preparation, and related topics.
Regulation (REG): The REG section tests candidates’ knowledge of federal taxation, business law, and ethics.
Most states require candidates to have some work experience in public accounting or a related field. The experience requirement typically ranges from 1 to 2 years and may involve auditing, tax preparation, or consulting.
Some states also require candidates to pass an ethics exam covering the AICPA’s Code of Professional Conduct and relevant state-specific ethics rules.
After earning the CPA designation, individuals must fulfill ongoing education requirements to maintain their license.
Benefits to Clients
Here’s how clients benefit from retaining an advisor for estate planning who is duly qualified as a CFA® and a CPA:
Tax Efficiency: One of the primary concerns in estate planning is minimizing tax liabilities for you and your heirs. CPAs are proficient in tax planning and can help structure your estate to optimize tax efficiency.
Investment Management: A CFA’s knowledge of investment management can play a crucial role in growing and preserving your assets. They can help design an investment portfolio that aligns with your estate planning goals, including wealth preservation, providing for heirs, and supporting charitable causes.
Asset Protection: Asset protection is a vital aspect of estate planning. Dual-certified advisors are well-equipped to guide you in structuring your assets to shield them from potential creditors, lawsuits, or other financial risks that could impact the value of your estate.
Estate Accounting: CPAs excel in financial reporting and accounting, which is essential for maintaining accurate records of your estate’s assets and liabilities. They can assist with preparing financial statements and ensure compliance with accounting standards.
Zachary Armstrong, the founder of Allied Integrated Wealth, is dual qualified as a CFA and a CPA. He is well-trained to assist you with your estate planning requirements.
Content in this material is for general information only and is not intended to provide specific advice or recommendations for any individual. All investing involves risk, including loss of principal. No strategy ensures success or protects against loss.
This information is not intended to be a substitute for individualized legal advice. Please consult your legal advisor regarding your specific situation. Allied Integrated Wealth and LPL Financial do not provide legal advice or services.