Everyone’s talking about the CPA shortage, but we should be just as concerned about the estate planner shortage. With record numbers of baby boomers (and boomer business owners) retiring, an estimated $30 trillion in wealth will transfer between generations. But that’s not all. As I wrote last month, the Gift and Estate Exemption Clock Is Ticking for 2 Million Families as the generous exemption limits from the 2017 Tax Cuts & Jobs Act will sunset at the end of 2025. That means dozens, if not hundreds, of your clients may suddenly find their estates in the crosshairs of Uncle Sam.
Meanwhile, many original dynasty trusts and generation-skipping trusts drafted a century ago are ending. Those trusts, designed to shield a family’s assets for as long as was legally possible at the time of their creation, are about to disgorge billions of dollars out to heirs. And there’s probably been no planning to prepare the heirs for their windfall.
You’d think estate planners would be licking their chops with all the work likely to come their way. But there just aren’t enough to handle the deluge of cases. Boomers have started aging out of the law profession, just as in most other industries. But no one’s stepping in to take their place. Further, there’s been no knowledge transfer in niche areas like estate planning. Industry consolidation has further reduced the number of available estate planners as seemingly redundant positions following firm mergers are eliminated. Meanwhile, law school admissions continue to decline, and the reduction in estate planning activity in the past decade has further diminished the interest of younger lawyers in estate planning careers.
In many ways, it’s a perfect storm of factors at play. Mass wealth is being transferred, and there are not nearly enough planners to help families manage it. That’s where you come in.
Opportunity of a Lifetime
Sure, lots of essential accounting work is being offshored to places like the Philippines and India, but you can't offshore legal work quite so quickly. If you’re a wealth advisor or experienced financial planner, advanced planning is a lifetime opportunity. Again, we have massive wealth transfer, with boomers retiring, businesses selling, trusts ending, exemption limits contracting and no one there to catch the opportunity.
Sure, you can stay in your lane, but managing money has increasingly become a commodity business. I know what you’re thinking. “There’s too much of a learning curve involved with estate planning. And even if I spent the time to learn it, people can go online to get basic wills and estate planning documents done.”
Sure, potential estate planning clients can go online and try to save money on attorney fees. However, they must still be proactive about deciding to do advanced planning. They must still figure out how to complete all the steps and execute the planning. If they set up a trust, they must figure out how to put all the proper assets in it. Then, they must file a gift tax return. Take it from me; that’s just not going to happen independently.
You don’t wait until you’ve had a heart attack to go to the doctor. The same goes for advanced planning. Ultimately, it depends on how complex a client’s estate is, their assets, and whether they’ve been married before. But so many factors go into advanced planning; it really shouldn’t be a discussion about cost; it’s an investment in a family’s future. And you don’t want to be a do-it-yourselfer here.
Fewer Americans Have Wills and Estate Plans
Caring.com’s 2024 Wills and Estate Planning Study reports for the first time since 2020, the number of Americans with an estate plan has declined. Today, less than one-third of Americans (32%) have an estate plan, down from 38% a year ago. And why don’t they have wills or estate plans? According to Caring.com, the top reasons were procrastination (43%) and believing they didn’t have enough assets (40%). The misconception that they didn’t have enough assets has risen sharply from 33% in 2022 to 35% in 2023. That’s an education problem you can help solve.
In my experience, people don’t want to talk about dying, much less think about it. Further, they don’t know who to talk to about estate planning. They don’t know who to trust. They don’t understand how it works, so they don’t want to pay for estate planning.
Again, that’s where you come in.
And while you’re at it, there’s another excellent opportunity for you—helping affluent families update their estate plans. Those plans are typically outdated, don’t reflect their current situation, aren’t advanced in any way, don’t eliminate taxes and don’t protect future generations.
Won’t AI and Technology Make Most Estate Planning Obsolete?
I know you may be hesitant to invest the time to learn about estate planning with all the hype around AI automating essential estate planning. I don’t think that’s a valid argument because, in my 40-plus-year career, I have never seen two clients with precisely the same issues and concerns. Proper estate planning is not just about knowing the initial question to ask but also knowing the right follow-up questions to expose the full depth of the issues. Considering the wealth of your clients and the complexity of their lives, automated cookie-cutter approaches to estate planning aren’t likely to cut it any more than a robo advisor can solve their investment needs. Only a competent and experienced advisor can fully understand their goals, objectives, fears and concerns and tailor a plan to address those needs.
Opportunity Awaits
The opportunity of a lifetime won’t wait around forever. When you reflect on your legacy and career, how will you answer the question: “Where were you during the Great Wealth Transfer of the 2020s?”
Randy A. Fox, CFP, AEP, is the founder of Two Hawks Consulting LLC. He is a nationally known wealth strategist, philanthropic estate planner, educator and speaker.