Why Your Estate & Wealth Plan Structures Should Be Narrow – Not Simple

“I just need a simple plan” – a phrase we hear often in the office. Undoubtedly, this statement originates from the same place in the brains of all of my clients’ – it’s the place that makes good people humble. Although the phrase is often spoken confidently, it displays the client’s initial intense insecurity that almost everyone has when starting to work with a professional in the estate, wealth and asset protection planning industry.

The good news is that that we address client’s initial intense insecurity in the first five minutes of a strategy session. Once we put this concern to bed, we can address the real question in the clients’ mind: “What actual tangible value will I see after engaging in your planning process?”. Today we will discuss value in some specific detail.

Initial Intense Insecurity = Putting limiting beliefs of prior bad experiences to bed & digging in

Our initial strategy session planning process starts quite simply with an explanation on our planning philosophy. To be succinct, a client’s plan must be narrow and tailored to achieve the client’s goals. We do not think that plans are simple or complex. Plans are narrow or broad. That’s it.

Besides being factually incorrect it is bad practice to call a plan simple. Let’s give some respect to what your plan is doing; this “simple” plan will ultimately:

• affect every single penny you own;
• will define the rights and obligations of your spouse, children and grandchildren;
• will protect some of your most intimate and personal decisions, like the right to die a dignified death;
• will empower others to act for you when you are helpless and at your most vulnerable;
• will speak for you long after you have died.

How can a plan that does all of that be simple?

Rather than simple, your plan should be narrow. Indeed, your plan should be specifically narrow and tailored to achieve your goals, while maintaining enough flexibility to account for reasonably expected changes in circumstances. Over time, our process helps determine and define goals as they change and then we narrowly tailor the plan to achieve those goals. After achieving this explanation we can start to explore the bigger question: “What value will I see after engaging in the planning process.”

The Value of a Plan – Something Different for Everyone

Admittedly I used to get aggravated when clients would insist on discussing a “simple plan.” I would get frustrated with clients who were unwilling to discuss the various aspects of wealth and estate planning that I knew they were ignoring. It was off putting to me when a client would insist that our firm created a “product” (like a will) without engaging in a more in depth planning process conversation to VERIFY that they weren’t missing anything important. And then I stopped working with those clients. Easy solution for me.

But was that the best solution for those clients? I knew it was not. It concerned me that those clients had exposure to downside risk that they we didn’t discuss. Even though I knew the self- created plan that was executed by our office was going to be fine for 95% of the situations their family would face, I continued to lose sleep over the 5% of situations that would cause a lasting negative impact on the client’s family and dreams. I knew that there needed to be a better way to convey the value of the process so I could help those clients who were resistant to the process.

Over several years of intensely analyzing client mindset, process, and value I’ve come to learn that value is a more complex concept then most planners realize. My client results ultimately skyrocketed after realizing this fact and changing my approach.

I used to focus on the TELLING the clients about the value. I would try different phrases, anecdotes or case studies about red flag issues. I would highlight my knowledge in the various planning disciplines (estate law, tax, investment structures, real estate acquisition etc). That worked enough but when I really started to see results was when I focused on having the client define the value they needed to achieve in a plan and then SHOWING the clients how the process can achieve the level of value they desired. It was when I realized that I was stopping at expert value and missing out on a more elusive value level I have come to call preponderant value.

When I was TELLING clients about value I was touting a level of expertise that is commoditized. That commoditized value is expert value. Expert value is the lowest level of value that a client can achieve. Effectively expert value boils down to understanding and deploying the various disciplines in planning to be minimally effective. Plenty of practitioners can be effective on this level. As a result, the discussion almost always reverts to one of cost and the low price is the differentiator in value.

The fact of the matter is that two planners with the same or similar expert value approach might plan for the same client in two different ways. These planners are not right or wrong for in most situations. Some less ethical planners have offered planning options which required a more significant cash outlay then might have been needed and as a result, clients have felt ripped off. Hence: “I just need a simple plan”.

I started to see the most success with client outcomes when I started focus on the preponderant value I delivered. Preponderant value is the dominant, prevalent and “in-control” value that is superior to expert value. Preponderant value comes from the actual processes inside of the planning system we have developed. Preponderant value comes from the success our clients achieve when we create the adherence partnership that is an integral part of our process.

It is always amazing what our clients achieve when they outsource the advice and oversight of their plan to our process and then THEY go out and achieve wins with their families, friends, business organizations and charities. Preponderant value is the driving force behind those achievements.

When investing in a qualified planner you are drawing on their expert value for sure. But ask, what level of preponderant value will we achieve? An experienced planner will have no trouble navigating through complex family and/or financial situations and will have your best interests at heart while delivering a level of value that is specifically and narrowly tailored to your specific situation – always.

If you or someone you know and love has been putting off a planning conversation, ask them to call Wood and Associates for a discussion about our planning process and how our unique preponderant value approach might help them.