Financial Planning vs. Estate Planning: What's the Difference?

When it comes to planning out your finances, people are (rightfully) confused about the difference between an estate attorney vs. financial planner. Oftentimes, people use these terms interchangeably, but these professions serve different interests and goals.

What Does an Estate Planner Do?

An estate planner is typically an attorney who is an expert in estate administration, trusts, probate, and tax law. A qualified estate planning attorney will help you draft all your estate planning documents. These documents may include a:

• Last Will and Testament
• Trust(s)
• Living Will
• Healthcare Directives

An estate plan is one of the most critical tools you can have for your financial future. An estate planning attorney can help you evaluate your goals and develop a customized estate plan that will provide security for you and your family, protect your assets, minimize your taxes, and help your family avoid probate.

What Does a Financial Planner Do?

Financial planning involves collaborating with a financial planner to analyze your current financial situation, identify financial goals, and developing strategies to achieve those goals. A financial planner can help you with meeting long or short-term financial goals and with utilizing investment opportunities. For example, your financial planner may work with you on saving for a new home, investing in your 401K, or putting money aside for a college fund.

It’s highly recommended for everyone to have a financial plan in place. However, it’s important to stress that a financial plan does not outline who is to manage your affairs if you become unable to do so yourself. This would require consulting with an estate planning attorney.

Is Estate Planning Part of Financial Planning?

No, although the terms seem to overlap, when it comes to estate planning vs. financial planning, the two areas are quite different and serve different goals. While the goal of a financial planner is to help you accumulate wealth, the goal of an estate planning attorney is to utilize various estate planning tools to help you preserve and distribute your wealth after your death.

Estate planning may touch on some of the same areas as financial planning (Ex: asset protection or tax planning), but estate planning also includes planning for the distribution of assets upon your death, minimizing estate taxes, protecting your heirs, and documenting your healthcare decisions. Typically, a financial planner cannot give you legal advice or draft the required legal documents necessary for an effective estate plan, which is why it’s important to also consult with an estate planning attorney.

Do I Need An Estate Planner? A Financial Planner? Or Both?

Estate planning and financial planning are both important, which is why it’s wise to have both an estate planning attorney and a financial planner managing your interests. These professionals will be able to help you plan for your financial future and meet necessary goals. In order to effectively achieve those goals, it’s also important to keep both your estate planning attorney and your financial planner updated on your plans for each area.

Contact Us

The attorneys at Brown & Hobkirk, PLLC have the experience and expertise to help you craft a solid estate plan. Our goal is to use carefully designed strategies that will help protect your family and preserve your assets.

We are ready to help you at one of our conveniently located offices in Scottsdale, Phoenix, Peoria, Chandler, or Tucson. Call us today to schedule your consultation.