Annual reviews are crucial to all estate and financial plans; it is important for individuals to keep their trusted advisors abreast of any life event that may affect their financial situation. Too often, clients dismiss updates saying, “nothing has changed,” but deeper conversations reveal that important matters have indeed changed.

There is no substitute for bringing together all of an individual’s trusted advisors on a regular basis so that information is shared and ideas are generated. These advisors should collaborate to help the individual understand the wide array of issues to potentially address and provide comprehensive solutions. More regular meetings and interaction across the team would also be beneficial. Sometimes the critical issues that have changed are known only in part by each advisor, so that a collaborative effort is necessary to learn the client’s whole picture. In addition, the advisor who is aware of a particular change might not be the advisor that should act upon it.

Below are a few suggestions framed from the perspective of what advisors might discuss with their clients.

Knowing the Individual’s Situation

When was the last time the individual realistically looked at his financial situation? Many wealthy persons presume that wealth means absolution from the need for cash flow analysis. In reality, the wealthy can outspend their means just like anyone else. It is also important to understand that creating a spending plan for wealthy clients is much more than dollars and cents. For those of substantial wealth, lifestyle spending at almost any level might not be the issue; however, strategic planning might demonstrate the wisdom of giving more to children or charity, or perhaps reducing the risk in one’s portfolio.

Financial Plan

What is done with the individual’s spending plan is critical. Advisors should forecast the financial plan to a reasonable age and then assess the outcomes. Limiting forecasting to age 80 or 85 may prove unduly risky given increasing longevity, unless the individual has a known health issue. The results should be stress tested (e.g., additional healthcare costs, costly renovation to make a home accessible) to determine a realistic balance. If the modeling uses overly conservative assumptions, the individual could be hurt financially.

For example, Dr. Jain is worried about malpractice, and she and her husband are evaluating funding nonreciprocal spousal lifetime access trusts (SLAT) for asset protection purposes. Using conservative forecasts might inhibit appropriate funding of the SLATs for asset protection, thus proving detrimental to Dr. Jain if a future malpractice claimant argues that the funding of the SLATs was excessive and a fraudulent conveyance. Forecasting should reflect all planning goals and thus may require the input from various members of the client’s planning team.


Client return objectives and risk tolerance should be reviewed periodically, but do not hesitate to review basic plan assumptions if the situation has changed since the last annual review meeting. Is it time to rebalance the excess returns to lower risk? Where was the individual invested for the last year, and more broadly, how is the client invested for the long term? Is the client adequately diversified? Is there a sufficient risk level in the portfolio, given real life expectancy?

Asset location decisions should be reviewed with input from the entire team. An irrevocable grantor trust might be changed to a non-grantor trust, or assets swapped from the trust back into the individual’s own name. Part of a regular IRA might be converted to a Roth IRA. These decisions can be made in a broader context with adviser input, perhaps resulting in net better income tax or asset protection.

The Federal Reserve recently raised rates for the third time within the last year. How do increased rates affect the individual outside of her investment portfolio? Has the individual shopped to obtain the best rate for her bank accounts? Has the individual’s variable rate debt been reviewed? For example, a margin account rate and adjustable mortgage rate may be affected, and corrective action warranted.

Life Insurance

Coverage should be reviewed periodically. Who owns the policy? Are there options in the policy to evaluate (e.g., convert a term to permanent policy because of a negative health diagnosis)? Should more be paid into the policy to assure appropriate funding? Are there new insurance needs, fewer needs, or just different needs?

Property, Casualty, and Liability Insurance

This coverage is vital to every individual’s financial security but is too often thought of casually, if at all. Periodically identify potential risks that may exist and determine if the coverage meets those risks. Risks change over time, as does the wealth being protected. Example: The client now has home healthcare workers. Was appropriate workers compensation insurance purchased? Has the number or role of those workers changed?

Are Assets Being Preserved?

Step back and take a big picture look at the plan and whether it makes sense. Overviews of each document and component of the plan are often worthwhile to assure everyone on the planning team is current. Avoid complacency. What are the current estate, financial, asset protection, and other planning goals of the grantor and beneficiaries of a particular trust? Since the initial goals of the trust were determined above, these can now be compared to the current planning goals to identify differences, which can provide guideposts for evaluating how the trust might be modified to improve results.

Example: A decade ago, when a will and various irrevocable trusts were created, it was believed appropriate to hold trust assets in trust until each beneficiary was 35, at which time they should be mature enough to handle the wealth. Now it is realized that beneficiary maturity is not the issue, but rather protecting wealth from lawsuits and divorce. All current planning therefore relies on long-term or perpetual trusts. The old planning is no longer adequate; perhaps the old trusts can be decanted into newer and better trusts.

Example: Several years ago, an irrevocable trust was created to hold insurance or gifts of business interests. Trusts today might be much more flexible and robust than even those created only a few years ago, so it might be worthwhile to explore with freezing the values in the old trust by having it sell assets to a new, more flexible trust before values increase.

Communication with Fiduciaries

When is the last time the trustee and trust protector of each trust have participated in an annual review meeting? Without periodically involving all key players in an update discussion, they will not be prepared when a problem arises. Formalities cannot be adhered to if the fiduciaries charged with carrying out trust duties have no active role.

Communication with Advisors

Are all the advisors informed? The team may include more than just a wealth manager, estate planning attorney, and accountant. Not every advisor has to be at every meeting, but every advisor should be kept up to date with the plan and general overview.

Communication with Heirs

Have the heirs ever been informed of appropriate elements of the plan? Age- and position-appropriate discussions are important to have.

Periodic, and often annual, reviews are essential to the success of every client’s plan. Professional advisors in each estate planning discipline should help educate clients about the importance of regular meetings, collaboration, and the role of the other trusted advisors on the team.

Martin M. Shenkman, JD, CPA/PFS, AEP is an attorney at Shenkman Law in Fort Lee, N.J.
Greg Plechner, CFP, ChFC is a principal, wealth manager, and chief marketing officer at Modera Wealth Management, Westwood, N.J.