Estate Planning

Estate planning classification needs review

Advisers providing estate planning services need to ensure how this activity is officially categorised, according to two senior legal executives.

Speaking at last week’s SMSF Association Sydney chapter breakfast, Trusted Legal Solutions director David Fullerton warned financial planners and accountants to make sure their estate planning services were defined as providing advice and not legal services in regard to their professional indemnity (PI) insurance cover.

“Go to your PI insurer and say to them: ‘This is what my current practice is and these are my current procedures. Does the policy respond to that?’” Fullerton said.

“And make sure you get the response in writing.”

Legacy Law director Donal Griffin reinforced that message and identified estate planning as a potentially contentious area for SMSF professionals.

“We think it’s going to be examined and looked at through that [definition],” Griffin explained.

“I fully understand that clients don’t like [doing estate planning work]; you guys have habitually done it [but] I think you need to protect yourselves.

“The cases are very clear.”

He said it would be prudent for financial planners and accountants to recommend their clients seek legal advice on the subject.

However, he warned SMSF professionals should be acutely aware of the difficulties they might face if the client insisted they provide the estate planning service.

“If they come to you and say ‘I want you to do it’, you’re in a tricky position,” he said.

“You can either say ‘I’m not doing it’ and then lose the client, or [you can do it].

“It’s not unlawful for you to do it, but make sure it’s right because if there’s a problem, it will be used to beat you up.”

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