How financial advisors are helping the mass affluent pass down their wealth
Broadening access to estate planning services beyond the wealthy not only presents a big opportunity for financial advisors, but also fulfils an urgent societal need.
Around 40% of global wealth is held by 613 million mass affluent individuals, those with liquid assets of between USD100,000 and USD1 million, according to UBS. But many of these people don’t have clear plans in place about how their assets will be preserved, managed and distributed after death.
This involves more than having a will. “Just because you have a will, it doesn’t mean your wishes are going to be executed,” said Saijal Patel, Founder and CEO of Saij Elle/Saij Wealth Consulting, who provides personal finance education and financial wellness consulting services to corporations.
“What if you don’t have the resources to execute on your plan? What if you picked an executor who can’t execute? What if you have beneficiaries who believe your will isn’t fair and decide to contest it? Or perhaps your will isn’t properly written and contains discrepancies, so the courts have to come in to make decisions on your behalf, which can become costly,” said Patel.
That’s where estate planning comes in, laying out a well-constructed plan with the help of a financial advisor or estate attorney to deal with these “what-ifs” in distributing someone’s assets when they have died or are incapacitated.
Patel cited the example of a vacation home that a parent might want to keep in the family after they pass away. They may bequeath it to their two children, but one may decide they don’t want it and instead asks their sibling to buy them out. If the one who wants to keep the property doesn’t have the necessary funds, the only option may be to sell it, which would go against the parent’s wishes.
“That’s where the financial planner will look at your resources and consider insurance options in the estate so that if that happens, they can use the proceeds to buy it out,” said Patel.
The intention-action gap
While most people say that they consider estate planning important, the 2024 Charles Schwab High Net Worth Investor Survey of wealthy Americans with at least USD1 million in investable assets revealed that only 18% of respondents had an estate plan, compared to 57% who had wills (see Figure 1).
There are several possible reasons, including people’s tendency to procrastinate and a reluctance to confront their mortality, as well as the perception that taking care of one’s estate is expensive and unnecessary and can be left to the government to deal with, said Patel.
Another issue is that “people feel like they don’t really know what they want — that they haven’t figured out all the pieces and will wait until they do to start the process,” added Patel. “To those people, I always say ‘just get something done, because you will likely have to revise your will and review your estate plan anyway, especially following big life changes.’ It’s not a process that is typically one and done.”
As Stacy Francis, President and CEO of Francis Financial, pointed out, there’s also a fairly common misconception that only the wealthy need to do estate planning. “We're really big proponents of everyone having an estate plan,” she said.
To be sure, high-net-worth individuals generally need more detailed estate plans, requiring coordination between several advisors focused on financial planning, tax and estate planning, said Noah Harden, National Wealth Planning Manager at Comerica Bank. Not only do wealthy individuals own complex assets, but the assets wealthy individuals own could exceed the estate tax threshold, which in the US stood at USD13.61 million in 2024.
But even the mass affluent may need to deal with some degree of complexity and tax issues, said Harden. “The level of complexity will dictate how much coordination is needed among multiple advisors and how intricate their plan needs to be.”
According to Francis, there are three key things for all people to cover in their estate planning regardless of their level of wealth.
“Number one is making sure that you have set up your beneficiaries correctly,” said Francis. “One of the biggest mistakes I see is someone drafting a will that leaves all their assets to, let’s say, their spouse or their children, but when you look at their actual brokerage, IRA or 401k accounts that list a beneficiary, that could be in conflict. In the US, whoever is listed as that beneficiary is who those assets go to.”
Number two is setting up a revocable trust, “which is very easy to do so and will save your loved ones headaches and thousands of dollars in fees, while avoiding probate,” said Francis.
And third, “make sure that you have listed your healthcare proxy and power of attorneys. It doesn't matter how wealthy you are, you want to make sure that you have someone that you trust that will make financial and medical decisions for you if you cannot, and can pay your medical bills if you are incapacitated.”
Addressing affordability
It is often challenging to provide estate planning services to the mass affluent because they are more dispersed than high-net-worth individuals and the industry is faced with a shortage of advisors. Technology solutions, including artificial intelligence to help partly automate and streamline the process, could make servicing this segment more viable.
“Advances in estate planning technology, such as digital wills, online trust management, and AI-driven tax strategies, are making succession planning more accessible and efficient,” said Francis. “These tools allow for real-time collaboration among family members and advisors, ensuring transparency and streamlined execution.” She added, however, that “while these are fantastic tools, they cannot not replace working with a trusted and experienced estate planning attorney.”
Patel also cautions that the best way forward is a hybrid approach using humans empowered by machines, rather than a fully automated solution.
“Estate planning is just too complicated. Wills might be a little easier to automate, especially for people who have very simple needs. But even then, there has to be education. There’s a saying – garbage in, garbage out. If your input and assumptions aren’t correct, your desired wishes may miss the mark,” said Patel. “You start having challenges if you haven’t thought through the what-ifs and it gets more complicated — if you have a blended family, for example or a business or your children are married and you have grandchildren.”
Patel suggests that technology could be used to produce a first draft based on an in-depth survey and checklist, but then a human advisor needs to help guide the process towards a final draft.
“All these things are often more emotional than practical decisions, and cookie cutter formulas don’t work,” she said. “It’s why I tell my clients they can’t leave it up to the government to handle this, because they don’t know your family dynamics. They don’t know what’s important to you. They don’t know that you may have a son or daughter who mismanages money and needs extra protection, things like that.”
Imparting financial values
More than passing down assets, estate plans can also provide a way for parents to impart financial values to their children, explained Francis. As such, they may wish to include “what we call a ‘love letter to your heirs,’ talking about what you wish for them, what is important about money to you in your lifetime and what you want to be important to them as they determine how they want to use this money and ideally carry out your values.”
When there is litigation around an estate plan, it’s generally because one or more of the beneficiaries do not understand it or feel it is unfair, said Francis. “That love letter can be so helpful in really explaining all these pieces.”
Francis also recommends that people have clear and open communication about money and values with their heirs regularly during their lifetimes, rather than leaving it to the end of their lives.
To that end, she encourages the growing trend of “giving while living,” which is supported by the US Internal Revenue Service’s allowance for individuals to give away up to USD19,000 in money or property (in the 2025 tax year) to as many people as they like, without having to report it — up to a lifetime limit of USD13.99 million.
“There are a lot of wonderful benefits of that. It allows you to share your values of why you’re giving this gift. And it can be absolutely life altering for people for people to receive gifts when they are age 30 versus at age 60.”
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