LPL to break into estate planning for mass affluent

LPL Financial hopes to make estate planning with individual retirement accounts easier for advisers who work with mass-affluent clients.
Private Trust Co., LPL Financial Holdings Inc.’s trust administration subsidiary, has introduced a new packaged program that will simplify the estate-planning process for clients with assets in individual retirement accounts. Specifically, the firm is targeting clients with $500,000 to $1 million in an individual retirement account or a 401(k).
Those clients may not be able to afford to hire an estate attorney to draft customized documents but they can still get help on deciding how best to control distributions to beneficiaries.
“By putting the IRA into a packaged product like this, where they have the flexibility on distributing assets, they create control for the grantor accumulating the wealth,” said Bethany Bryant, president of Private Trust.
As a result, the client can decide whether they would like to stretch the IRA — pushing out withdrawals over the lifespans of younger heirs — or decide whether to allow for the use of funds during the spouse’s lifetime but then revert the use of the IRA to the children after the spouse’s death, she explained.
Such strategies aren’t available with the typical custodial IRA, Ms. Bryant said.
“You can incorporate that into a document that you wouldn’t be able to use with a custodial IRA,” she added. “This adds the ability to control the asset, plus the tax deferral benefits of the retirement vehicle.”
Private Trust plan to make the service available both to LPL advisers and those who aren’t affiliated with the firm. Ms. Bryant noted that while there is a handful of broker-dealer-affiliated trust companies that offer such a service, those firms tend to do so for their own advisers exclusively.
“The estate planning and tax landscape is fairly complex,” Ms. Bryant said. “Many high-net-worth and mass-affluent investors are creating increasingly large portions of wealth in retirement accounts. This is where the bulk of growth has been.”