Why Authority Planning Matters as Much as Asset Planning 

For many advisors, estate and financial planning conversations naturally center on assets: how they are titled, how they will transfer, how they are protected, and how they are taxed. Asset planning is tangible, measurable, and familiar territory for financial, legal, and tax professionals.

But there is another side of planning that is just as critical and far less understood by clients: authority planning. Authority planning determines who can act, decide, and manage when a client cannot. Without it, even the most sophisticated asset plan can stall or fail at the exact moment it is needed.

For professional advisors, understanding and integrating authority planning into client conversations is essential to delivering comprehensive guidance and reducing risk for clients and their families.

What Is Authority Planning?

Authority planning focuses on who has the legal power to act on behalf of a client during life and at death. It answers questions such as:

• Who can make financial decisions if the client is incapacitated?
• Who can make medical decisions if the client cannot communicate?
• Who can manage digital accounts and business operations?
• Who can act as trustee, executor, or personal representative?

Core authority planning documents typically include:

• Durable Power of Attorney for Financial Matters
• Advance Health Care Directive (or Health Care Power of Attorney)
• HIPAA Authorization
• Digital Asset Authorization
• Nomination of Guardians for Minor Children
• Trustee and successor trustee provisions in a trust
• Executor or personal representative nominations in a will

These documents determine who steps into the client’s shoes when the client cannot act themselves.

Why Asset Planning Alone Is Not Enough

Advisors often see clients with well-funded trusts, coordinated beneficiary designations, and thoughtful tax strategies. Yet, when incapacity or death occurs, families can still find themselves stuck.

Common breakdowns include:

• No one can access accounts because no valid power of attorney exists or institutions reject outdated documents.
• Health care decisions are delayed because no health care agent was appointed or documents are incomplete.
• Businesses stall because no successor authority was designated for management or voting rights.
• Court intervention becomes necessary, resulting in conservatorships, guardianships, or probate litigation.

From an advisor’s perspective, these failures can undermine years of planning and damage client and family trust in the advisory team.

Authority Planning Reduces Legal, Financial, and Emotional Risk

1. Prevents Court Involvement

Without authority planning, families may need to petition the court for conservatorship or guardianship. This process is public, costly, and time-consuming, and often introduces conflict among family members.

2. Preserves Investment and Business Continuity

When a client is incapacitated, investment decisions, tax filings, payroll, and business operations still need to happen. Authority planning ensures someone can act immediately without institutional delays.

3. Protects Vulnerable Clients and Families

Clear authority reduces the likelihood of financial abuse, elder exploitation, and family disputes. It also provides advisors with clarity about who is authorized to receive information and make decisions.

4. Aligns Legal and Financial Strategy

Asset planning determines what happens to assets. Authority planning determines who makes it happen. Without alignment, even the best asset strategy can be derailed.

Why Advisors Should Lead the Authority Planning Conversation

Clients often assume that having a trust or beneficiary designations means they are “covered.” Many do not understand incapacity planning, and they rarely initiate the discussion themselves.

Professional advisors are in a trusted position to:

• Identify gaps during financial reviews and annual check-ins
• Coordinate with estate planning attorneys to ensure documents are current
• Flag outdated powers of attorney that may not be accepted by institutions
• Encourage clients to name and regularly review fiduciaries and agents
• Integrate authority planning into holistic planning reviews

By raising authority planning proactively, advisors reinforce their role as comprehensive planners rather than product or investment specialists.

Key Questions Advisors Can Ask Clients

To bring authority planning into regular client conversations, advisors can ask:

• If something happened to you tomorrow, who could manage your finances?
• Who would make medical decisions if you could not speak for yourself?
• Have your powers of attorney been updated in the last five years?
• Does your business have a clear successor decision-maker?
• Are your trustees and executors still the right people for the role?

These questions naturally open the door to collaboration with estate planning counsel and reinforce the advisor’s value.

Integrating Authority Planning into Your Advisory Process

Forward-thinking advisory teams are embedding authority planning into their workflows by:

• Including authority planning checkpoints in annual financial reviews
• Creating a fiduciary inventory checklist for clients
• Coordinating document reviews with estate planning attorneys
• Educating clients through newsletters, webinars, and client events
• Documenting authorized contacts and agents in CRM systems

This approach supports compliance, risk management, and client satisfaction.

The Bottom Line

Asset planning answers where wealth goes. Authority planning answers who is in charge when it matters most.

For professional advisors, ignoring authority planning leaves a critical gap in client protection. Leading the conversation strengthens advisor-client relationships, reduces downstream legal and financial risk, and ensures that carefully built asset plans actually function as intended.

By treating authority planning as a core pillar of comprehensive planning, advisors can deliver deeper value and help clients achieve true peace of mind—both during life and for generations to come.