The Importance of Congruency For Your Most Important Client in Financial and Estate Planning

It’s hard to overstate the importance of creating congruency among a client’s various legal, financial, business, and estate planning documents. Does their estate plan-which is hopefully aligned with the family’s goals, desires, and objectives – match their legal and financial plan documents? If the client is connected to a family business, real estate or philanthropic endeavor, is the estate plan congruent with their goals, objectives, and financial plan?family

For most families, the answer is no. Although families have likely attempted to keep their plans congruent, the reality is that each plan is built upon over many years by various independent professionals. Each of those professionals – the estate planning attorney, accountant, financial planner, banker, life insurance professional, philanthropic advisor – is focused on a different part of the system.

While independently their work may be excellent, these professionals are often responding to a particular need expressed at a particular time – minimize estate taxes, establish who should control the vote of the company stock, decide how to equalize assets, how to protect assets from a child or sibling divorce, etc.  Even if the “team” communicates well at these independent junctures it is unlikely that this communication is deep or continuous.

Each advisor, tends to focus on his or her specific area of specialty. Although some families might be fortunate enough to have a family office or trusted advisor who can help coordinate the communication among various professionals, neither tends to offer the 30,000-foot perspective that is usually necessary to provide true congruency among the many different plans.

And that type of perspective can be critical. When viewed at that level, it is common to see black holes in coverage – areas that no family member or advisor thought of because they were focused on their own specialty or on a specific need in a specific time.

It is wise to perform a congruency audit for your most important clients. This may reveal technical, communication, fiduciary, tax, or liquidity issues, or a lack of coordination of the pieces of the puzzle. A core issue that surfaces in almost every congruency audit is the lack of enough education about what the plan is, what the plan means, and what the consequences of the plan are.

It is typical for a plan to be a “snapshot”; but a family and its advisors must really view the plan as a “movie.” The system must be coherent, workable, and flexible enough to accommodate the changes that are inevitably around the corner. When congruency does not occur, the black holes eventually become visible and disrupt the foundation of the system.

In my 25 years of practice, I am still amazed at the black holes a congruency audit can show:

Recently, a family whose net worth exceeds $500 million asked us to review 26 irrevocable trusts that were drafted by one top law firm and reviewed by another. Our analysis revealed that none of the trusts contained a “spendthrift provision,” which makes all of the trust assets vulnerable to creditors and division in case of a divorce.

In another case, individual discussions with multiple generations of a family revealed that the advisors and the family were still primarily focused on estate and financial planning at the parental/entrepreneurial level, even though $50 million of wealth had been transferred to each child at the next generation level — and no significant planning had been done there.

A planning objective should be to attain congruency – when the family’s goals, desires, and objectives match the system that is established to support those goals, desires and objectives.

The Ideal Client Candidate For a “Congruency Audit” Could Be:

  • A family that understands the importance of congruency and would like to embark on an in-depth discussion of goals, objectives, and desires in tandem with an in-depth diagnostic review of all legal and financial documents and structures. A family in this situation is comfortable working with its current advisors, and as a precautionary measure, would want an additional review.  It’s like a family that is comfortable with its current physicians, but would go to the Mayo Clinic for a thorough battery of tests and a comprehensive diagnosis.  While the current team of advisors could feel threatened by an independent review, they really do understand that this type of review is both prudent and valuable.
  • A family in transition – one whose key patriarch,  matriarch, or influential family member has died, whose family office has disbanded, whose trusted advisor has retired, where there has been a generational switch in voting control of a family business, or a family member who must switch advisors because of a divorce or life changing event. When a significant change occurs, it is important to view the system with fresh eyes. This process will ground the family, educate them as to how they are currently positioned, and highlight recommendations that will be useful as they move forward.

·         A family in need of education – whose dynamic and financial wealth is entwined with legal documents such as irrevocable trusts, dynasty trusts, charitable trusts, limited liability companies, family limited partnerships,  and/or charitable foundations. The parties to each of those legal documents must understand their respective roles and responsibilities – the role of settlor, trustee, beneficiary, manager, limited partner, and unit owner. Within the complexities of family dynamics, there are  those who wear both a legal hat and a family member hat. There is often, however, a general lack of understanding as to how and when those hats compete and collaborate.

  • Often, the family members who currently operate the documents are not the same family members that established the documents. The current family members may be the children, grandchildren or great-grandchildren of the settlor. As part of the educational process, the family and its advisors could prepare collateral documents and mission statements that allow the members who are currently operating the documents to understand and work through their roles and responsibilities.


What a Diagnostic Assessment Process Could Entail

Should you wish to embark on this type of analysis for a key client, the process could consist of three phases:

Phase One: Assess what each family member understands: what are his or her individual goals, objectives, and desires, and those of the overall family plan.

Phase Two: An in-depth review of what the plan actually is, against the backdrop of what different family members have envisioned. This encompasses a thorough review of all pertinent legal documents (estate planning documents, corporate documents, shareholder agreements, voting trusts, and foundation-related documents) and discussions, if applicable, with the family advisors.

Phase Three: Preparation and delivery of a report which summarizes phases one and two, and which provides specific recommendations to achieve congruency.


Patricia Annino is a sought after speaker and nationally recognized authority on women and estate planning.  She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about.  Annino recently released an updated version of her successful book, Women and Money: A Practical Guide to Estate Planning to include recent changes in the laws that govern how we protect our assets during and beyond our lifetime.  To download Annino’s FREE eBook, Estate Planning 101 visit,


  1. Patricia,

    This is why we are in the business that we are in. There are so many moving parts to advanced planning and hardly ever do we see congruency with estate and financial goals to what is actually in the planning documents.

    This article hits home and every advisor who serves high net worth families needs to read it.

    Well done!

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