What Is an Estate Plan?
Thousands of people reach retirement age every day, and millions more will turn 65 in the next decade. Many of them, even those who have funded a comfortable retirement, have neglected an estate plan. A Certified Estate Planner (CEP) helps people address this oversight. They create long-term plans for money and assets and ensure their clients’ directives are clear. Read below to find out more about what CEPs know and whether you’d like your financial planner to carry this certification.
The estate plan is a set of directives for the distribution of a person’s accumulated assets in the event of death or incapacitation. Typically, this includes plans for intergenerational wealth transfer using wills, trusts, insurance and arrangements for philanthropic bequests.
Some aspects of a plan may have no financial implications at all. But items with sentimental value can be just as important to the plan’s holder as real estate and trusts, and estate plans can provide safeguards around issues of inheritance. The plan also may spell out who cares for dependents or how accrued benefits or insurance should be transferred to beneficiaries. Many include directives that apply if the plan’s owner is living but no longer able of making their own decisions.
It may sound like a task for retirement, but you can create an estate plan much earlier as insurance against the unexpected. Some estate plans become enormously complicated, but even simple estates benefit from attention to detail.
Enter the estate planner. This is a professional-usually with a background in law, financial planning or accounting-who helps clients understand what assets a plan must cover and how to draft clear directives in the event of death or disability. In some cases, they will have Certified Estate Planner (CEP) at the end of their title.What Does the Certified Estate Planner Qualification Mean?
A CEP will have credentials in the same professions as other potential estate planners. In other words, they have no special powers or privileges other estate planners lack. The difference is that the CEP is highlighting a particular expertise around the financial, legal and tax aspects of estate planning. Attorneys with a CEP already may specialize their practice to focus on taxes, estates and trusts.
The National Institute of Certified Estate Planners (NICEP) created the CEP, and it oversees the certification process. The group promotes estate planning as an essential element of financial preparation, just like retirement planning. NICEP’s CEP curriculum focuses on estate planning essentials, such as setting up living trusts, estate tax implications and disability planning. Candidates pay NICEP for enrollment, study materials and a to sit for a qualifying exam.
NICEP also offers a Master Certified Estate Planner regimen to professionals with current CEP certification. The course of study is similar to CEP. But the master’s certificate includes topics that can attract a wealthier clientele, such as corporate structuring and charitable planning.What Are CEP Certification Requirements?
CEP applicants usually have current, valid professional credentials in the legal, tax or related advisory fields. However, NICEP may consider acceptance based on another relevant professional interest.
Approved applicants take a combination of online self-study and live, instructor-led classroom courses. The NICEP self-study manual weighs in at 770 pages, which covers all tested material. However, students can opt for online classroom sessions led by attorney instructors, which can add an extra 16 hours of class time. These sessions review case studies and include instructor-led Q&As.
There are eight study modules that cover estate taxes, wills, trusts and directives, planning for incapacity, funding bequests, protecting wealth and insurance. Students also learn about estate planning law and how to avoid violations, which particularly benefits students whose practice is in financial advisory or accounting,
Finally, students must pass a proctored closed-book exam by answering a minimum of 70 percent of questions correctly. If students fail, they have three additional opportunities to earn certification. In addition, CEPs must complete eight eight hours of continuing education every two years and pay an $235 annual recertification fee. They also must follow NICEP’s code of ethics., which requires compliance with federal and state licensing authorities and professional organizations and business behavior. However, NICEP can revoke certification at its discretion.What Does CEP Certification Cost?
CEP students pay an upfront, non-refundable fee of $1695, which includes the first annual recertification fee.
NICEP estimates students will need five or six months to complete the CEP coursework. That said, applicants have one year from the date of enrollment to complete the required study.Are There Other Certifications for Estate Planners?
Accredited Estate Planner
Estate planners have options when it comes to distinguishing their practice with extra professional credentials. However, not all certifications are equal, since coursework and professional requirements vary widely. For contrast with the CEP, here are two other certifications to consider.
The Accredited Estate Planner (AEP) designation is a product of the National Association of Estate Planners & Councils (NAEPC). It’s also limited to candidates with existing professional licenses, although NAEPC is more specific about areas of expertise. Potential candidates include attorneys, chartered life underwriters, certified public accountants, certified trust and financial advisors, chartered financial consultants and certified financial planners. Whatever their background, candidates must show a third of their business involves estate planning, based on a rubric NAEPC provides.
AEP certification differs from CEP in that there is no prescribed course of study for all candidates. Those with more than 15 years experience simply need to submit their professional bona fides, letters of recommendation and a processing fee, which includes first year dues and costs $350. However, all applicants must complete 30 hours of continuing education every two years.
Candidates with less than 15 years experience must complete two graduate-level courses on estate planning at the American College of Financial Services. And this is where AEP becomes a bigger investment, since these courses cost $1,850 each.Certified Estate and Trust Specialist
The Certified Estate and Trust Specialist (CES) certificate comes from the San Diego-based Institute for Business and Finance, which also grants certifications in mutual funds, annuities , income investing and taxes. The CES certificate costs $1,365. It requires holders to absorb a curriculum covering beneficiaries, wills, probate, retirement accounts, taxes, trusts, post-mortem guidelines and funerals.
Enrolling in the CES program requires only one year of experience in the financial industry and a B.A. degree. However students can complete the work while earning their degree and earn certification once they have compiled a year’s worth of employment.Bottom Line
The CEP demonstrates that a financial professional is well-versed in the particulars of estate planning. It’s not the only certification available and a great estate planning advisor may find it unnecessary. That said, the Certified Estate Planner designation highlights an important area of expertise, so if you’re ready to engage an advisor on an estate plan, those with CEP in their title are worth a look.Tips
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