RLT, NAPT, or ILIT? When Financial Advisors Should Introduce the Conversation
Financial advisors don't need to recommend trust structures.
However, understanding the purpose of common trusts can help identify planning opportunities and facilitate better estate planning conversations.
Here's a practical guide to three trust structures advisors commonly encounter.
Revocable Living Trust (RLT)
Primary Planning Goal
Probate avoidance, privacy, incapacity planning, and wealth transfer coordination.
When Advisors Should Raise the Topic
Consider an estate planning conversation when clients:
Own real estate
Have growing investment portfolios
Have blended families
Are approaching retirement
Have only a will
Express concerns about probate
Advisor Talking Point
"It may be worth reviewing whether your current estate plan is structured in the most efficient way for your goals and family situation."
Nevada Asset Protection Trust (NAPT)
Primary Planning Goal
Asset protection and wealth preservation.
When Advisors Should Raise the Topic
Consider introducing the conversation when clients:
Own businesses
Have significant liability exposure
Own multiple investment properties
Express concerns about protecting accumulated wealth
Experience significant asset growth
Advisor Talking Point
"As your assets continue to grow, it may be worth discussing whether additional asset protection strategies should be part of your overall planning."
Irrevocable Life Insurance Trust (ILIT)
Primary Planning Goal
Advanced life insurance planning and wealth transfer coordination.
When Advisors Should Raise the Topic
Consider discussing an attorney referral when clients:
Have significant life insurance coverage
Own businesses with succession plans
Have multigenerational wealth goals
Are focused on long-term legacy planning
Have complex family dynamics
Advisor Talking Point
"Based on your life insurance and estate planning goals, it may be worthwhile to explore whether additional planning strategies should be considered."
A Simple Comparison for Advisors
RLT: Probate concerns, retirement planning, real estate ownership
NAPT: Asset protection concerns, liability exposure, business ownership
ILIT: Large life insurance policies, wealth transfer planning, business succession
The Advisor's Role
The advisor's responsibility is not to determine which trust a client needs.
The advisor's role is to:
Identify opportunities
Ask thoughtful questions
Recognize planning gaps
Facilitate introductions
The attorney's role is to evaluate the facts and recommend appropriate legal structures.
Want More Estate Planning Resources for Advisors?
The Gulf Coast Law Advisor Portal provides financial advisors with trust education, conversation guides, referral resources, and client-facing materials designed to make estate planning discussions easier.