Estate Planning Fee — Milestone-Based Recognition (Plan Delivery and Implementation)
Recognizing estate planning advisory fees — with the fee allocated between the planning engagement (recognized at plan delivery) and the implementation phase (recognized as trusts are established and documents executed).
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Estate Planning Fee Receivable (Planning Phase Completed) | Asset (+) | 35,000.00 | - |
| Estate Planning Revenue — Plan Delivery (Milestone — Point in Time) | Revenue (+) | - | 35,000.00 |
💡 Accountant's Note
Comprehensive estate planning for high-net-worth and ultra-high-net-worth clients is a significant revenue stream for private banks, trust companies, and wealth management firms. A complete estate plan for a $50M family: $35,000 for strategy and plan development + $15,000 for implementation (drafting and executing trust documents, transferring assets, coordinating with estate attorneys). Under ASC 606: estate planning involves multiple distinct performance obligations: (1) ANALYSIS AND STRATEGY: reviewing existing estate, developing the recommended structure (which trusts, tax strategies, beneficiary designations) — this is complete when the written plan is delivered to the client. Recognized at delivery (point-in-time — the deliverable is the plan document). (2) IMPLEMENTATION: establishing trusts, coordinating with attorneys, retitling assets — recognized as each implementation step is completed. (3) ONGOING MAINTENANCE: annual reviews, updating for law changes — ratable over the review period. The total engagement fee is allocated across these obligations at their relative SSPs. Unlike hourly billing where time tracks the progress: estate planning fees are often fixed ('value-based') requiring explicit milestone documentation for recognition.
Practitioner & Systems Framework
💻 ERP Architecture
Estate planning fee tracking requires matter-level management: each client engagement is tracked with defined milestones (engagement letter signed → data gathering complete → plan draft delivered → plan finalized → implementation complete → first annual review). Fee recognition triggers correspond to milestone completion. For integrated wealth management firms where estate planning, investments, and tax are bundled: the bundle requires SSP allocation across all services. Large family offices with multiple-generation families may have ongoing estate planning engagements — the annual review component is ratable while new planning phases are milestone-based.
⚠️ Audit Flags
Estate planning fee audits test: (1) Milestone achievement — is the plan document delivered and accepted by the client before the planning fee is recognized? (2) Multi-year engagements — are multi-year estate planning retainers properly allocated to the specific performance obligations in each year? (3) Bundled service arrangements — for firms that offer 'family office lite' (investments + estate + tax + family governance all bundled): is the SSP allocation documented? (4) Legal referral vs. integrated service — if the wealth manager refers the client to estate attorneys and earns a referral fee: is the referral income properly disclosed and recognized?
📄 Required Documentation
Estate planning engagement letter (scope, fee, milestone payment schedule), plan delivery documentation (client sign-off or meeting confirmation), implementation milestone log (trust established, assets retitled, beneficiary designations updated), SSP allocation for bundled engagements, ongoing review schedule, referral fee disclosure (if applicable), and Form ADV Part 2A financial planning fee disclosure.
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