Help Your Clients Understand the Importance of Legal Plans

Your clients might not understand the importance of having a plan for their finances and their assets.

It is up to you to explain to them why they should resort to legal plans to protect what they have worked so hard for.

In this article, we'll break down how you can help your clients understand the importance of estate planning. Let's get started.

What is an Estate Plan?

What do people mean when people they say "Estate planning?" People might think only those who are wealthy and own a lot of property should make legal plans.

However, this is not the case. If you have any sort of assets whatsoever, then you could benefit from making an estate plan.

If you own a car, house, or have investment accounts, then you should make plans for the things you worked so hard.

With this plan, you'll leave explicit instructions of who in your family will get what in case of your passing. Without these legal plans, your assets could end up in court and the process could take many years.

Trusts and Wills

What is a trust or a will? A will ensures all the property is distributed according to the individual's last wishes. Trusts often help minimize the legal exchanges and reduce taxes.

However, having the proper written will is essential to make sure all of the beneficiaries receive what you designate to them.

You should get legal help because the terminology should be explicit and the same asset is not bequeathed twice and there are no suits or the will is not contested.

Power of Attorney

When trying to do an estate plan, people often hear the term power of attorney. Why do people need a power of attorney?

A power of attorney is necessary because they act on people's behalf when they are incapable of dealing with it themselves. Without a power of attorney, the courts might be able to decide what happens with your assets in case you fall ill or pass away.

This document will give the person you designate the power to make real estate, financial, and legal decisions on your behalf.

In some marriages, it makes sense spouses are each other's beneficiaries.

Understanding Beneficiaries

If you're thinking about sorting legal plans, then you need to make sure you fully understand what a beneficiary is.

When you create a will, all of your material possessions get passed down to the person you designate. However, what happens to what doesn't get included in the will such as 401ks and insurance plans. That is why it's important to have a beneficiary.

In the event you don't name a beneficiary, the courts might have to decide for you who has access to your funds.

Ensure all of your investment accounts and insurance accounts have a designated beneficiary.

Guardianship Designations

Not only is it important to make a plan for all of your assets and finances, but when you have underage children, you have to designate a guardian for them.

If you have children, make sure you don't leave the guardianship clause out of your will.

This is perhaps the most important clause you should put on your will.

Choose someone who has similar raising views to your own, someone who is financially stable, and is willing to raise your children.

Letter of Intent

Another thing you need to understand when performing legal planning is the term letter of intent.

The purpose of this letter is to leave an explanation to your estate executor or your beneficiary. In this letter, you will explain to them what you want to be done with your assets should you pass away or become ill.

You can include as many instructions as you wish in your letter of intent such as funeral instruction and other last wishes.

This letter should not be mistaken for a will. A letter of intent might not stand in a court of law as a will, it's a mere document to leave as instructions to something already designated in a will.

Healthcare Power of Attorney

Another important part of legal planning is deciding who will be your healthcare power of attorney.

In the event you become incapacitated or with a terminal illness, you will have to designate someone to make the difficult decisions.

This power of attorney should be created before you're unable to do it yourself.

Protect Assets from Creditors

You might leave all of your assets to a family member or your children, but if they're not careful they might lose the asset.

For example, if one of your children gets married to someone with bad credit or who is bad managing money. The assets you leave them could be in jeopardy.

However, if you leave well thought out legal plans, you might be able to protect your beneficiaries from outside influences.

Reducing Taxes

Even the most thought out estate plans, have to pay taxes. However, if you get the right help, you could save a great amount of money on taxes.

Married couples can save money on taxes by putting together the right trusts or filing the correct exemptions. This is something you should consult with your legal or financial advisor to determine what you qualify for.

Avoiding Probate

If you neglect to make legal plans with regards to your assets, then your estate might go into probate.

In the event that you don't designate a beneficiary for your estate, the probate court would designate one.

This could lead to your assets getting tied up in court until a judge designates who gets them.

By creating an estate plan, you can avoid having any of this happen, and save your family from having to battle it out in court.

Ready to Make Legal Plans?

Helping your clients understand the benefits of estate planning will save them a lot of distress later on. It's a way to protect their family members should anything happen to them.

If you want more information about how you can help your clients create better estate plans, check out what our clients say about our software.

  • (877) 284-7897
  • 3 Bethesda Metro Center, Suite 500, Bethesda MD

 Beyond Counsel's consultants love talking legal tech. 

 

Go Beyond a Demo with an hour-long review of your firm's technology.

You have Successfully Subscribed!