The Essentials for Building Your Estate Planning Practice

Dec 21, 2016 10:27:26 AM

the essentials for building your estate planning practice

Establishing a foundational understanding of individual estate planning concepts and how those concepts work together to create a comprehensive plan are essential parts of starting a new estate planning practice. Your clients expect expert guidance on how to control their property, provide for themselves and their loved ones and how to plan for incapacitation and estate distribution.

From initial estate planning meeting to trust administration, there are several critical steps to the estate planning process.

Why is Estate Planning Important?

Estate planning facilitates the preservation of wealth through wills and trusts to protect assets. A comprehensive estate plan allows your clients to:

  • Control property while they are alive and well
  • Provide for themselves and loved ones if they become incapacitated
  • Give what they have to whomever they want, the way they want, when they want
  • Minimize the impact of fees and taxes

Controlling these variables through comprehensive trust-based estate planning is vital because “traditional” will-based estate plans often fall short in scope and, perhaps most importantly, they won’t avoid the probate process.

Explaining Trust-Based vs. Will-Based Estate Plans

Trusts and wills are the most common forms of estate planning documents. Deciding on which is needed for your client is a key step in the estate planning process.

A will is a legal document that directs the distribution of assets after death. Wills are subject to probate, or the court-supervised collection and distribution of assets.

A trust, on the other hand, becomes valid upon execution. In most cases, the grantor can manage the assets in trust and plan for incapacity while they are alive and upon death, the assets in the trust are passed directly to a trustee, avoiding the probate process.

Explaining the Elements of Estate Planning

Financial and healthcare considerations are at the forefront of estate planning discussions. By planning for incapacity and creating comprehensive trust documentation, clients can ensure their financial and healthcare wellbeing and answer a number of critical questions, including:

  • Who will make decisions?
  • Will my family be cared for?
  • Will there be family conflict?
  • What types of care are desired?

Ancillary documents integral to the estate planning process include Financial Powers of Attorney and Advance Healthcare Directives.

Preparing for Incapacity

By establishing Financial Powers of Attorney and an Healthcare Advance Directive, clients authorize an agent to manage important medical and day-to-day financial affairs in the event of incapacity. These responsibilities include important medical decisions, financial transactions and providing for family members.

Financial Powers of Attorney specify important distinctions for scope and timing of control for financial transactions, claims and gifts.

Healthcare Advance Directives include Healthcare Power of Attorney, Living Wills and HIPPA Authorization. These components authorize an agent to manage non-end-of-life healthcare decisions, specify end-of-life wishes and establish who can receive medical information on behalf of the patient.

Preparing for incapacity and ensuring financial well-being can be a daunting process but various different types of estate planning solutions exist to help you meet different client objectives. Understanding these strategies will help increase the efficiency of your practice and better serve your clients.

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